Good to Great – Jim Collins

Categories Book Reviews
Good to Great

Why Some Companies Make the Leap and Others Don’t

Good to Great is one of those books that pops up on almost every books you must read, or MBA alternative reading list. Collins and his research team set out to find what makes a company leap from a good company to a great company, sort of a precursor to his Built to Last work. The long-term success of the companies he identified is debatable, but he does offer sound advice that can be used at multiple scales.

  1. Level 5 Leadership – Collins coins the term level 5 leadership which exemplifies leaders who put others before themselves. These leaders are humble and know that success comes from cultivating a solid team around them.
  2. First Who…Then What – in order to use a cliche, put the right people on the right seats on the bus. Companies that made the leap to great made sure a solid team was built before focusing on strategy or product development.
  3. Confront the brutal facts – yet another cliche, take off the rose colored glasses. Make sure that you are searching for facts and not dreams, ensure that your managers are bringing information to you (even if it is information that you do not want to hear).
  4. The Hedgehog Concept – an intersect between what are passionate about, what you can be the best in the world at, and economics. If you find this intersect then this is the reason you are in business and focus on critical tasks that strengthen it. This is a concept that can certainly be argued and has been abused in practice.
  5. A culture of discipline – once again focuses on the who and not what. Great companies ensure all their employees work in a manner that is good for the company. Levels of bureaucracy often hide incompetence.
  6. Technology accelerators – this is not about developing technology or following fads. It is about using technology differently than your competitors. Eventually your competitors will catch up so make sure you are vigilant.

Enjoyable read but led me to ask a lot of questions about how accurate Collins is. There are numerous companies that Collins identifies as great, but have since faltered (Circuit City and Fannie Mae to be two). This may be due to them deviating from the points above or due to using historical data. The accuracy of Good to Great is touched on elsewhere on this site.

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