Good to Great: Why Some Companies Make the Leap...And Others Don't (Good to Great, 1)

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 Collins

Level 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 Buffet

Another 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.

I have to admit that I was skeptical at first about how a book about big companies moving from good to great would apply to my entrepreneurial endeavor. But, at the recommendation from a business man I greatly admire, I read the book and I am SO glad I did. As I read I started thinking and applying what I was reading to my own enterprise. I believe this book has helped me clarify where I need to focus and the steps to take to build my own great enterprise!

Jim Collins states in his book, "Good is the enemy of great. And that is one of the key reasons why we have so little that become great...We believe that almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously applies the frame work of ideas we've uncovered." After reading that statement I became very curious and wanting to continue reading to see what are the components that make a good company to be a great company, in hopes of maybe being apply it myself one day I really enjoyed the way in which Collins organized the book. From his five year research study of 28 different companies Good to Great discusses key critical concepts revealed through his studies as to why some companies became successful great companies, while the others continued to be good. Collins found from his research within a great company you will have discipline people, with discipline thought, drives discipline actions. Within each discipline it is broken down into a subset of two components: I. Discipline People a. Level 5 Leadership b. First Who... Then What II. Discipline Thought a. Confront the Brutal facts b. Hedgehog Concepts III. Discipline Action a. Culture of Discipline b. Technology Accelerators I believe by organizing the book in this matter enabled me to really understand the severity of the critical components and how their relationships if applied will in allow a good company to become a great company. Starting with Discipline People, Collins conducted and analyzed his research by introducing the types of leaders you would find in a great company versus those in a just a good company and the characteristics that these great leaders possessed, such as humility and will. They lead with the interest of the company and not for their own selfish reasoning. Next was the First Who ...Then what which discuss getting the right people on board and the wrong people out. Collins states, "People are not your most important assets. The right people are." Collins stresses the importance of first getting the right people in the right places in your company and weeding out the wrong and then figure out where your company wants to go. Next is the Discipline Thought, within the subset of discipline thought a company must possess the ability to confront the brutal facts and not live in denial. Being able to do this will allow the company to stay updated and proactive when faced with making decisions. Collins presented a methodology for the companies to be able to face the truth. He says an organization must lead with questions not answers, engage in dialogue and debate, and use the "red flag mechanism" where anything that is red flagged is information that cannot be ignored and must be handled immediately. Collins also mentioned under the category of discipline thought is the Hedgehog Concept. The Hedgehog Concept is about a Fox and Hedgehog, where the Fox (good companies) knows a lot about variety of things whereas the Hedgehog (great companies) knew a lot about one thing. Being hedgehog is more beneficial for both the company and the individual because it the clarity drives focus and direction whereas the fox has neither one direction nor focus which can backfire later down the road. Lastly, having discipline people with discipline thoughts will drive to discipline action which uses the culture of discipline and technology as another tool to help transform the company from good to great. Collins also refers to the Flywheel Concept. He says that a good to great company never happens all at once it take a lot of effort and time to get it going, like the flywheel. The flywheel requires a lot of pushing to get it to turn and after x amount of time it will begin to gain momentum. Throughout the book Collins gives great examples for each discipline and its component and how it either went from good to great or continued to be good. Along with the examples Collins provides pleather of diagrams and charts in the appendix, which becomes a great reference for the reader and creates a better understanding of what is needed to go from a good company to a great company. Generally the book is a very easy read which makes it that much more interesting to want to apply to your company or even for yourself. It takes the feeling of the impossible away, like Collin stated, "We believe that almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously applies the frame work of ideas we've uncovered." Overall if you are looking to transform your company, Good to Great is a read that I highly recommend.

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."