I am not convinced that Jim Collins’s management classic Good to Great: Why Some Companies Make the Leap…And Others Don’t has stood the test of time, despite the “384 million bytes of computer data” accumulated during the process of putting it together. That the first of the good to great companies named in the book is Fannie Mae, which became “the best capital markets player in the world at managing mortgage interest risk”, does not help the case.
However, my purpose in this post is not to criticise the book or the management strategy genre in general, as there is no shortage of other places where that has already been done well.
What I want to do is admit some sympathy for the good to great ingredients that Collins identifies, particularly the idea of “First Who….Then What”. And then I want to ask – is there a something in that concept for the wealth of nations?
The idea of “First Who….Then What” is that, to change your company from good to great, you need to get the right people on the bus. It is only when the right people are on board that you should decide where you want to drive it. And the key to that sentence is “right people”. It is not “your people” who are the most important part of the company – the “right people” are.
This approach means that strategy comes after hiring. In a company full of the right people, good answers will tend to emerge. Questions such as compensation are not as important as you’re not trying to motivate the right behaviours from the wrong people.
You could draw a similar argument with what might make a nation great. Those nations with high-IQ, educated populations tend to have higher levels of economic development. Although rich countries tend to have good political institutions and policies that are not completely crazy, the direction of causation is population to institutions. If you have the “right” people in a nation, decent political frameworks tend to follow.
Of course, North Korea is the exception. But North Korea could become a classic case study in a few decades. Imagine if the dictatorship fell and North Korea came under a government similar to that in South Korea. How long would take for North Korea’s development to reflect that of its southern neighbour?