From Good to Great – The Secrets of the Most Successful Companies in the World

Good to Great – Jim Collins

‘No matter how dramatic the end result the Good to Great transformations never happened in one fell swoop….Rather the process resembled relentlessly pushing pushing a giant flywheel in one direction, turn upon turn, building momentum until a point of breakthrough, and beyond.’

 The full title of this book is Good to Great – Why some companies make the leap…and others don’t. Jim Collins was fascinated as to why some companies moved from average performance to great performance and why others never moved passed the average stage.  He decided to spend five years researching a group of eleven companies to see what had driven them from good to great. This is not an old book, published in 2001 it came at a time known as the ’new economy.’ At this time many business spectators in the USA thought it was more important to be in the right place at the right time as opposed to working persistently over a long period to achieve greatness.   However Collins research showed that the companies he researched had achieved greatness by identifying their unique strengths  and working tirelessly to make the most of them.8827619102_da32df905e_z

Leadership

It was not Collins original intention to write a book that focused heavily on the subject of leadership, however as his research went on it became unavoidable.  His research showed that leadership was a vital component in companies moving from Good to Great. This alone was not a surprise, however what was surprising was the type of leader who commonly achieved this success.  It was not the confident ‘gun for hire’ type leaders that are commonly brought in to ‘rescue’ ailing companies.  Instead the leaders of the Good to Great companies seemed to be quieter leaders with a combination of humility and ambition.

The Good to Great leaders didn’t seems interested to pushing their own prowess or reputation on others, they were more the quietly determined type who were 110% committed to achieving long term success for the company.  These leaders were more likely to highlight the performance of those in the team around them than take the glory themselves.  Collins could see that these leaders were extremely determined and worked very hard, yet he was surprised that after all their effort how many still claimed to have been very lucky.

Collins was very impressed with these leaders.  They led teams that showed real passion for the products and services they were providing.  Another benefit of the more humble leadership style was that these leaders achieved success through those around them and invested heavily in their teams.  Therefore if they did leave the company it was a lot easier for these companies to continue in the same, successful vain as opposed to another company relying heavily on a ‘stand alone’ leader who built everything around themselves.

The Right People on the Bus

Jim Collins found that there was an interesting difference in the way the great companies had developed compared to what he perceived as the conventional wisdom of the day.  It would be normal practice for a company to get the concept just right and then use it to attract the right people to drive that the business forward.  However the Good to Great companies seemed to following a different strategy.  They saw the people as the most important factor and started off by getting the right people on the bus and the wrong people off it.  Once they had the right team in place it was a lot easier to use this team to help develop the concept and decide in which direction to drive the business.  The advantage of this strategy was that the team were motivated by the success of the company not just themselves.  They then found it a lot easier to accept and work effectively with changes in direction and strategy in the future. Interestingly, the Good to Great companies didn’t pay any more than the good companies for these people, the motivation came more from the bigger goal of being part of the success of the business.

Based on Fact

One of the advantages of having leaders that were well grounded was that the Good to Great companies were far more likely to make decisions based on fact rather than any one person whim or dream. Collins found that overly charismatic leaders could actually get in the way of the company’s success.  The staff were so keen to win the adoration of these type of leaders that they cared more about making the leader happy than actually focusing on the facts and making the correct business decisions.  Collins quotes Winston Churchill in the book; ‘I had no need for cheering dreams. Facts are better than dreams.’

The Three Circle Model

Collins had a three circle model for testing the greatness of a company. The first circle was awareness of what the company could be the best in the world at. The second circle tested whether what the company had chosen to focus on was highly profitable. The third circle represented passion.  Collins believed that if you could combine the three; ie find something you could be best in the world at that makes high levels of profit and that you are passionate about as a company then real greatness could be achieved.

Ten things you can learn from Good to Great:

  1. Greatness is achieved by teams not individuals
  2. It is better to base decisions purely on the facts above all else
  3. Great leaders focus on the success of the company or organisation, not their own greatness.
  4. Having a team that relies on one superstar is not sustainable.
  5. You don’t have to be charismatic to be a great leader.
  6. To build for future success start by getting the right people on your bus.
  7. All decisions should be made by assessing the facts of the situation.
  8. Engage in consistant self assessment
  9. Are you passionate about what you do?  Doesn it make profit and can you be world famous at it?
  10. Invest in cutting edge technology when it ties in with your vision.

 

Summary:

While Collins researched companies to write this book he says the lessons learnt don’t just apply to the commercial world.  The principles of this book can be applied any organisation and also to every individual person in their own lives.  The message to anyone is that results come before charisma.