Good to Great: Why Some Companies Make the Leap … and Others Don’t by Jim Collins
Jim Collins presents his findings on how some companies are able to transform themselves from mediocrity to sustained greatness. The following is not a summary of his book but excerpts that I find most interesting and relevant.
Chapter 1: Good is the Enemy of Great
The good-to-great companies paid scant attention to managing change, motivating people, or creating alignment. Under the right conditions, the problems of commitment, alignment, motivation, and change largely melt away … the good-to-great companies had no name, tag line, launch event, or program to signify their transformations. Indeed, some reported being unaware of the magnitude of the transformation at the time; only later, on retrospect, did it become clear. Yes, they produced a truly revolutionary leap in results, but not by a revolutionary process. (p. 11)
Chapter 3: First Who … Then What
The executives who ignited 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 I 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.” (p. 41)
Chapter 4: Confront the Brutal Facts (Yet Never Lose Faith)
The Stockdale Paradox: Retain faith that you will prevail in the end, regardless of the difficulties, and at the same time, confront the most brutal facts of your current reality, whatever they might be. (p. 86)
Chapter 5: The Hedgehog Concept (Simplicity Within the Three Circles)
1. What can you be the best in the world at (and, equally important, what you cannot be the best in the world at). This discerning standard goes far beyond core competencies. Just because you possess a core competence doesn’t necessarily mean you can be the best in the world at it. Conversely, what you can be the best at might not even be something in which you are currently engaged.
2. What drives your economic engine. All the good-to-great companies attained piercing insight into how to most effectively generate sustained and robust cash flow and profitability. In particular, they discovered the single denominator – profit per x – that had the greatest impact on their economics.
3. What you are deeply passionate about. The good-to-great companies focused on those activities that ignited their passion. The idea here is not to stimulate passion but to discover what makes you passionate. (pp. 95-96)
Chapter 9: From Good to Great to Build to Last
… [I]t is no harder to build something great than to build something good. It might be statistically more rare to reach greatness, but it does not require more suffering than perpetuating mediocrity. Indeed, if some of the comparison companies in our study are any indication, it involves less suffering, and perhaps even less work. The beauty and power of the research findings is that they can radically simplify our lives while increasing our effectiveness. There is great solace in the simple fact of clarity about what is vital, and what is not. (p. 205)
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