Great Read | Good to Great: Why Some Companies Make the Leap... and Others Don't

Good to Great | Good to Great: Why Some Companies Make the Leap... and Others Don't | Jim Collins

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	• Good to Great: Why Some Companies Make the Leap... and Others Don't Jim Collins HarperBusiness, 2001 - 300 pages average customer review:based on 786 reviews view larger image
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highly recommended

The roadmap to understanding visionary leadership

After having read, Built to Last, I was convinced that Jim Collins had written the most important book about business in the last 15 years. After reading Good to Great, I realized I was wrong. Jim Collins has a true talent for taking the most important and deeply misunderstood concepts in business and showing people how they work.

One of the most interesting aspects of this book is that it shines a light on the face of many management teams. This light is not always welcome. I was surprised that most of the people I talked to after having read this book felt that they were doing the things a visionary leader should be doing. It goes to show that the devil can quote the Bible for his own purposes.

The biggest take aways I found in this book were focused on the concepts for doing ONE thing and doing it well and with "Rinsing the Cottage Cheese". I believe that if many companies would focus on one thing and then refine the processes for doing it really well, then there would be more truly great organizations in the world.

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Great Read

Got this book for a Business Strategy class, but read it in a few days. It was a very interesting book and had a lot of insight into what companies need to make the transition from Good to Great. It is very interesting considering the current state of some of the companies selected in the book that did well.

Good to Great

Although this book was written about successful businesses, I read it with school reform in mind. I hope to see our schools move from good schools to great ones in the next few years. I found the book easy to read and inspirational.

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Good To Great

In the last year I have been trying to develop the Engineering Club that I sponsor into an enduring during company. The Book Good to Great has provided me the insight to achieve this goal. For example, in reading the chapter on Level 5 Leadership, I realized that I have been a Level 4 Leader- the success of the organization has dependent too much on my guidance. So, I have decided to have members take ownership of their organization: For example, the officers of the club will start running the meetings, instead of me deciding the agenda.
Also, technology does not make a great company. In fact, in the past several companies with superior technologies have not become great companies. For instance, Apple computer has always been a better machine that the PC, but it almost went out of business because it lacked a Hedgehog approach. In other words, companies that applied technology consistent with their core values increased momentum toward greatest. Thus,
incorporating the latest technology will not make a great company
Furthermore, a company's flywheel starts to move when they develop Hedgehog vision, focus in one area where they can be the best in world. Do not expect the wheel to move fast at first, it will start slowly. For example, its hard to change the state if inertia. Yet, if you apply enough force, a company can move in the right direction. Furthermore, once you get the flywheel moving in the right direction, each application of the force will only increase it momentum, "inertia in momentum."

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Review: Good to Great

RECAP

Good to Great, by Jim Collins, is based on 5 years of research that tries to explain "why some companies make the leap...and others don't." The research involved selecting over 1400 companies that made the Fortune 500 from 1965 to 1995. Through a series of 5 cuts, the research team whittled the field down to 11 companies that were categorized as good to great along with a group of direct comparison companies. The book presents 5 key findings, including:

* The presence of what Collins termed "Level 5 Leaders"
* A deep understanding of purpose and simplicity termed the "Hedgehog Concept"
* A culture of discipline
* The role of technology as an accelerator
* Consistent effort to produce results as opposed to big breakthroughs or radical change

Lastly, Collins related the findings from the book to findings in his book, Built to Last, which was published a couple years later. Collins stated that findings from Good to Great enabled the ideas in Built to Last and pointed to a connection between BHAGs (Big Hairy Audacious Goals) and the Hedgehog Concept. He stated that a BHAG is a key way to stimulate progress while preserving the core, which provides a unifying focal point of effort and framed by specific understandings. Essentially, a BHAG lies at the core of the 3 elements of the Hedgehog Concept.

PROFESSIONAL VALUE
In terms of the value I would place on the findings from this book, I would say that there are definitely useful points. However, most of those key findings seem most applicable to CEOs and to a lesser extent CMOs. There should be collaboration between chief executives to strive for greatness, but by nature of hierarchies, a CMO would not be able to establish the elements necessary to help a company achieve greatness.

WHY THIS BOOK
I was aware of this book for some time, but never took the time to read it. I had heard that some of the concepts could be applied not only to business, but to life as well, so that aspect interested me.

LESSONS LEARNED
There were many take-aways from this book, some of which I have actually applied to my life. The lessons that I found the most value in, either professionally or personally, include:

* The Stockdale Paradox
o Stoically accept the brutal facts of reality
o "You must never confuse faith that you will prevail in the end - which you can never afford to lose - with the discipline to confront the most brutal facts of your current reality, whatever they might be." - Admiral Stockdale
* The Hedgehog Concept
o Business
* What you are deeply passionate about
* What you can be the best in the world at
* What drives the economic engine
o Personal
* What are you passionate about?
* What can you be the best in the world at?
* Do you get paid well to do it?

IMPLEMENTATION
Implementing the key findings in a business setting would require high-level authority. From a marketer's standpoint, I would take these ideas to my future cohorts and seek collaboration. Some of the principles seem like they can be learned, taught, and/or gained over time, such as finding a Hedgehog Concept. However, there are others, such as Level 5 Leadership, which may not occur due simply to character, personality, or desire. From experience in both entrepreneurial settings and Fortune 500 settings, it's my opinion that establishing some of the principles in a company culture from the beginning make the chances of success, for any specific principle, higher.

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The Challenge
Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the verybeginning.

But what about the company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness?

The Study
For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?

The Standards
Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies, including Coca-Cola, Intel, General Electric, and Merck.

The Comparisons
The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to make the leap from good to great. What was different? Why did one set of companies become truly great performers while the other set remained only good?

Over five years, the team analyzed the histories of all twenty-eight companies in the study. After sifting through mountains of data and thousands of pages of interviews, Collins and his crew discovered the key determinants of greatness -- why some companies make the leap and others don't.

The Findings
The findings of the Good to Great study will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include:

Level 5 Leaders: The research team was shocked to discover the type of leadership required to achieve greatness. The Hedgehog Concept (Simplicity within the Three Circles): To go from good to great requires transcending the curse of competence. A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results. Technology Accelerators: Good-to-great companies think differently about the role of technology. The Flywheel and the Doom Loop: Those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap.

?Some of the key concepts discerned in the study,? comments Jim Collins, "fly in the face of our modern business culture and will, quite frankly, upset some people.?

Perhaps, but who can afford to ignore these findings?

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