Good to Great (Book Review)

“Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” – Jim Collins

Five years after Built to Last (Jim Collins and Jerry Porras) Jim Collins is back with another extensive research on leadership, management and a basic how to run your company. This time the focus is shifted from the large corporations that have stood the test of time. He now looks at how to become great and stop being ‘merely’ good. Using a very large set of data (1,435 companies) and narrowing it down to 10 great and 10 good companies, the research is not something you can easily ignore. It is a great read and will definitely give you some food for thought!

In the first chapter ‘good’ is portrayed as the enemy of ‘great’. To transfer from the former to the latter he states you should succeed in three areas: 1) disciplined people, 2) disciplined thought, and 3) disciplined action. The first sign of these is found in the second chapter. Level 5 leadership is defined and examined. Level 5 leaders are not the people that usually make the cover of magazines, nor are they the ones that boss around people with great efficiency. They are the people that have the unusual mix of intense determination and profound humility.

5 – Executive – Building enduring greatness through a paradoxical blend of personal humility and professional will

4 – Effective Leader – Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards

3 – Competent Manager – Organizes people and resources toward the effective and efficient pursuit of predetermined objectives

2 – Contributing Team Member – Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting

1 – Highly Capable Individual – Makes productive contributions through talent, knowledge, skills, and good work habits[/toggle]

Another key concept in Good to Great is ‘first who, then what‘. Only with the right people, in the right place, you can truly achieve greatness. This may mean you need to sacrifice in the short-term, having to hire only the very best can take much longer than taking a suitable candidate. Removing employees from positions where they feel comfortable – but are not actively contributing to your company – can also be a tough thing to do. In the long-term, however, Collins argues it can save you time, effort, and resources.

Doing many things well is good, it is something you may even make a profit with. Doing one thing great (The One Thing), however, makes for a much more compelling story. Collins names this the hedgehog concept. For this he compared the strategy of a fox – who can attack the hedgehog via 100 different strategies – to the hedgehog – who just rolls up. It is about doing one thing better than anyone in the world. To find what your hedgehog concept is Collins proposes three criteria: Determine what you can be best in the world at and what you cannot be best in the world at; 2) Determine what drives your economic engine; and 3) Determine what you are deeply passionate about.

Growing your business can be seen as pushing a log along a road. It is a hard thing to do, but once you get started it can keep on rolling. The flywheel concept is about making this push easier. It is about getting more people behind the log, making the road smoother, rolling along a decline, etc.. Reducing resistance and improving your capability to make your company grow. Many companies, however, do not embrace this thought and keep pushing uphill, get other to push back or push a log that is actually still a three. The flywheel concept turns the hedgehog competencies into positive momentum.

“Visionary companies pursue a cluster of objectives, of which making money is only one—and not necessarily the primary one.” – Jim Collins

In the rest of the book, other concepts are also mentioned. Collins speaks about discipline, technology, confronting the brutal facts, and more. All together they outline a few key things any company should adhere to. With many years of research and as a leading management consultant, Jim Collins has quite the reputation going for him. In Good to Great, he proves his knowledgeability and teaches about how to become a great company. Written five years after Built to Last, it actually features as a prequel, but both books can easily be read independently.

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