Leadership in Economic Development: Going from Good to Great
By Joy Wilkins, CEcD
For in the end, it is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work. Perhaps, then, you might gain that rare tranquility that comes from knowing that you’ve had a hand in creating something of intrinsic excellence that makes a contribution. Indeed, you might even gain that deepest of all satisfactions knowing that your short time here on this earth has been well spent, and that it mattered. – Jim Collins
Not only do few organizations achieve greatness, few seek to achieve greatness, wrote Jim Collins in his 2001 masterpiece Good to Great: Why Some Companies Make the Leap…and Others Don’t. Why? Because “good is the enemy of great,” he boldly challenges.
So what is wrong with being good? Good has impact. Good makes a difference. Good is, well, good. However, what if no matter how good you and your organization become, you always have the potential to do better? And, what if instead of being good, you could be great? Exploring this exciting question has been at the heart of Collins’ work.
Greatness, Collins explains, is an ongoing and dynamic process, rather than a destination point. In fact, his research illustrates that when you become satisfied with a performance as “the best we can do,” you end up settling for something less than your full potential. This settling mindset, his work shows, leads to mediocrity. In his follow-up monograph Good to Great and the Social Sectors, Collins writes, “You will always be good relative to what you can become.” Inherent in this message is that performance is not a status-quo phenomenon. Unless you constantly work toward raising the bar, your performance will fall short of its potential. That is, greatness is an ever-evolving, upwardly moving target.
Applying the concepts to economic development
Such a conversation is critical for the economic development profession from both the organizational and practitioner vantage points. In the face of ever-challenging economic conditions, settling for good is not good enough to make our communities thrive. Also, as stewards not only of public resources and goodwill but also the public trust, the communities we serve are owed nothing less than our steadfast pursuit of the greatness described by Collins. And, simply put, the great results we achieve can have a profound impact on human life in our generation and the human condition of generations to come. Therefore, quoting Collins, in order to best serve those we serve, we economic developers must ask ourselves daily: “Can we say that our organization makes such a distinctive impact on the communities we touch and with such unadulterated excellence that if our organization were to disappear, this would leave a hole not easily filled by any other institution on the planet?” Talk about meaningful work…
In Good to Great, Collins builds on and also goes beyond the call that W. Edwards Deming, Peter Drucker, Tom Peters and others make for continually improving in what we do. That is, he not only makes the call for the continual pursuit of greatness, but for achieving a lasting endurance in doing so. He identifies four key elements in this journey from good to great: 1) disciplined people, 2) disciplined thought, 3) disciplined action, and 4) building greatness to last. “Sustained great results depend upon building a culture of self-disciplined people who take disciplined action,” says Collins.
Disciplined people
Collins makes the case that greatness happens through a leadership approach that involves ambition for the cause (not self) and a “paradoxical blend of personal humility and professional will.” Dubbing this “Level 5 Leadership,” he identifies several critical questions that are relevant for any economic development organization (EDO) to consider in its journey from good to great. Some of these questions are paraphrased below.
- Are the leaders who sit in the most powerful seats in your organization ambitious first and foremost for the cause, the organization, and the work – not themselves – and do they have an iron will to do whatever it takes to make good on this ambition?
- Do your leaders display an ever-improving track record of making decisions that prove best for the long-term greatness of your organization and its work?
- Do your leaders point to people and factors other than themselves to give credit for success, and when confronted with failures, own responsibility for them?
- Do your leaders inspire others by demonstrating standards of excellence, hard work, sacrifice, and integrity – rather than through an inspiring personality?
Getting the right people on the bus and in the right seats – and getting the wrong people off the bus – is critical for all seats, not just the most powerful ones, as illustrated by the companies studied by the Collins team. Great organizations, this research has revealed, focus on answering the question of “who should be part of our team” before the question of “what should we do.” This is perhaps the most fundamental responsibility of an EDO executive. Doing so will enable an organization to execute the right things at the right time.
However, this can be particularly challenging for EDOs for a number of reasons. First, as Collins points out is common for social sector organizations, it may be difficult to recruit the right people, due to operating in a resource-constrained environment. Second, given that the work at hand is often greater than the capacity to do it, each team member may be asked to occupy multiple seats. This makes it impossible to devote the energy required to ensure that each role is performed optimally. Third, even in organizations where these two factors are not at play, political and sociocultural barriers may prevent getting the right person in the right seat. And fourth, given the usually public nature of the organization, it can take an extraordinary amount of time and effort to get the wrong person off the bus. Sometimes this is just not possible, legally or otherwise.
Another challenge for the EDO is its usual high dependence on volunteers, including board members, to get the work done. It requires a high level of diplomatic and political savvy to get the right people in the right seats for such non-compensated yet vital positions. Putting the right Level 5 leader in the executive seat is an EDO’s best hope for overcoming these obstacles.
Disciplined thought
Great organizations, as shown in the research by Collins and team, confront and learn from the brutal facts of reality, rather than avoid or shy away from them. How does an EDO know where it can and should improve? It must create a climate where the truth is heard, according to Collins. This is where the EDO executive’s role as convener, connector, and collaborator – as described in IEDC’s report on High Performing Economic Development Organizations – is paramount.
The EDO executive must work to convene all affected stakeholders in conversations that generate ideas for addressing problems and pursuing opportunities. He or she must serve as a super-connector – to borrow from Malcolm Gladwell – in linking helpful people and resources to these problems and opportunities. The EDO executive also must foster collaboration among all parties to accomplish the good that is greater than what any individual entity can accomplish. Ideally, the EDO executive can serve as the ultimate facilitator and broker in creating a climate where all truths, even those difficult to hear, can be sounded; where the focus is not on credit or blame; and where any idea, even those contrary to the vocal minority or majority, can be weighed and measured.
A great organization must also collect and make excellent use of data, says Collins. It is not enough to act merely on the opinions or gut instinct of team members, despite how valuable such insights can be. Instead, EDO leaders must identify and study metrics relevant for understanding the facts of a situation and be willing to calibrate accordingly.
This is no small feat. Identifying metrics that all EDO stakeholders can agree on is an ongoing challenge in our profession, one which Collins explains is common among social sector organizations. Beyond this, data collection is not a simple task, but one which requires dedicated and consistent attention, and the appropriate expertise, to be done well. And despite sometimes unpleasant facts, great organizations, Collins notes, have an “unwavering faith” that that they can and will prevail.
Collins identifies three interlocking questions that every EDO wishing to go from good to great should consider. The first question is, “What can we be the best in the world at?” Given the “product” of the EDO is the community it serves, this question is critical to explore in a community context. This involves a significant and realistic investigation into the community’s strengths, weaknesses, opportunities, and threats to determine the competitive advantages an EDO can leverage in its work.
The second question is, “What are we deeply passionate about?” From a community standpoint, this often involves a unique blend of sociocultural, historical, and experiential factors seeded over decades. Understanding this blend helps discern what a community is really all about – that is, why it exists.
And the third question is, “What best drives our economic or resource engine?” For organizations like the EDO, Collins identifies three parts to consider – time, money, and brand. Regarding time, for the EDO, this is the time devoted by staff as well as volunteers. Money is reflected in the level of tax dollars, donations, or other financial contributions for sustaining the organization’s work. And the brand value can be assessed by the amount of loyalty, good will, and public support an EDO can earn and sustain for its work. What best drives the EDO’s economic engine? As one size does not fit all, this varies from community to community. However, for those EDOs that have a credible brand, the time and money will often follow suit.
These questions are also instructive to consider for getting the right people in the right seats. There is a greater likelihood that people will be best at what they are most passionate about, because such a passion will drive them to devote the time and energy (personal resources) to become their best.
Disciplined action
People do not have jobs in great organizations, says Collins – they have responsibilities. In high-performing EDOs, team members do not operate under significant rule-based constraints to accomplish what they are to achieve, and they understand that they will often need to go beyond the confines of their “job description.” While they still operate within a framework of protocols, they work entrepreneurially and also have a keen sense of the parameters associated with their flexibility to act.
In addition, as Collins points out, great organizations are not concerned with one “miracle moment,” but rather a series of successive accomplishments, often one building upon another. From an economic development leadership perspective, this flies in the face of the temptation to land a big project and then rest on the laurels. Great organizations are consistently great, to the point where you can observe a well-trod pattern even in the midst of leadership changes, because a successful “system” has been built. Staying committed to executing the mission and delivering results is standard operating procedure for high-performance EDOs.
Building greatness to last
Collins writes that great organizations can adapt and succeed through multiple generations of leaders; they are not built around a single great leader (nor a great idea or specific program). The key question he suggests we ask ourselves is, “Is our chief leader building a system that can prosper beyond his or her presence?”
This is a particular challenge among EDOs as succession planning is one of the least-executed management practices. How often do we hear about a once-successful economic development program becoming significantly weaker or extinct after the departure of a key leader? Unfortunately, in such cases, it is not merely the EDO and its team members who suffer, but also the community served by the EDO.
As stewards of the public trust, there is an urgent need for EDO leaders to focus on building greatness to last. This requires disciplined, steady attention not only toward building a team of high-performing players, but also in succession planning at all levels, so that people are continually in the right seats to help your organization achieve new heights.
Continuing the journey
To continually go from good to great, one must be a non-stop, life-long student of the good-to-great journeys of others. Fortunately, this is possible through the continued work of Collins and team. Ten years after the release of Good to Great, the sequel Great by Choice is now available. In this latest release, Collins and team reflect on the good-to-great journeys of leaders who have thrived in the chaos, uncertainty, and life-altering changes which have characterized our world in the last decade.
ABOUT THIS ARTICLE
Economic development leaders are true change agents for the world around them. The impact of their leadership on those they serve is untold and often cumulative in nature. This article is part of IEDC's ongoing series of articles on "Leadership in Economic Development" that focuses on the application of leadership principles to economic development practice. How do we respond to the call for dynamic and adaptive leadership given the ever-evolving economic, social, environmental and political considerations affecting our communities and organizations? This article, and the series as a whole, aims to contribute to the conversation. The author expresses sincere gratitude to IEDC's managing editor Louise Anderson for her partnership in producing the series.
[This article first appeared in Economic Development Now, a publication by the International Economic Development Council (IEDC), in November 2011 and appears here with permission.]
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