A Classic business book that has stood the test of time. I read it over 12 years ago and believe that his ideas are an incredible guide for any business that wants to be great.
“Good to Great” by Jim Collins is one of those classic business books that have stood the test of time. I read it over 12 years ago and believe that his ideas are an incredible guide for any business that wants to be great for a sustained period.
The book is based on the premise that “good is the enemy of great”. Collins fills the book with great examples after a researched study. He and his team answered the question: What common characteristics are shared by companies that made the change from good to great?
Collins, also the author of “Built to Last,” is a brilliant writer and incredibly curious. When the question came up about why certain companies are great overlong periods of time, he couldn’t resist beginning a multi-year research project to find the answer.
At the end of the first chapter, he invites the reader to join him in his“intellectual adventure.” His enthusiasm and curiosity are contagious and helps to make the research-heavy book easy to read.
To begin, he and his team came up with the list of companies that truly made the leap from “good to great”. They focused on comparison companies that helped to define what did and didn’t make a difference. Next, they reviewed financial documents, interviews and articles, coding everything as they went along. Lastly began the data analysis, the debates and eureka moments. The data spoke volumes and they were able to specifically identify common concepts in great companies.
Collins’ book is incredibly well-researched and documented. It’s quite long –300 pages – but the appendix and bibliography make up the last 100 of the pages. All the criteria and research methods are laid out in detail.
The concepts they discovered are a common set of ideas or strategies as follows:
1. Level 5 Leadership – Collins’ research team found that the first ingredient for greatness was a leader with a “paradoxical blend of personal humility and professional will.” Unlike many would expect, individuals at the helm of companies considered to be great were not high-profile flashy leaders with a claim to fame. They were quite the opposite. It all starts with leadership, but it turns out that the leader isn’t the most important thing in a business. Humility and steel resolve are a great leader’s strongest traits. They have ambition for their company more than themselves and want to set things up for success after they are gone. They are not big egos.
2. First who… Then what – The second step that great companies took was ensuring that the right people were employed by the company. Beyond simply having the right team, this part of the framework emphasises having the right people even before deciding where the company is headed. In a nutshell: “Get the right people on the bus, the wrong people of the bus, and the right people in the right seats – and then figure out where to drive it.”
3. Confront the Brutal facts – This boils down to facing reality in order to truly make good decisions about the direction of the organization. However, in doing so, Collins’ team found that great organisations also maintained unwavering faith (resilience) that they would prevail no matter how harsh the reality proved to be. Great companies also face the awful or brutal truths of their business head-on: “confront the brutal facts, no matter how brutal they are”. They constantly review and act on data, no matter how unpleasant, but at the same time, they keep unwavering faith in their vision and goals. They are not scared to confront issues quickly.
4. The Hedgehog Concept – A core component of Collins framework, the hedgehog concept requires organizations to base their strategy on three dimensions: 1. What you can be best in the world at, 2. What drives your economic engine, and 3. What you are deeply passionate about. 5. A Culture of Discipline – Collins believes that bureaucracy, hierarchy and lots of rules are only necessary when the wrong people are on the bus. In a culture of discipline, the right systems are in place yet there is sufficient freedom for people to deliver results. 6. Technology Accelerators – Good-to-great companies never use technology as an excuse for their problems nor do they depend on it to propel them forward. Rather, they are thoughtful in their approach and choice in technologies, using it as an accelerator of momentum. 7. The Flywheel and Doom Loop concept then goes on to explain that companies never make a leap from good-to-great with a magnificent moment or grand program. It comes down to consistently building momentum until there is a breakthrough. The interesting thing is that these breakthroughs are never explicitly planned. None of the great companies had grand programs or initiatives in mind as they made their journey. This surprises many people who think that companies need unique or innovative strategies to win in the marketplace. One brilliant idea that Collins discusses is a “Stop Doing List”. He suggests that we keep our regular to-do lists, but we also start thinking about what needs to stop, and what’s holding you or your company back. What is your data telling you? Face the hard truths and make deliberate choices to stop activities that no longer make sense. Ultimately, Good to Great is a must-read as it provides unprecedented insight into the dimensions of leading a company that consistently delivers results, demonstrates excellence and can one day be considered great.