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Jim Collins Speaks the Truth
JAL: Do you think that when the economy is down, when there is significant uncertainty in the global political environment, and, generally, when many organizations seem to be having a difficult time, that it is a little easier for people to confront the brutal facts? JC: That’s an interesting question. I’ve never actually really thought about whether there are easier or more difficult times for confronting the brutal facts. If you think of the need for confronting the brutal facts as fitting in a broader framework — disciplined people who engage in disciplined thought who then take disciplined action — in difficult times, you don’t need the discipline to confront the brutal facts, which is a part of disciplined thought. As a result, less disciplined people will have the brutal facts forced upon them. Whether they then take disciplined action in response to those brutal facts is a whole separate question. So the times themselves may make it more salient, or you may experience in a more visceral way what those brutal facts are. One of the things I observed is that the folks who don’t have all three pieces of the framework tended to react in very undisciplined ways when the brutal facts were foisted upon them. This is the key point: While confronting the brutal facts is an active process, reacting to the brutal facts is a sign of mediocrity. JAL: So why do you think it’s so difficult for so many organizations and their leaders to confront the truth about the business realities they face? Is it simply a question of not having the courage to do it, or is there something deeper going on? Why is this so difficult for people to do? JC: Let me answer that by telling the story of what I observed in A&P versus Kroger, two companies that confronted brutal facts very differently. I go back to the time when Kroger and A&P were wrestling with the undeniable fact that their entire world was changing around them. After more than 80 years of old, dreary grocery stores, the brutal truth was that the future lay in what today we call superstores. When you take a look at the behavior patterns of these two different organizations back in the late 1960s and early 1970s, you find that what the folks at A&P found frightening was not the facts themselves but the consequences of those facts. The consequences were that you were going to have to systematically go to every single one of your stores and either shut it down or redo it as a superstore. You were going to have to do that store by store, street by street, city by city, state by state, for thousands of stores, and it was going to take decades to complete. At A&P, they just melted in the face of those consequences and started looking for some way to not have to confront what this really meant. It was just overwhelming to them. So, they tried new CEOs and lower prices, and they tried vision statements and to rally troops when, in fact, what they really needed was to just simply say, “You know, we’re going to have to shut down every one of our stores and convert them into superstores, or shut them down for good. And it’s going to take us probably two decades, and we’ve got to do it for thousands of stores, and it’s going to cost us billions of dollars. What a bummer. Guess we’d better get to work.” As for the Kroger people, that’s exactly what they did. They were just stoic, matter of fact, and they just faced the consequences head on. So, when I look at the question of why is it so hard to confront the brutal facts, I observe that it is not the brutal facts themselves that people have difficulty confronting but their inevitable consequences. This is one piece of the puzzle. There is a second piece, namely the importance of doing autopsies without blame. This notion of blame really is crucial. When I look at people who can actually confront the brutal facts of why a particular business decision turned out to be such a disaster, it’s because they had the ability to do autopsies without assigning blame. One of the constant, pervasive, and dampening effects on being able to confront the brutal facts is the search for people to blame for things that went wrong or didn’t work. Instead of blaming people, leaders need to look at this work as an autopsy, an attempt to try and understand what actually happened and not to assign blame to individuals. The best way to do that is for the CEO to be the one to look in the mirror and to say, “I shoulder all of the responsibility. In the end, I am to blame. Okay, now that we’ve got that out of the way, let’s talk about what we can learn from this.” 
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Summer 2003
