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Good to Great

by Jim Collins

Good to GreatWhat does it take for a mediocre company to become a star performer? That’s the question that author Jim Collins investigated with his team. A “good to great” company was defined as one with a history of stock performance at or below market average for 15 years followed by returns greater than three times the market average for the next 15 years. Good to great companies were compared with control companies from the same industries that didn’t become great.

Collins found that there was a leader combining personal humility with professional will at the helm of every good to great company during the transition years. However, leadership alone is not enough; Collins presents several other factors that make good to great companies different.

Our favorite concept from the book is “First Who Then What.” Collins stresses the importance of getting the right people “on the bus” before you start moving. His reasoning: if people get on board because of where the bus is going, they will be resistant to changing directions if needed. However, if they get on the bus because of who else is already on board, they will be more likely to help move the company in innovative, new directions.

Additionally, good to great companies:

  • Confront the Brutal Facts – they don’t hide from the truth but maintain a faith that they will prevail in the end
  • Develop a Hedgehog Concept – they understand what they can be best at and have the courage to abandon things they are already good (but not best) at
  • Maintain a Culture of Discipline – disciplined people have little need for hierarchy, disciplined thinking requires little bureaucracy, and disciplined actions have little need for controls
  • Use Technology Smartly – technology is used as a means to accelerate performance
  • Accelerate the Flywheel – slow, steady progress gains momentum with each turn, until it becomes an unstoppable catalyst for change

What do you think? Please leave a comment.

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