Wednesday, April 25, 2007

Reading :: Good to Great and the Social Sectors

Good to Great and the Social Sectors: A Monograph to Accompany Good to Great
By Jim Collins

I recently reviewed Good to Great, a bestseller that attempts to define what distinguishes "good" companies from "great" companies based on the author's research. That book focused on Fortune 100 companies and drew several principles from them. However, the book didn't focus on public institutions, nonprofits, and not-for-profits (for which Collins uses the blanket term "social sectors"). In fact, some of the primary points of that book didn't apply well to the social sectors. Collins lists some of these (my paraphrase):
  • Social sector organizations typically don't use business metrics, so it's harder to define "good" and "great"
  • Social sector organizations typically use a more diffuse power structure, meaning that leaders don't have as many tools at their disposal for enforcing their vision
  • Social sector organizations have a harder time easing out people who do not contribute well to the organization's mission
  • Whereas Good to Great makes the company's "economic engine" a chief focus, social sector organizations are far less concerned with profit and more concerned with resources
  • In social sector organizations, "turning the flywheel" has more to do with brand (p.3)
Collins, who himself works at a public university [Correction: Collins appears to run a research lab unaffiliated with a public university -- CS 4/26/2007], recounts that 30-50% of the correspondence he receives on Good to Great is from social sector organizations. So he's written this monograph on applying the Good to Great insights to such organizations. Like Good to Great, the monograph was based on "critical feedback, structured interviews, and laboratory work with more than 100 social sector leaders" (p.3), but he cautions that the study has not been executed to the level of the Good to Great corporate study: "such research studies -- done right -- require up to a decade to complete" (p.3). So with that caution, let's look at some of the key insights.

One useful distinction Collins draws is between executive and legislative leadership skill.
In executive leadership, the individual leader has enough concentrated power to simply make the right decisions. In legislative leadership, on the other hand, no individual leader -- not even the nominal chief executive -- has enough structural power to simply make the right decisions by himself or herself. Legislative leadership relies more upon persuasion, political currency, and shared interests to create the conditions for the right decisions to happen. (p.11)
Collins stresses that the two kinds of leadership skill are not exclusive to a given sector, but legislative skill is more predominant in the social sectors. (It certainly is at my own university). And in the private sector, executive leaders don't have "the same concentration of pure executive power they once enjoyed" either, so leaders in both sectors must bear in mind that "true leadership only exists if people follow when they have the freedom not to" (p.13, his emphasis).

One consequence of more diffuse power structures in the social sectors is that it's harder to get rid of the underperformers. For that reason, Collins argues, "early assessment mechanisms turn out to be more important than hiring mechanisms" (p.15). He encourages us to hire "those who are productively neurotic, those who are self-motivated and self-disciplined, those who wake up every day, compulsively driven to do the best they can because it is simply part of their DNA" (p.15). (This is what a competitive tenure process is meant to achieve.)

Finally, Collins talks about the issue of economic engines. In Good to Great, he argued for the "hedgehog concept," the notion that great companies stayed within the intersection of three circles: what they are deeply passionate about, what they can be best in the world at, and what drives their economic engine. But in a social sector organization -- say, a church -- the focus isn't on profit but resources:
The third circle of the Hedgehog Concept shifts from being an economic engine to a resource engine. The critical question is not "How much money do we make?" but "How can we develop a sustainable resource engine to deliver superior performance relative to our mission?" (p.18)
Collins identifies three components of such resource engines: time (how to get people to contribute their efforts for free or under market rates), money (how to sustain cash flow), and brand (cultivating "a deep well of emotional goodwill and mindshare of potential supporters") (p.18). To support his discussion, Collins describes four quadrants of the social sector, defined by two axes: (1) charitable donations & private grants; (2) business revenues (p.21).

Overall, this monograph does some valuable work in fleshing out the Good-to-Great framework for social sector organizations. It's a fast read, but only if you've read Good to Great already. And like Good to Great, it's written clearly and lucidly. My main objection was that it didn't list the participating organizations or discuss methodology in detail. Nevertheless, much of the advice rings true for those of us working in the social sectors.


Alan Rudy said...

Many complaints come to mind given my leftishness. However, it seems to me that the key issue w/r/t universities is that Collins -- by your account -- assumes universities have a singular core mission... they do not and have not since at least the time that Clark Kerr developed the neologism, multiversity.

In fact, the reduction of multiplex - socionatural, technonatural, political ecological, cyborg movements/institutions - into single issue/mission organizations may make management more efficient -- whether in the business or social sector -- but it also has deeply contradictory results. One instance of this would be the destruction of the grass roots energy within the Friends of the Earth when they drove out David Brower and moved from SF to DC. An other set of which Brian Wynne and others have provided in their work on the construction of risk... where analyses focus on the differences between the complex and multiform concerns about ecotechnical risk relative to the singular, reductionist or, at best, stochastic take by risk scientists embedded in gov't agecies and businesses. Take GMOs, where the public is equally concerned with ecological, scientific, health, technical and cultural "risks" of their promulgation -- issues further complexified in university settings by issue of public mission, privatized knowledge, teaching excellence, patented technologies and beyond -- whereas biotechnologists invariably insist on objective measures grounded in risk science.

Clay Spinuzzi said...

Sure, I agree that like many management texts, this monograph really does present an overly simple picture of complex institutions. That's especially true in the nonprofit world, where operationally it's often difficult to tell the boundaries between nonprofits in terms of mission, activities, and personnel. Collins has also been criticized for paying too much attention to leaders (a charge that he addresses in GTG, but that I think still sticks).

On the other hand, as I remind my grad students, sometimes more complex doesn't mean better. Collins isn't conducting a poststructuralist analysis here, he's constructing a narrative that appears to hold across multiple organizations and in which he is fairly open about what constitutes success conditions. This sort of analysis allows him to gain a lot of traction across multiple organizations, traction that is often lost in the details of more complex analyses, and traction that moves readers along the way to those success conditions. In Latourean terms, he's black-boxing.

This black-boxing is absolutely necessary at some point, but black boxes can always be opened. In this review, I've focused on examining how well the black box works rather than how it is constructed -- or to switch metaphors, I'm critiquing the road rather than the destination, the method rather than the methodology.

Alan Rudy said...

In Science in Action, Latour unpacks the communal, multivalent and material semiotic production of black boxed phenomena in science. Collins' neologism, "social sectors", is not a black box by these lights. It is, at best, a categori-cal assertion that the institutions he places in the realm of "social sectors" are more homogenous than differentiated, that they share a sufficiently similar set of management structures to be treated as effectively the same.

I am all for the abstraction of categories based on empirical similarities. However, and again this is from what you reported, Collins uncritically extends the traditional public-private dualism into an account that I find empirically wrong and does so by applying private sector standards -- like underperforming employees -- in a manner directly parallel to the efforts of neoliberal university and mainstream NGO managers... a practice which itself indicates that the public-private divide is less coherent than his foundational assumption demands.

Mainstream, usually Weberian, organizational sociology does a far better job generating empirically useful abstractions of the far more than two kinds of management within and across the public-private divide. This can be seen quite easily in the arguments made by the Triple Helix crowd, folks who argue (too strongly) that globalization, etc., has generated a condition wherein there is ever more public-private-university collaboration than ever before... and that this is a good thing.

As always, thanks for helping me better understand clarify where I stand on things I think I know as they apply to issues outside the center of my work.