 | Good To Great CD: Why Some Companies Make The Leap...And Others Don't By Jim Collins
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Product Description
Built To Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the very beginning.
But what about companies that are not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness? Are there those that convert long-term mediocrity or worse into long-term superiority? If so, what are the distinguishing characteristics that cause a company to go from good to great?
Over five years, Jim Collins and his research team have analyzed the histories of 28 companies, discovering why some companies make the leap and others don't. The findings include:
- Level 5 Leadership: A surprising style, required for greatness.
- The Hedgehog Concept: Finding your three circles, to transcend the curse of competence.
- A Culture of Discipline: The alchemy of great results.
- Technology Accelerators: How good-to-great companies think differently about technology.
- The Flywheel and the Doom Loop: Why those who do frequent restructuring fail to make the leap.
- Amazon Sales Rank: #26408 in Books
- Published on: 2005-06-14
- Released on: 2005-06-14
- Format: Unabridged
- Original language: English
- Number of items: 1
- Dimensions: .1 pounds
- Binding: Audio CD
Amazon.com Review
Five years ago, Jim Collins asked the question, "Can a good company become a great company and if so, how?" In Good to Great Collins, the author of Built to Last, concludes that it is possible, but finds there are no silver bullets. Collins and his team of researchers began their quest by sorting through a list of 1,435 companies, looking for those that made substantial improvements in their performance over time. They finally settled on 11--including Fannie Mae, Gillette, Walgreens, and Wells Fargo--and discovered common traits that challenged many of the conventional notions of corporate success. Making the transition from good to great doesn't require a high-profile CEO, the latest technology, innovative change management, or even a fine-tuned business strategy. At the heart of those rare and truly great companies was a corporate culture that rigorously found and promoted disciplined people to think and act in a disciplined manner. Peppered with dozens of stories and examples from the great and not so great, the book offers a well-reasoned road map to excellence that any organization would do well to consider. Like Built to Last, Good to Great is one of those books that managers and CEOs will be reading and rereading for years to come. --Harry C. Edwards
From Publishers Weekly
In what Collins terms a prequel to the bestseller Built to Last he wrote with Jerry Porras, this worthwhile effort explores the way good organizations can be turned into ones that produce great, sustained results. To find the keys to greatness, Collins's 21-person research team (at his management research firm) read and coded 6,000 articles, generated more than 2,000 pages of interview transcripts and created 384 megabytes of computer data in a five-year project. That Collins is able to distill the findings into a cogent, well-argued and instructive guide is a testament to his writing skills. After establishing a definition of a good-to-great transition that involves a 10-year fallow period followed by 15 years of increased profits, Collins's crew combed through every company that has made the Fortune 500 (approximately 1,400) and found 11 that met their criteria, including Walgreens, Kimberly Clark and Circuit City. At the heart of the findings about these companies' stellar successes is what Collins calls the Hedgehog Concept, a product or service that leads a company to outshine all worldwide competitors, that drives a company's economic engine and that a company is passionate about. While the companies that achieved greatness were all in different industries, each engaged in versions of Collins's strategies. While some of the overall findings are counterintuitive (e.g., the most effective leaders are humble and strong-willed rather than outgoing), many of Collins's perspectives on running a business are amazingly simple and commonsense. This is not to suggest, however, that executives at all levels wouldn't benefit from reading this book; after all, only 11 companies managed to figure out how to change their B grade to an A on their own.
Copyright 2001 Cahners Business Information, Inc.
From Booklist
Collins is coauthor of Built to Last: Successful Habits of Visionary Companies (1994), the widely heralded book that was the result of a six-year research project conducted by Collins and Jerry Porras. They identified 18 companies that met their rigorous standard for long-term performance. They looked for companies that had outperformed the stock market by a factor of 15 starting from 1926. Then they went about the task of identifying what these companies had in common. Now Collins turns his attention to companies that have made the transition from "good to great." This time the findings are backed by five years of research and data analysis. Starting with every company that ever appeared in the Fortune 500, Collins identifies 11 companies that had 15-year cumulative stock returns at or below the general stock market when, after a transition point, they then demonstrated cumulative returns of at least three times the market over the next 15 years. Collins then looked for similarities among the companies. What he found would both surprise and fascinate anyone involved in management. David Rouse
Copyright © American Library Association. All rights reserved
Most helpful customer reviews
562 of 631 people found the following review helpful.
Rare Pathways to Exceptionally Increased Prosperity
By Donald Mitchell
This study was stimulated by Mr. Bill Meehan's (head of McKinsey in San Francisco) observation that Built to Last wasn't very helpful to companies, because the firms studied had always been great. Most companies have been good, and never great. What should these firms do?
Jim Collins and his team have done an enormous amount of interesting work to determine whether a good company can be come a great company, and how. The answer to the former question is "yes," assuming that the 11 of 1435 Fortune 500 companies did not make it there by accident. The answer to the latter is less clear. The study group identified a number of characteristics that their 11 companies had in common, which were much less frequently present in comparison companies. However, the study inexplicably fails to look at these same characteristics to see how often they succeed in the general population of companies. If these characteristics work 100 percent of the time, you really have something. If they work 5 percent of the time, then not too much is proven.
How were the 11 study companies selected? The criteria take pages to explain in an appendix. Let me simplify by saying that their stock price growth had to be in a range from somewhat lower than to not much higher than the market averages for 15 years. Then, in the next 15 years the stocks had to soar versus the market averages and comparison companies while remaining independent. That's hard to do. The selected companies are Abbott Laboratories, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreen, and Wells Fargo.
As to the "how," attention was focused on what happened before and during the transition from average performance to high performance. Interviews, quantitative analyses, and business press reports were studied. Clearly, there's a tendency to see things a little bit with 20-20 hindsight in such a situation. Since this study started in 1996, it was dealing with facts that were already quite old while they were being examined. Bias is likely.
The key conclusions as to "how" included the following:
(1) a series of CEOs (promoted from within) who combined "personal humility and professional will" focused on making a great company;
(2) an initial focus on eliminating weak people, adding top performing ones, and establishing a culture of top talent putting out extraordinary effort;
(3) then shifting attention to staring at and thinking unceasingly about the hardest facts about the company's situation;
(4) using facts to develop a simple concept that is iteratively reconsidered to focus action on improving performance;
(5) establishing and maintaining a corporate culture of discipline built around commitments, with freedom about how to meet those promises;
(6) using technology to accelerate progress when it fits the company's concept of what it wants to become; and
(7) the company builds momentum from consistent efforts behind its concept that are reinforced by success.
Then, a connection is made to how these 7 conditions can provide the foundation for establishing a Built to Last type of company that can outperform the competition over many decades.
One potential criticism of the study is that its conclusions could be dated. Former Stanford professor Collins argues that he has uncovered basic facts about human organizations that will be unchanging.
I compared the conclusions in this book with my own studies of top performing CEOs and companies in the 1988-2001 time period. I noticed two major differences that suggest a shift in "best practice" standards. First, those who outperform now have developed processes that create major improvements in their operating business models every 2-5 years. Second, senior management development is focused around improving a culture for defining and implementing such improvements. I suspect that item (4) above was an embryonic predecessor to these new dimensions, which occur much more frequently now than in this study.
Next, I compared the list of 7 items to what I had observed in companies. The biggest point that hit me is how few CEOs have been interested in creating long-term outperformance that lasts past their own tenure in an industry. You also have to be a CEO for a long time with that focus before you have a chance to make a lasting impact. Founders have a special advantage here. Perpetuating outperformance may help fill a psychological need for immortality that fits with founders especially well.
Finally, I thought about what I knew about the companies studied from personal contacts during the study years. My sense is that their stories are far more complex than is captured here. So, I think the data have probably been "scrunched" to fit together in some cases. In particular, I wonder whether these companies will greatly outperform in the next 15 years. In many cases, they expanded to meet an unfilled need that is now largely fulfilled. Can they develop a new concept for (4) that will carry them forward as successfully in the future? My guess is that most will not. If that turns out to be the case, we must conclude that the items on this list may be necessary . . . but may not be sufficient to go permanently from good to great. Time will tell.
Before closing, let me observe that if the research team had also looked at the rate by which their principles succeeded among companies that employed them, this would have been one of the very finest research studies on best practices that I have seen. A book like this will provoke much discussion and thought for years to come. Perhaps that information can be included in a future edition or printing. Then, we will have something magnificent to consider!
Do you want to be the best permanently? Why? Or, why not? Mr. Collins points out that it probably takes no more effort, but a lot more discipline and focus.
350 of 392 people found the following review helpful.
Neither Good Nor Great
By H. James Madigan
This book by Jim Collins is one of the most successful books to be found in the "Business" section of your local megabookstore, and given how it purports to tell you how to take a merely good company and make it great, it's not difficult to see why that might be so. Collins and his crack team of researchers say they swam through stacks of business literature in search of info on how to pull this feat off, and came up with a list of great companies that illustrate some concepts central to the puzzle. They also present for each great company what they call a "comparison company," which is kind of that company with a goatee and a much less impressive earnings record. The balance of the book is spent expanding on pithy catch phrases that describe the great companies, like "First Who, Then What" or "Be a Hedgehog" or "Grasp the Flywheel, not the Doom Loop." No, no, I'm totally serious.
I've got several problems with this book, the biggest of which stem from fundamentally viewpoints on how to do research. Collin's brand of research is not my kind. It's not systematic, it's not replicable, it's not generalizable, it's not systematic, it's not free of bias, it's not model driven, and it's not collaborative. It's not, in short, scientific in any way. That's not to say that other methods of inquiry are without merit --the Harvard Business Review makes pretty darn good use of case studies, for example-- but way too often Collins's great truths seemed like square pegs crammed into round holes, because a round hole is what he wants. For example, there's no reported search for information that disconfirms his hypotheses. Are there other companies that don't make use of a Culture of Discipline (Chapter 6, natch) but yet are still great according to Collins's definition? Are there great companies that fail to do some of the things he says should make them great? The way that the book focuses strictly on pairs of great/comparison companies smacks of confirmatory information bias, which is a kink in the human mind that drives us to seek out and pay attention to information that confirms our pre-existing suppositions and ignore information that fails to support them.
Relatedly, a lot of the book's themes and platitudes strike me as owing their popularity to the same factors that make the horoscope or certain personality tests like the Myers-Briggs Type Indicator so popular: they're so general and loosely defined that almost anyone can look at that and not only say that wow, that make sense, and I've always felt the same way! This guy and me? We're geniuses! The chapter about "getting the right people on the bus" that extols the virtue of hiring really super people is perhaps the most obvious example. Really, did anyone read this part and think "Oh, man. I've been hiring half retarded chimps. THAT'S my problem! I should hire GOOD people!" Probably not, and given that Collins doesn't go into any detail about HOW to do this or any of his other good to great pro tips, I'm not really sure where the value is supposed to be.
It also irked me that Good to Great seems to try and exist in a vacuum, failing to relate its findings to any other body of research except Collins's other book, Built to Last. The most egregious example of this is early on in Chapter 2 where Collins talks about his concept of "Level 5 Leadership," which characterizes those very special folks who perch atop a supposed leadership hierarchy. The author actually goes into some detail describing Level 5 leaders, but toward the end of the chapter he just shrugs his figurative shoulders and says "But we don't know how people get to be better leaders. Some people just are." Wait, what? People in fields like Industrial-Organizational Psychology and Organizational Development have been studying, scientifically, what great leaders do and how to do it for decades. We know TONS about how to become a better leader. There are entire industries built around it. You would think that somebody on the Good to Great research team may have done a cursory Google search on this.
So while Good to Great does have some interesting thoughts and a handful of amusing or even fascinating stories to tell about the companies it profiles (I liked, for example, learning about why Walgreens opens so many shops in the same area, even to the point of having stores across the street from each other in some cities), ultimately it strikes me as vague generalities and little to no practical information about how to actually DO anything to make your company great.
74 of 80 people found the following review helpful.
Unwavering resolve to do what must be done
By A Customer
Unwavering resolve to do what must be done! Ah -- a characteristic of the Level 5 (Good to Great) leader, described in this well researched book that shows the reader what it takes to take a good company to greatness. Personal humility fortified with professional will gives Good to Great leaders the edge on their ego-driven counterparts. Collins makes many marvellous points, the first being that the RIGHT people are your most important asset. By rising above unrealistic optimism, confronting brutal facts and asking questions that lead to the greatest insights (optimal thinking), the leader moves his company to greatness. Good to Great leaders focus on the few things that have the greatest impact (optimal thinking). Collins won me when he said "One of the primary ways to de-motivate people is to ignore the brutal facts of reality." Good to Great leaders create a culture where the truth is heard, and where negative thinking is not degraded or scorned (optimal thinking). This book is a must read!
http://astore.amazon.com/amazon-book-books-20/detail/0060794410
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