Summary of ‘Good to Great’ by Jim Collins
“Good to Great” is a bestselling book written by business guru, Jim Collins. He summarizes research compiled by his team of twenty people who spent five years studying 11 companies that posted exceptional results over a fifteen-year period. These companies achieved exceptional growth rates and stock market performance. The investigation attempts to distil how these 11 companies went from “good to great.” What they found were seven common characteristics:
Leadership: The best performing companies are led by humble, goal-oriented leaders. Despite their low-key style, they are tenacious about the performance of their organizations. Collins refers to this style as a “Level 5” leadership style, and unlike traditional charismatic leaders, Level 5 leaders are reserved yet tenacious at the same time.
The right people: Collins describes getting the right people with the right skills on the team as “first who, then what.” Alternatively, she says, “Get the right people on the bus, then figure out where to go.” Therefore, the first priority for leaders of successful companies is to ensure that they have the right people in key positions.
Facing Reality: Successful business leaders also “face the brutal facts” of their situation. They are honest about what works and what doesn’t; furthermore, they do not sugarcoat your situation or the operating environment. Even when the news is bad, they face reality because they know this is the only way they can finally make realistic plans moving forward.
Hedgehog concept: The hedgehog concept is a simple but central concept to these successful companies. Like the animal from which the concept derives its name, these leaders lower their heads and move forward with intense effort. Their companies focus on a few simple goals: how they make money; What they are best in the world at doing; and What motivates them to succeed.
Discipline: The leaders of these companies instill a high level of discipline in their organizational culture. Discipline helps to concentrate effort and take advantage of resources.
Technology: These companies use technology to help accelerate their growth. Technology is a way to harness resources to achieve your goals. In military language, the technology would be called a “force multiplier.”
The steering wheel: The flyer refers to the concept of “success begets success.” As these organizations become more successful, their growth begins to accumulate like momentum on a flywheel.
As with all similar studies of high-performing organizations, over time some of the target companies stumble and fall. It is difficult to maintain exceptional performance for an extended period of time. The original study was completed in 2001, and since then some of these companies have struggled, including Circuit City and Fannie Mae among them. However, these seven principles remain important characteristics found in many successful organizations, and should be considered by leaders who want to grow their companies as they develop their own vision for the future.
