Culture oF Discipline

*Bureaucracy

George Rathmann, cofounder of biotech company Amgen, help grow the struggling company into an entrepreneurial enterprise worth $3.2 billion and 6,400 employees. An investment of $7,000 in 1983 would have been worth over $1 million. George understood that the purpose of bureaucracy is to compensate for incompetence and lack of discipline ‐ a problem that largely goes away if you have the right people on the bus in the first place. Most companies build in their bureaucratic rules to manage the small percentage of wrong people, which in turn drives away the right people, which then increases the wrong people on the bus, which then increases the need for more bureaucracy. Rathmann understood an alternative existed: avoid bureaucracy and hierarchy and instead create a culture of discipline.

Set your objectives for the year in concrete, you can change your plans but never change what you measure yourself against.

*Discipline Action within the Three Circles

1. Build a culture around the idea of freedom and responsibility, within a framework.

The good‐to‐great companies built a consistent system with clear constraints, but they also gave people freedom and responsibility within the framework of that system. They hired self‐disciplined people who didn’t need managed, and then managed the system, not the people.

2. Fill that culture with self‐disciplined people who are willing to go to extreme lengths to fulfill their responsibility.

People in good‐to‐great companies became somewhat extreme in the fulfillment of their responsibilities, bordering in some cases on fanaticism. They will do whatever it takes to turn potential into reality – “Raising Your Cottage Cheese”

3. Don’t confuse a culture of discipline with a tyrannical disciplinarian.

The good‐to‐great companies had level 5 leaders who built an enduring culture of discipline, the unstained comparisons had level 4 leaders who personally disciplined the organization through sheer force.

4. Adhere with great consistency to the Hedgehog Concept, exercising an almost religious focus on the intersection of the three circles. Equally important, create a ‘stop doing list’ and systematically unplug anything extraneous.

The good‐to‐great companies followed a simple mantra: “Anything that does not fit with our Hedgehog Concept, we will not do. We will not launch unrelated business. We will not make unrelated acquisitions. We will not do unrelated joint ventures. If it doesn’t fit, we don’t do it. Period.”

*Start a ‘Stop Doing’ List – it is more important than a ‘To Do’ List