Nasty facts

Success requires confronting the nasty facts, while never losing faith.

Good-to-great companies constantly walked the line of the so-called Stockdale paradox, named after a US admiral captured during the Vietnam War.

As a high-ranking officer detained at the infamous “Hanoi Hilton” prison, Stockdale was tortured repeatedly by the enemy and did not know if he would ever see his family again. Despite the dire circumstances, he never lost faith that somehow he would get home.

Neither did he indulge in foolish optimism like some of his fellow prisoners, who believed they would be home by Christmas, and were heart-broken when it did not happen. Later, Stockdale credited his survival to his ability to confront the facts of his situation while still retaining faith.

In the same manner, good-to-great companies confronted the brutal facts of their reality, and yet still retained unwavering faith that somehow they would prevail in the end.

Whether they faced stiff competition or radical regulatory changes, good-to-great companies dealt with the facts head-on instead of burying their heads in the sand, and still managed to keep their spirits up. For example, when Procter & Gamble (P&G) invaded the paper-based goods market, the two major existing players reacted very differently.

The market-leader, Scott Paper, felt that their game was up and that they could never compete against a giant like P&G. They tried to diversify and stay in categories where P&G did not compete.

At the same time Kimberly-Clark relished the opportunity to compete against the best, and even held a “moment of silence” for Procter and Gamble in one of their executive meetings.

The result: two decades later, Kimberly-Clark actually owned Scott Paper and dominated P&G in six out of eight product categories.