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.

I've read over 100 books in the last 3 years, and both Good to Great and Built to Last are vital for any CEO/Founder to understand. Principles are applicable in life and business. I'd love to see updated version with Google, Meta, NVIDEA etc...

"Good to Great" by Jim Collins offers timeless insights into what elevates a company from mediocrity to excellence. Despite its publication over two decades ago, the principles it espouses remain relevant, making this book a worthwhile read for anyone interested in business leadership. The hedgehog concept, which emphasizes the importance of focusing on what you can be best at, deeply resonated with me and was a highlight of my reading experience.Collins artfully combines rigorous research with engaging storytelling, pulling out lessons that are both actionable and profound. Some of the most striking quotes from the book—such as "The good-to-great companies did not focus principally on what to do to become great; they focused equally on what not to do and what to stop doing" and "Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice"—underscore the book’s central message that great achievements stem from deliberate decisions and disciplined people.While the book might feel a bit dated in some of its examples, the core ideas about disciplined people, thought, and action provide crucial guidance for anyone aiming to transform their organizational culture from good to great. Highly recommended for its clear concepts and transformative insights. A solid 8/10.

I found Good to Great to be engaging and informative. I liked how Jim Collins deliberately explained how and why aspects of the research was analyzed and chosen for exhibition. The overall lesson to me is really to get people who are passionate about doing right by the customer, and being willing to grow organically taking one step at a time. This is opposed to getting people who need extra incentives to work thoughtfully and seeking that breakthrough idea to launch or save the company. It is a business example of the age old story of the Tortoise and the Hare. Plodding along on a clear path with the right intentions and focus gets you to the finish line more consistently than jumping around, cheerleading, and speeding through random ideas with great gains, then even grater losses. Yes, some might say a little simplistic and pithy, but I see it’s value in today’s culture. Many companies are following the prolific advice of other business books to ignite workers with prizes and rewards and diversify interests in multiple directions to maintain cash flow in the event that one market crashes. I have seen first hand how these exact traits keep companies bouncing around and experiencing large waves of ups with strong down turns and attract the wrong type of workers with no investment in the company. Jim Collins shares with us an old message that is still relevant, important and backed by research. Showing this in a business context is a helpful perspective to stay with your roots regardless of how big and important you think you have become.I Give this book 4 stars. I did drop one star for the abundance of repeated information. Information was summarized, a detailed chart was shown, then the chart was tiresomely recounted in sentence form.Overall I recommend this book to leaders in all professions as a reminder to keep honing in on your purpose and bring along only those people who can see, support, and champion that purpose from their own initiative.

Good to Great by Jim Collins is a compelling and informative book about how to be successful, and how to stay successful. The theme of success is shown through 11 companies who start out less or equal to share-market value, then sky rocket to a substantial increase becoming a “great” company, which in terms of Collins, at least three times the market over a consistent span of 15 years. By using a consistent level of market value increase as an indicator for success, the word “Great” used in this book has minimal bias and maximum meaning to the word itself; it’s not just someone’s opinion of just saying, ‘Oh yeah. My company is great!’ This book was written in 2001, so in between then and 2017, there are a few companies that decline from greatness after being written and proclaimed great in this book; I am very interested to see why some of Collins’ companies that were great, turn back into mediocre and bankrupt companies. Although there are some failed companies after being deemed great, the credibility and accuracy of the results found within Collins’ research remain true. This book is very well laid out, divided into easy to follow chapters that flow one right into the other; I found myself reading over 20 pages at a time without noticing until I took a break! Collins establishes the framework of success through three stages known as: disciplined people, disciplined thought, and disciplined action. Within each of these stages comes two key concepts that build off of each other: Level 5 Leadership, First Who Then What, Confront the Brutal Facts, The Hedgehog Concept, Culture of Discipline, and Technology Accelerators. Collins does not shy away from starting off strong in his book, saying “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice” (pg. 11). I found this quote profound because I believe that in order to make something more than just mediocre, one must be in an above-mediocre mindset. As an Industrial Engineer, I feel the need to have this mindset of greatness, in order to not only make a product, system, or company good, but GREAT. There are multiple layers found within this book where I could relate many of these proposed tools for a great company into using these tools to gauge for a great life. Even if you are not an Industrial Engineer, or any type of engineer for the matter, not an entrepreneur striving for success, not a CEO of a business trying to take a leap of faith into a huge growth of progress, I believe this book is still a GREAT read for any person! There are numerous lessons within this book that can be relatable to not only business, but everyday life. There is a whole chapter dedicated to figuring out who the right people should be going along with a company, then figuring out where to go with the company; First Who Then What. The First Who Then What shows why setting the correct priorities in any situation is important, and can be related to everyday life by knowing who to let into your life that will help you grow, and who to let go of; once you have the right “team” in your life, then you can figure out What you want to accomplish. Once the tools of greatness has been addressed, Collins completes his book by encouraging the reader to find greatness in all parts of one’s life; “As your work moves to greatness, so does your life,” (pg. 210). For these reasons already stated, I would highly recommend others to adapt a culture of discipline (also a main idea from the book) to read and get acquainted with Good to Great and keep their passions and lives GREAT.

Jim Collins utilized a systematic and technical approach to uncover good to great companies while at the same time providing the reader with an easy to understand explanation of how others failed to make the giant leap. As one follows Collins logic through the build up to breakthrough flywheel, a framework of key concepts emerges illustrating the correlation of specific factors that play a key role in making a company great. The ability of a mediocre company to evolve into a great company requires strict discipline. Good to Great explains in detail how specific disciplines pushed companies to rocket off the charts from the point of their actual transition. A couple of these concepts developed by Jim Collins really stuck out their head as I dug deeper into the book.“Level 5 leaders are a study in duality: modest and willful, humble and fearless”- Jim CollinsLevel five leaders are at the forefront of making a company great. Collins breaks down some assumptions and beliefs about what makes a CEO “great.” All good to great companies had level 5 leaders based on consistent patterns within the research data. He asks the question, “Does it take a larger than life leader that makes more money than you can imagine, to create greatness?” The simple answer is no. Rather, it takes a CEO born from within the company like, Colman Mockler, CEO of Gillete from 1975 to 1991, in order to get the job done for example. Mocklers understated presence as CEO, will to endure, and refusal to cash in when the going gets tough, based on Collins definition, is a level 5 leader. The concept of this level of leadership gives great insight into what current and future mangers of a company should strive to be.“They stick with what they understand and let their abilities, not their egos, determine what they attempt”- Warren BuffetAnother compelling concept developed while in the process of defining what takes a company from good to great is the Hedgehog Concept. This concept, as Collins describes, is one dependent on asking yourself three, what seem to be simple at first, questions about yourself and your company. What can you be the best in the world at, what drives your economic engine, and what are you deeply passionate about? These questions are known as the three circles. More importantly, the good to great companies analyzed in Collins research, were not the best at anything before hitting their point of transition, but were fully aware of what they could be the best at, and drove hard at their strengths to achieve such greatness. Defining realistic objectives and goals, finding your economic engine, and finding your passion are realized while implementing Collins Hedgehog Concept.Good to Great by Jim Collins is a fascinating read not for its technicality or empirical evidence in justifying what makes a company great, it is fascinating in its simplicity. Stepping back and really taking a disciplined approach to management seems obvious and yet your compelled to read every last word within the book.As I read deeper, it became clearer that the given comparisons of large fortune 500 companies are less about a company being great at one point in time, and more about the timeless principles of discipline that sustain greatness. My personal takeaway from this book is, complacency is the root of mediocrity, and mediocrity slowly kills greatness before it even has a chance to grow. I would recommend Good to Great, by Jim Collins, not only for managers but for anyone that wants to achieve their goals with the help of a proven framework.

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

is a macro analysis of differentiating factors identified in companies that made the "good-to-great" leap (defined as a period of fifteen-year cumulative stock returns at or below the general stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years), wrapped in a useful framework that any organization can apply.While the authors clearly made a strong effort to make the research process scientific, at times I felt like the book veered too far from facts and into the concepts invented by the authors to support their framework. Like a typical HBR article, this book sometimes suffers from too much labeling and framework-itization of simple facts. For example, the "Hedgehog Concept" and "Stockade Paradox" were catchy terms named after analogies the authors used to tie together fairly simple business concepts, and potentially took away from the core facts and concepts themselves.Regardless, the concepts in the book are highly valuable and the fact that they're supported by extensive research (rather than a single person's account of experiences, as many business books are) is powerful.Here were the concepts that were the most helpful to me:Level 5 Leadership - CEO's of great companies were not the loud, larger-than-life, wand-waving figures you might imagine. On the contrary, they were quiet, humble, and intensely driven.Hedgehog Concept - Great companies figured out 1) what they could be the best in the world at, 2) what they were passionate about, and 3) what their key profit driver was, and then focused on only things that fit into all three areas.Technology - Great companies were very discriminate in their application of technology to accelerate momentum, not create breakthroughs. If technology fits directly with your hedgehog concept, you need to become a pioneer in the application of that technology. If not, all you need is parity or none at all.Letting people go - "The moment you feel the need to tightly manage someone, you've made a hiring mistake."Stop doing lists - We typically try to build momentum by doing more. Great companies equally focused on what they should stop doing, whether it was eliminating title-creep or not channeling resources into things that fell outside their "Hedgehog Concept".Budgeting - Great companies use budgeting as a process to determine which areas should be fully funded and which should not be funded at all (versus spreading budget around to too many activities and not fully funding key areas).Acquisitions - Great companies used acquisitions as an accelerator of momentum, not a creator of it. Comparison companies frequently tried to create breakthroughs with large, misguided acquisitions.

Cut to the Chase:A well-written synopsis of 11 “great” companies and some of their similar characteristics, this is a fun, quick read that is great in terms of party trivia and information… but it’s tougher to judge if you’re looking for more of a business how-to. Partially, it has aged poorly — many of the companies selected have since had meltdowns of epic proportions (for example: Fannie Mae, Circuit City), and the “how to” part of the book feels generalized and far more subjective than the methodology/selection criteria would have you believe. Still, you’ll learn quite a few fun facts about how some of these business started and/or converted to become the giants they are today.Greater Detail:The main premise of this book is that though there are many very successful, long-lasting corporations out there (Coca Cola, GE, etc), there are a handful of companies that transcend just long-lasting durability, and become truly “great” companies. The selection criteria (mostly explained in the appendices) identified 11 “great” companies out of 1,435 analyzed, mostly via things like stock performance (the companies chosen were at about market average for about 15 years, and then jumped to being about seven times better than market over a period of 15 years, hence the title: good to great).The idea was to then take a more in-depth look at the 11 companies to see what similarities existed, and to then compile kind of a how-to in terms of what distinguishes the greats. Some of the ideas explored are things like:1. The Level 5 Leader — Collins proposes the idea of a leadership hierarchy of skills; a Level 5 leader is a dual personality of sorts — someone who is basically modest, but willful and stubborn, almost introverted and shy, but simultaneously fearless (this is kind of the opposite of say the CEO-centric view where Apple was in part defined by Steve Jobs as a leader and a personality, Bill Gates by Microsoft, etc). He argues that the Level 5 leader is someone who does what’s in the best interests of the company — no matter what (preparing for crises before they happen, sacrificing part of their lives often, etc). Counter examples given are leaders who so define the role that they’re unable to appoint successors, or have a successful successor — the argument here is about systematic management, filling the role that the company needs, for the good of the company, and almost without personal ego.2. The Flywheel and the Doom Loop — Even though the media sometimes portrays changes as though they’re instantaneously effective or immediately impactful, in reality, most companies that are successful slowly build momentum via a flywheel effect, constantly confronting the “brutal” truths and having faith that with discipline and continued effort and momentum, a breakthrough will happen. The Doom Loop is when there is a lack of patience that leads to continued cycles of new leaders, new directions, and new innovations, without ever waiting to see something through.3. The Hedgehog Concept — This is the concept of doing one thing really, really well. Here the argument is that you don’t have to be the best at everything, that Walgreens became a great company by getting rid of its restaurants (it had over 500 at one point) and focusing on what it was strongest in — being a convenient drug store. It focused on location, location, location (always being on a corner, for example), offering 24-hour pharmacies, flu shots, expanding into poorer neighborhoods, and being an almost pervasively convenient option for its customers. It basically asks companies to think about what they can really be best at and specialize a little, find something they are passionate about that they can truly excel at.As I’ve said, it’s an interesting read. and in terms of things to make you think, there’s a lot of good cocktail party fodder — is it better to have an invisible leader who sacrifices everything for their company? Or is there benefit to having a targeted leader to focus on (the Zuckerbergs and Jobses, leaders who are synonymous with a company’s image). But if you’re reading it now, more than a decade after its initial publication, it’s hard to take it as seriously when it talks about Fannie Mae (which has gone through a federal takeover/bailout) or Circuit City (which has filed for bankruptcy) or even Wells Fargo, which has had its share of legal and financial troubles. Also, though it’s a nice retroactive, backwards-looking book about what has helped 11 particular companies, it’s hard to know how much is truly applicable going forward. So in that sense, it’s less of a how to go from good to great, and more of an interesting, almost historical read, about how these particular companies made the jump (and then sometimes plummeted back).Comparisons to Other Books:I had a similar experience with Collins’s Built to Last, which was supposed to detail the successful habits of “visionary” companies. It was a fun synopsis of a six-year ...

I cannot state how valuable I found this book to be. As a business leader and an MBA it is not that the material was all new to me. It was just very clear and simple. There is no way I could provide the kind of value in this review that reading the book will so I will not try to summarize the book as much as I will encourage you read it.The book is based on a long research period by Collins and his team yet it is not technical and rarely get statistical. The book does contain multiple Appendixes that detail their selection process and a deeper look at the finding that helped them distinguish which companies met their benchmark of greatness. As for the body of the book though, it is clear text on the findings of their research and interviews and a lot of principles that can be clearly applied.I work for a non-profit service company so we have no inventory, no stockholders, and cannot control our product pricing (we provide human services tied to set federal contracts). But most of the findings on what created continuing great companies had little to nothing to do with the industry. Principles such as leadership, personnel, discipline and use of technology apply to almost any company of almost any size and industry. The chapters on confronting facts and discipline were even personally beneficial.I believe the book is also laid out well to build upon itself. One of my favorite chapters was chapter 8 on the flywheel. However, if it were not for the foundation and understanding build in the earlier chapters I would not have gained so much from it. The book is also written in a way that helps you come to your own conclusion, understanding, and application of its content. There are not a lot of pitch one-liners. It is more solid content that rings true.The only solid critique I feel I could make of the book is regarding the final chapter. Collins uses this space to compare the findings of this book to his previously successful, Built to Last. I admit I have not read BTL yet but it seemed he had to force the concepts to overlay a little more than they naturally do. He distinguishes that BTL was for start-ups that wanted to be successful long term. GTG is for average range companies that want to take that next step and then continue greatness. I think it’s OK those are distinctively different ideas and one does not have to be a selling point for the other.I highly recommend this book and would encourage you not to let your position, industry, company size or any other possible excuse make you think this book would not apply. There were even principles in here I think could be applied by my church. So please check it out!