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

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

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Good to Great: Why...

	Good to Great: Why Some Companies Make the Leap... and Others Don't Jim Collins Collins Business, 2001 - 300 pages average customer review:based on 694 reviews view larger image
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highly recommended

Going From Good to Great

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

By: Jim Collins

The book "Good to Great" is a report on the results of a lengthy business research study. Jim Collins and a team of researchers asked the question: "Why do some companies make the leap from being good companies to being great companies, and why not others?" Over the course of the book this foundational question is asked several different ways.

In chapter eight of "Good to Great" the author says that the fundamental question a CEO should ask is: "What can we do better than any other company in the world, that fits our economic denominator and that we have passion for?" (Page 180)

In chapter nine of "Good to Great" the author introspectively asked what motivated him to undertake the huge project in the first place. His motivation was to understand man's search for meaning, in his own words: "... why greatness ... the search for meaning, or more precisely, the search for meaningful work." (Page 208)

Jim Collins' previous book, "Built to Last" (NS) is a description of sustained greatness in American companies. After publishing "Built to Last" the author asked how companies got to be great in the first place. "Good to Great" answers that question.

Book Summary

Jim Collins and a team of twenty researchers studied the difference between companies that are good and companies that become great. The definition of greatness was made in very practical terms. A great company yields a sustained high return to the owners. For this research a high yield was seven times the general stock market over a fifteen-year period. The study took 10 ½ years of researcher effort and resulted in 2,000 pages of interview transcripts.

The change from "good to great" is guided by, what the author calls, a level five leader. The common characteristics of level five leaders are: modesty, humility, willfulness, courage and company orientation. Level five leaders are unselfish.

Executive compensation plans don't matter between good and great companies. The important thing is that they are reasonable and fair. Executive compensation has to make sense, but will not move a company from "good to great".

Great companies place more emphasis on character than on skills, education, special knowledge or work experience. Skills can be taught.

Great companies are tough places to work. Great companies are rigorous, but not ruthless. Managers and employees are held to high standards. Standards are ferocious and consistent. Great companies seldom have cost cutting layoffs, but underperformers are fired.

Practical disciplines for being rigorous rather than ruthless:
1. When in doubt, don't hire - keep looking. Place tremendous emphasis on finding the right people.
2. When you know you need to make a people change, act instead of delay. If you feel the need to tightly manage someone, you've made a hiring mistake. Do not hire a lot of people and keep the best.
3. Put your best people on the best opportunities and not the biggest problems.

Breakthrough results come about by a series of good decisions, diligently executed and accumulated, one on top of another. Start with an honest and diligent effort to determine the truth of the current situation. The right decisions often become self-evident. You absolutely cannot make good decisions without first confronting the brutal truth.

Four principles of creating an atmosphere where the truth is heard:
1. Lead with questions, not answers.
2. Engage in dialog and debate, not coercion.
3. Conduct autopsies without blame. With the right people it's not necessary to assign blame, but only to search for understanding and learning.
4. Build red flag mechanisms.

Organize the entire world into simple ideas. All the "good to great" companies had simple strategies. The simple strategy guided all their actions.

The simple strategic concepts come from three ideas:
1. Discover what the company can be best in the world at. Focus on this world-class strength.
2. Use insight into what drives your economic engine. Determine what single thing dominates profit and cash flow.
3. Decide what you are deeply passionate about.

Just because you have done something for a long time doesn't mean you can be best in the world.

A culture of discipline
1. Build a culture of freedom and responsibility within a framework.
2. Fill the culture with self disciplined people willing to go to extreme lengths to fulfill their responsibility.
3. Don't confuse discipline with being a tyrannical disciplinarian.
4. Exercise focus.

Freedom and responsibility together allow management to manage the system and not the people. People in great companies go to great extremes to fulfill their responsibilities, bordering on fanaticism. Interview and secondary sources made continual use of words like disciplined, dogged, rigorous, determined, diligent, precise, fastidious, systematic, methodical, workmanlike, demanding, consistent, focused, accountable and responsible.

The fact that something is a once-in-a-lifetime opportunity is irrelevant unless it fits into the corporate focus.

On the use of technology, the author quotes Bertrand Russell: "Men would rather die than think, many do." Technology, when used correctly, is an accelerator of momentum and not a creator of momentum.

Personal reaction to "Good to Great"

This entire study is just the sort of thing a statistician is trained and inclined to do. It was highly dependent on good experimental design, data collection and statistical technique.

Most readers want to be level five leaders and will see some of the traits in themselves. Most readers will realize that they are not yet there.

Jim Collins found quite a list of differences between his great companies and typical companies. In my opinion the most important difference is in leadership. The one most obvious difference between the two types of companies is the magnanimity of their leaders. Company executives usually rise within an organization by personal ambition. A level five leader makes the company great for the enhancement of the company, not for personal gain.

This book forces the reader to confront realities. Some common uncomfortable realities are:
- Most hiring policies will not get a company from good to great. Most hiring is based too much on skill and not enough on character. The level five leader needs to find people with the passion for the business.
- Focus is crucial and every leader knows it. However, many of us still allow ouryselfs to take on projects for reasons that seem good at the time and bad later. I call these projects one-off projects. They always take on far more energy and resources (especially time) than expected at the start. One-off projects sometimes are good opportunities, but they always take too much time and delay more strategic projects.

If a leader wants his/her company to go from good to great, the process will start with him/her.

References:

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

Built to Last: Successful Habits of Visionary Companies

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A Truly Great Book!

Wow! Good to Great is a wonderful book! It's full of fantastic ideas on how to build and sustain a powerful company! I suggest that you pick up a copy of this inspiring book right away!

Great Transaction

The book was receive in the condition that was expected and was delivered on time.

Greatness indeed

Originally I purchased this book because I had to read it for my Entrepreneurship class. This book is extremely well researched and the findings are resoundingly true. If you are a CEO, buy this book. If you are starting a company and want greatness, buy this book. I don't have my own company or even hopes of starting one soon, but when I do, I know exactly how I can make it great. This book takes you step by step on the path to greatness. The only downfall is that it gets a little redundant, and the last chapter didn't make a whole lot of sense because I haven't read Jim Collins other book "Built to Last." But, indeed a great book whether or not you do have a company. The principles can apply to any organization.

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Walking down memory lane

Having been born in the 1950s, this was a fascinating read about companies that I remember growing up with, and seeing how the leadership in these companies succeeded or failed. It is a very interesting read, with applications that could be made to leadership in any genre. Worth the time to read.

reviews: 1, 2, 3, 4, 5, 6, 7, 8, 9, page 10, 11, 12, 13, 14, 15, 16, 17, 18, 19

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