Good to Great

Why Some Companies Make the Leap... and Others Don't

Good to Great Flywheel Concept

Good is the enemy of great! This is how 'Jim Collins' starts his book 'Good to Great, Why Some Companies Make the Leap... and Others Don't'. In this book, Collins follows a set of great companies that have been successful and compares them to another set that shared the same markets, conditions and changes. His research methodology was a little bit different. He didn't assume a hypothesis and tried to prove it. Rather, he examined the data and extracted the theory right out of it.

He identified few concepts to overcome the 'good' state you're in and leap to greatness. These concepts include:

Level 5 Leadership

Good to Great, Chapter 2-4, Level 5 Hierarchy

 In his research, Collins found that every great company had a level 5 leader who has a paradoxical mix humility and professional will. They always seek success and they're ambitious for the company they work in not for himself. This level 5 leader always set up their successors for far more greatness and sustained successes.

First Who.. Then What

Building the previous chapter, Collins found that selecting your team members then assigning their tasks is the right thing to do. Find the best match for your team, your culture and goals first, then, anything you want to do will be achieved. The goals can be right or wrong, simple or seemingly impossible. In one of his great companies, the market was anticipating an extreme change and new legislations that no one can anticipate. Therefore, the company hired the best talents and those managed the ship our of the storm with sustained success.

Confront the Brutal Facts

In the summary of this chapter, Collins found that any success process in great companies always started by confronting the facts of their current reality. This aids you in making the right decisions based on a climate of truth and honesty, that's shared across the entire company.

The Hedgehog Concept

You may need to read 'Success: Built to Last' by the same author to get the complete picture of this concept. In short, hedgehogs maintain a unified goal and works to achieve it with a single unified super big plan. While foxes hunt down everything in everyway following tons of intersecting plans. "Hedgehogs are not stupid. Quite the contrary. They understand that the essence of profound insight is simplicity." That's how Collins describe them.

A Culture of Discipline

Discipline can be forced, but that, usually, makes you makes you a tyrant after a while. Rather, it should be a culture embraced by your team and employees. Collins, as he himself stated in the book, almost excluded this chapter, but after running an in-depth analysis they found it evidently making a huge difference. Although both great and comparison companies had discipline, Level 4 Managers used sheer force and personally disciplined the company. The result was good for some time, but it was never sustained after the manager has left his post.

Technology Accelerators

Before you rush in, technology is an accelerator of momentum building, not its creator. Although leaders of the great companies in the book almost neglected the effect of technology, but it was a key factor in their success. They didn't talk about it because they usually created the technology, and they weren't reactive or lagging behind trying to catch up with it. There pursuit to improve time after another made them pioneers via creativity. The comparison companies were motivated by the fear of being left behind.

Technology here includes everything. Not just software to run your business, but rather include machinery and communications to name only a couple. Great companies in many cases didn't create the technology or start having one, but they became pioneers in its application and usage. Finally, great companies carefully selected the technologies they needed and can significantly contribute to their hedgehog concept.

The Flywheel and the Doom Loop

It's not a secret anymore. Success isn't found or built overnight. It takes time and great dedicated effort to build momentum and then achieve success. In every great company, there was one definitive action, time, incident, killer program, new innovation or even luck. It's cumulative and a step-by-step process. Looking from the inside of great companies, success wasn't an event unlike what the media looking from the outside will tell you. The media will only talk about a company once it has achieved something extra-ordinary, or else, there's no news for them to talk about.

From 'Good to Great' to 'Built to Last' and others

Although 'Good to Great' came after writing 'Built to Last', it is actually a prequel to answer the question: Why some companies make the leap, even though many others share the same environment, conditions, markets, opportunities and loads of other factors. The difference lies in that 'Built to Last' studied companies built from the ground up for greatness, while 'Good to Great' studied how existing businesses made the transformation. Both book took years of research, and studied tens of companies were some endured since the 1800s.

If you like this author, you can read his 'Great By Choice' that studies how companies can deal with uncertainty, chaos and luck, and why some thrive despite them all, which came out after 10 years from 'Good to Great' publication.