Self-discipline

A culture of rigorous self-discipline is needed to adhere to the simple Hedgehog concept.

Dave Scott is a former triathlete who used to bike 75 miles, run 17 miles and swim 12 miles every single day. Despite this grueling regime, he still had the self-discipline to rinse his daily meal of cottage cheese before eating it to minimize his fat consumption.

Good-to-great companies were filled with people with the same level of diligence and intensity as Dave Scott, working toward the simple strategy, the Hedgehog concept, which their company was following.

Consider Wells Fargo, a bank which understood that operating efficiency was going to be an important factor in the deregulated banking world. They froze executive salaries, sold the corporate jets and replaced the executive dining room with a cheap college-dorm caterer. The CEO even began reprimanding people who handed in reports in fancy, expensive binders. All of this may not have been necessary for Wells Fargo to become a great company, but it demonstrates they were willing to go the extra mile.

A culture of discipline is not the same as a single disciplinary tyrant. Tyrannical CEOs did sometimes manage a temporary spell of greatness for their companies, but they soon crumbled after the tyrant left.

Take for example Stanley Gault, the CEO of Rubbermaid who admitted he was “a sincere tyrant” and expected his managers to work the same 80-hour weeks he did. Once he left, Rubbermaid lost 59 percent of its value in just a few years, as no enduring culture of discipline was left behind.