Don’t get bigger without getting better.
By Theresa Witham
How do you define excellence?
“If I asked most people ‘What is excellence?’ they’d tell me it’s being best in class, being a consistent high performer, or being innovative or a great place to work. They all certainly make sense, but I’m interested in what produces those outcomes,” explains Huggy Rao in episode 22 of the CUES Podcast.
Rao is the Atholl McBean professor of organizational behavior at the Stanford Graduate School of Business, co-author of a book called Scaling Up Excellence and lead faculty for CUES’ Strategic Innovation Institute.
“[In the book], our definition of excellence is: People do the right thing even when nobody is watching you over your shoulder,” he says.
Scaling isn’t just about getting big, he warns. A frequent mistake “when [companies] scale, they all think scale is about getting big. And that true. But it’s possible to get big without getting better and that’s a problem,” Rao says.
Executives tend to focus too much on what Rao calls the “footprint”: things like net income, market share, gross income, locations and headcount. “But if you only focus on the footprint and you forget the mindset, your footprint won’t survive long.”
When CUES approached Stanford about creating Strategic Innovation Institute™, Rao was excited. “For me, credit unions and other cooperatives, they form a vital elemental of the American narrative.” And credit unions face lots of competition from larger banks and other non-traditional players.
“How do you actually position yourself so that you can become bigger and you can become better? Because merely becoming big is not enough of a defense against competition from banks. You’ve got to get better.”
The experience at Strategic Innovation Institute is meaningful for the participants and Rao. “Each time, I’ve been profoundly touched by the participants, their willingness, their keenness to experiment, to challenge each other,” he says.
Why does Rao describe the program as being like a gym and what does he ask each participate to do on the final day? Listen to the episode 22 of the CUES Podcast to find out.
Theresa Witham is CUES’ managing editor/publisher.
Attend Strategic Innovation Institute™, July 23-28.