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

This book has come highly recommended by several of my colleagues. I thoroughly enjoyed Built to Last, so I was looking forward to this book as well, and I was not disappointed. Mr. Collins has another winner on his hands.A key message in this excellent management treatise is that true leaders build organizations that will last long after they are gone. They put excellent people together first and then figure out what the company will do. If the company already exists, they put the right people in the right jobs and then make sure that the company is headed in the right direction.This is right in keeping with what I have been suggesting to those attending my Ethics as a Business Process seminars. We need to make sure we are building human resources and processes for the long term and not be focused on the short term (quarterly) results. Focus on those short term results forces managers to make incorrect decisions for the STAKEHOLDERS.Another key point is that we need to account for the stakeholders not just the stockholders. When we are concerned about all those in our business chain, we do not make decisions that make only one group happy at the expense of others. So customers, employees, stockholders, and those in proximity to our physical plants and services must be taken into account as well.Collins presents the "Hedgehog Concept" and the three circles as a model to make his points. One circle is "What you are deeply passionate about." A second circle is "What drives your economic engine." The third circle is "What you can be the best in the world at." The intersection of the three circles is where we need to spend our time and energy. The Great Companies are more like hedgehogs--they know one big but simple thing and they stick to it, at all costs. They aren't the flashy technology companies, they are the tried and true long term companies that keep producing sustained great results.Collins also presents the concept of the Level 5 leader. Level 1 are highly capable individuals, level 2 are contributing team members, level 3 are competent managers, level 4 are effective leaders. And then there is the level 5 executive or leader who builds enduring greatness through a paradoxical blend of personal humility and professional will. Level 5 leadership is not just about humility and modesty; it is equally about ferocious resolve, and almost stoic determination to do whatever needs to be done to make the company great. Level 5 leaders are fanatically driven, infected with an incurable need to produce results, and they work at the intersection of the three circles.The book is documented with the Collins trademark studies, surveys, and interviews. He gives us a periodic view of how his research team argued over and hashed out the details which resulted in this excellent book. And the surprise? The surprise is that this is not a follow on to Built to Last but rather it is best positioned as a prequel to that book. If you haven't read Built to Last, read Good to Great first and then read Built to Last. Both are excellent and by reading them in the suggested order, the puzzle pieces will simply fall together. Definitely a five out of five on my scale.

The information in GOOD TO GREAT came about from an extensive study of Fortune 500 companies by Jim Collins and his graduate student researchers resulting in an interesting collection of a few coherent but largely predictable conclusions. One of the few surprises is the relatively dowdy-seeming companies who actually performed well where many of the household "go-go" companies didn't make the cut.Reported are 11 firms that had outperformed the market by at least a factor of 3 consistently for at least 15 years; excluded from consideration were companies whose entire industry group was skyrocketing. These were each compared to a companion company from the same industry that did not do nearly as well. There were also 6 companies that were unsustained comparisons. From this the researchers uncovered a core set of success factors largely present in the Greats and missing from the not Greats:Outstanding leadership on a continuing basis following the same vision & mission (not necessarily the same person, but staying largely on the same direction). Start and maintain the necessary changes.First Who than What - the right people on the bus in the right seatsHave honest facts to evaluate, but keep faith in success from competency (not wishful thinking) - encourage and use healthy debate.The Hedgehog Concept - Simplicity Within the Three Circles (the intersection of What you're deeply passionate about, What drives your economic engine and What you can be the best in the world in). Tied into this is insight into your economic engine "what is your denominator" more appropriately what do you measure and what do you measure it against; the key metric is not always obvious. This might be sales per employee (Abbott), sales per local population (Kroger), profit per customer visit (Walgreens), or profit per mortgage risk level (Fannie Mae)The culture of discipline having honest and disciplined people eliminates the need for hierarchy or oppressive rules.Use technology appropriately to advance your mission, not as your core competence.The Flywheel and Doom Loop - Overcome inertia and maintain the effort - recognize that it takes time and effort applied in a consistent direction to get things going faster and faster; if the effort wanes or the direction changes, momentum is lost.

In my search for seeking mastery in my life, my expectations about "Good to Great" were not fulfilled until I read the last page at the end of the book. The 'smoking gun back at my face' was how it converged so well with the comments given on the first page at the beginning of the book! Here it is:In our personal and professional lives, there are an abundance of activities that we, as individuals, can accomplish that go far beyond settling for just a good life. Preferably, a meaningful life can be spectacular, even under the worse set of conditions, as long as one has 'a hand in creating something of intrinsic excellence that makes a contribution' to life. FABULOUS!This book reflects the extensive and timely research done over the period of ten years. Luckily, I read this book first. It is the 'prequel' to "Built to Last," written earlier. Jim Collins did his best to gather and report his data in empirical form, but remember the precision of how the statistics were collected and determined. This is just a subjective test. A defensive football coach may know that the other team passes on the fourth down, only 2 yards to go for the goal line, 85% of the time, and may still lose the game against the same team every year.Applying a different perspective (and please don't send me back to grade school), let's play in my sand box:1) The book finally settled on 11 finalists that survived all the rigorous filters and tests. Does that mean that the rest of the companies, including Microsoft, failed? Hardly! What about all the companies that did not attract enough notice from the media and public scrutiny? On another note. Jim Collins has become part of the 'enlightened establishment.' Incredibly intelligent and talented people surround him. His dynamo wife is a truly phenomenal woman. Even Jim Collins admits 'she had the genetics!' BAM! That is your reality and what an excellent life (WooHOO)! What about the rest of us lower mortals?2) It is unrealistic to get a 'partnership made in heaven' for the 'WHO, then WHAT' by getting the right people on the bus. Granted, matches like HP occur, and love at first sight is common. But, like marriages, most do not endure the test of time. However, consider expanding upon the analogy illustrated in the book.If the clean bus has a clearly marked sign indicated where it is going and even has a high-tech-electronically lit neon sign to flash alternate messages that indicate the street it is taking to get there (and the bus is marked with the name of the driver delicately stenciled next to the door along with a polished and attractive state-of-the-art coin machine to take and dispense the correct change), this is the strategy and vision of the bus driver (leader). The messages, signals and a few rules are clear to the person before jumping on the bus. This person can also get off the bus at the next stop. Only at this point is it prudent to select the right people to stay on the bus and to arrange them to sit at the right seat until the last stop to the beach for the sunset party.3) It is unrealistic to recruit enough Level 5 leaders into positions of power. They are simply overlooked. The Board and investors who deliberately pick the 'Celebrity Hogs' rarely consider them. I truly wish we had more Abraham Lincoln's!4) Technology should appear at the beginning of the entire process along with strategy. It must not be fully deployed because the needs are not completely known. However, it must be available at all times, at each process to accellerate the value of the company.This is an excellent book. It answers many difficult questions. It provides superb analytical thought and does a fantastic job reporting startling results. This is not a fad book. It should be required reading for all entrepreneurs who wish to shape the future and improve the quality of work in our lives.

In reading the reviews of this book you will likely think that either this book is a piece of trash, or a road map to being the greatest company on earth. However, this book is neither. What Jim Collins and his staff of researchers did was to analyze 1,435 companies that had appeared in the Fortune 500 to find 11 companies with a specific set of characteristics. A couple of the most key characteristics were that these companies had to have been good performers for a number of years and then gone through a transition phase where they achieved well above industry average in performance sustained for at least 15 years.Once these 11 companies were chosen along with comparison companies, Jim Collins and his research team looked for common characteristics between these companies. What they believe they found they defined as: having level 5 leadership; having the right people in the company; confronting the brutal facts of their situation; defining what a company is good at; discipline; and the flywheel effect. Collins also discusses the role of technology with an interesting conclusion. While you could likely have guessed some of what they found, Collin's assertion is that a company that has transitioned from good to great and sustained that performance would have each of these characteristics.What makes this book a great read? The support Collins provides for his conclusions. Collins rigorously assembled facts and then attempted to infer the common factors between the selected companies. While you may argue whether the selected companies will be great in the future, or whether other great companies exist that also made a good to great transition, the fact remains that he and his team did not waver in their criteria and they were able to observe the common characteristics that are described in this book.The greatest difficulty with the book is that it does not provide a roadmap for any particular company to make the transition. The reader is left to determine how his company might be able to achieve the characteristics of a good-to-great company, or perhaps, how to eliminate the characteristics of a company that would prevent the company from being great, or perhaps even good. One general point of agreement is that each of the defined characteristics is worthy of achieving.There are a few weaknesses in book. One question that we asked (the leadership team of my company) was whether level 5 leadership could exist with second tier management and not with the top leader. Collins seemed to think that the top leader in the company needed to be a level 5 leader, but we thought that a level 4 leader with a strong level 5 leadership at the second tier could well accomplish the same goal. We also looked at the recent stock market performance of the 11 companies chosen and discovered that more recently some of these companies had performed very poorly. We believe that an effective follow up to this book would be an analysis of companies that went from good to great to good or less than good to see whether a failure in one of the identified factors was the cause of the drop.This book offers a lot of thought-provoking information. It is a widely-read book because of the methodology Collins used in his data collection. It helps that this book is well-written and a quick read. Neither makes this book a perfect business book, but certainly the conclusions should make us all consider how we can make our companies better. An excellent companion book to "Built to Last."

One of the best books I ve ever read. Every business person should read it and practice its principles. I recommend it.