Good to Great is a business book by Jim C. Collins that can help anyone in the business world to turn their company or organization from a good one to a great one. This book was written after 5 years or research conducted on companies that have moved from being good to becoming good some of the great companies we know today. Read the complete Good to Great summary here for a glimpse of the lessons packed in this remarkable read.
Good is the Enemy of Great – “We don’t have great schools principally because we have good schools. We don’t have a great government principally because we have good government. Few people attain great lives, in large part because it is just so easy to settle for a good life.
The vast majority of companies never become great, precisely because the vast majority become quite good—and that is their main problem.” When you get complacent at being good you will never become great and therefore good becomes the enemy of great. Aim to become great.
Level 5 Leadership – this chapter discusses the five hierarchy levels that Jim Collins has identified in his research. A level 5 leader is the highest in that hierarchy. Here is how the five levels are described;
Level 5 (Executive) – builds enduring greatness through a paradoxical blend of personal humility and professional will.
Level 4 (Effective Leader) – catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.
Level 3 (Competent Manager) – organizes people and resources towards the effective and efficient pursuit of pre-determined objectives.
Level 2 (Contributing Team Member) – contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.
Level 1 (Highly Capable individual) – makes productive contributions through talent, knowledge, skills and good work habits.
First Who…Then What – “The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.
They said, in essence, “Look, I don’t really know where we should take this bus. But I know this much: If we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then we’ll figure out how to take it someplace great.”
Confront The Brutal Facts – as a business, it is essential to face the truths so that you can be able to change. He gives an example of Kroger and A&P two companies that were faced with some simple truths. Kroger faced their truth that customers wanted different stores, not different prices and therefore they started changing their stores. This made them rise over A&P that tried to lower their prices. Have meetings with employees where they can share freely without any blame so that the company can be able to adapt quickly to changes in the market.
The Hedgehog Concept (Simplicity within the three circles) – for your business to succeed it needs to be built around one thing. Most of the successful business do only one thing, and they do it well. That is the concept behind being a hedgehog and not a fox.
This one thing that you have to do will be centered around three interlinking concepts; what are you passionate about? What can you be the best at in the world? What drives your economic engine?
“Hedgehogs, on the other hand, simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything. It doesn’t matter how complex the world, a hedgehog reduces all challenges and dilemmas to simple— indeed almost simplistic—hedgehog ideas. For a hedgehog, anything that does not somehow relate to the hedgehog idea holds no relevance.”
A Culture of Discipline – without a culture of discipline a company will go through the entrepreneurial death spiral where it trips on its own success. It is essential that a culture of discipline is inculcated instead of relying on bureaucracy and hierarchy to account for the incompetence. When there is discipline things run on smoothly even when the company experiences enormous success.
“Few successful start-ups become great companies, in large part because they respond to growth and success in the wrong way. Entrepreneurial success is fueled by creativity, imagination, bold moves into uncharted waters, and visionary zeal.
As a company grows and becomes more complex, it begins to trip over its own success—too many new people, too many new customers, too many new orders, too many new products. What was once great fun becomes an unwieldy ball of disorganized stuff. Lack of planning, lack of accounting, lack of systems, and lack of hiring constraints create friction. Problems surface—with customers, with cash flow, with schedules.”
Technology Accelerators – it is good for a company to adopt technology, but a great company doesn’t lose its hedgehog focus. Use technology as an accelerator of momentum to achieve what you want to achieve rather than using it as a creator of momentum. To make good use of technology a company has to know which technologies are relevant to them and which are not. The relevant ones are those that link back to the three interlinking circles of the hedgehog concept.
The Flywheel and The Doom Loop – “No matter how dramatic the end result, the good-to-great transformations never happened in one fell swoop. There was no single defining action, no grand program, no one killer innovation, no solitary lucky break, no wrenching revolution.
Good to great comes about by a cumulative process — step by step, action by action, decision by decision, turn by turn of the flywheel—that adds up to sustained and spectacular results.” Every single decision and action taken will play a part in the success of the company. It is a cumulative effect not about a single defining moment.
From Good to Great to Build to Last – in this last chapter the author compares his two studies “Good to Great” and “Built to Last.” Inbuilt to last they had studied about 18 companies that have stood the test of time studying their history from the 1800s or before and what makes them stand strong all through. He states that when you adopt the principles discussed in Good to Great, you will be able to build a company that lasts.
What I Love About the Book
The book details a lot of research done on different companies and individuals who make companies soar from good to great. It is, therefore, one book that is packed with concepts that the reader can borrow. It is factual. It is also very well written and easy to understand even when you are not a manager or versed with business jargon.
Why You Should Read the Book
This book will help you become a better leader in your organization, to start a successful business, or run a successful company. The book inspires free thinking instead of being limited to what is evident to you and the other people you are leading.