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Book Summary: Good To Great

Book Summary: Good to Great

This article is based on the following book:
Good to Great
"Why Some Companies Make the Leap... and Others Don’t"
Jim Collins, co-author of ‘Built to Last’
Random House Business Books, London
300 pages

Explore what goes into a company’s transformation from mediocre to excellent.
Based on hard evidence and volumes of data, the book author (Jim Collins) and
his team uncover timeless principles on how the good-to-great companies like
Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor,
Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo produced sustained
great results and achieved enduring greatness, evolving into companies that
were indeed ‘Built to Last’.

The Collins team selected 2 sets of comparison companies:
a. Direct comparisons – Companies in the same industry with the same resources
and opportunities as the good-to-great group but showed no leap in performance,
which were: Upjohn, Silo, Great Western, Warner-Lambert, Scott Paper, A&P,
Bethlehem Steel, RJ Reynolds, Addressograph, Eckerd, and Bank of America.
b. Unsustained comparisons – Companies that made a short-term shift from good
to great but failed to maintain the trajectory, namely: Burroughs, Chrysler,
Harris, Hasbro, Rubbermaid, and Teledyne

Wisdom In A Nutshell:
a. Ten out of eleven good-to-great company leaders or CEOs came from the inside.
They were not outsiders hired in to ‘save’ the company. They were either people
who worked many years at the company or were members of the family that owned
the company.
b. Strategy per se did not separate the good to great companies from the comparison
groups.
c. Good-to-great companies focus on what Not to do and what they should stop doing.
d. Technology has nothing to do with the transformation from good to great.
It may help accelerate it but is not the cause of it.
e. Mergers and acquisitions do not cause a transformation from good to great.
f. Good-to-great companies paid little attention to managing change or motivating
people. Under the right conditions, these problems naturally go away.
g. Good-to-great transformations did not need any new name, tagline, or launch
program. The leap was in the performance results, not a revolutionary process.
h. Greatness is not a function of circumstance; it is clearly a matter of conscious
choice.
i. Every good-to-great company had “Level 5” leadership during pivotal transition
years, where Level 1 is a Highly Capable Individual, Level 2 is a Contributing
Team Member, Level 3 is the Competent Manager, Level 4 is an Effective Leader,
and Level 5 is the Executive who builds enduring greatness through a paradoxical
blend of personal humility and professional will.
j. Level 5 leaders display a compelling modesty, are self-effacing and understated.
In contrast, two thirds of the comparison companies had leaders with gargantuan
personal egos that contributed to the demise or continued mediocrity of the company.
k. Level 5 leaders are fanatically driven, infected with an incurable need to
produce sustained results. They are resolved to do whatever it takes to


make
the company great, no matter how big or hard the decisions.
l. One of the most damaging trends in recent history is the tendency (especially
of boards of directors) to select dazzling, celebrity leaders and to de-select
potential Level 5 leaders.
m. Potential Level 5 leaders exist all around us, we just have to know what to
look for.
n. The research team was not looking for Level 5 leadership, but the data was
overwhelming and convincing. The Level 5 discovery is an empirical, not
ideological, finding.
o. Before answering the “what” questions of vision and strategy, ask first “who”
are the right people for the team.
p. Comparison companies used layoffs much more than the good-to-great companies.
Although rigorous, the good-to-great companies were never ruthless and did not
rely on layoffs or restructuring to improve performance.
q. Good-to-great management teams consist of people who debate vigorously in search of
the best answers, yet who unify behind decisions, regardless of parochial interests.
r. There is no link between executive compensation and the shift from good to great.
The purpose of compensation is not to ‘motivate’ the right behaviors from the
wrong people, but to get and keep the right people in the first place.
s. The old adage “People are your most important asset” is wrong. People are not your
most important asset. The right people are.
t. Whether someone is the right person has more to do with character and innate
capabilities than specific knowledge, skills or experience.
u. The Hedgehog Concept is a concept that flows from the deep understanding about
the intersection of the following three circles:
1. What you can be best in the world at, realistically, and what you cannot be
best in the world at
2. What drives your economic engine
3. What you are deeply passionate about
v. Discover your core values and purpose beyond simply making money and combine this
with the dynamic of preserve the core values - stimulate progress, as shown for
example by Disney. They have evolved from making short animated films, to feature
length films, to theme parks, to cruises, but their core values of providing
happiness to young and old, and not succumbing to cynicism remains strong.
w. Enduring great companies don’t exist merely to deliver returns to shareholders.
In a truly great company, profits and cash flow are absolutely essential for life,
but they are not the very point of life.

IF YOU’RE DOING SOMETHING YOU CARE DEEPLY ABOUT AND IF YOU BELIEVE IN IT, IT’S
IMPOSSIBLE TO IMAGINE NOT TRYING TO MAKE IT GREAT.

By: Regine P. Azurin and Yvette Pantilla
http://www.bizsum.com
"A Lot Of Great Books....Too Little Time To Read"
Free Book Summaries Of Latest Bestsellers for Busy Executives and Entrepreneurs
Mailto: freearticle@bizsum.com

BusinessSummaries is a BusinessSummaries.com service.
(c) Copyright 2001-2002, BusinessSummaries.com - Wisdom In A Nutshell

About the Author

Regine is the General Manager of BusinesSummaries, a site that offers free-of-charge business book summaries from the latest best-sellers for busy executives and entrepreneurs

 

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