Good to Great

Book Review: Good to Great: Why Some Companies Make the Leap . . . and Others Don't

By Jim Collins,
2001, HarperCollins Books.

This is simply one of the best books I've read on creating a successful group over time with solid principles of leadership, focussed efforts on strategy, and understanding why some companies fail and others thrive with seemingly the same ingredients.

Here are a few pearls I hope I never forget:

1) First Who, Then What. Good-to-Great leaders get the right people on the bus first, get the right people in the right seats, then figured out where to drive it. The right people are your most important asset.

2) Confront the Brutal Facts, (Yet never lose faith) The Stockdale paradox is one of Vietnam POW warhero who survived prison camp by daily confronting the most brutal parts of his reality and yet knowing someday he would survive the ordeal and teach about it at Stanford, which he does. Getting "red button" feedback helps leaders overcome the liability of charisma to find out what is truly going on in the business early. The Brutal Facts help companies come to grip on what they cannot achieve, and then refocussing on what they can become the best at.

3) The Hedgehog Concept (Simplicity within the Three Circles) Being the best in the world at a particular function is a key secret great companies discover to transcend the curse of competence, even if that competence is their core business and has sustained them for decades. The Hedgehog concept must satisfy 3 overlapping requirements a- you actually can become the best in the world at it b- you have intrinsic passion for that activity c- the economic engine of your company is centered around that activity

4) Culture of Discipline When there exists a culture of disciplined thought, you don't need heirarchy. When you combine the culture of discipline with the ethic of entrepeneurship, you get the magical alchemy of great performance.

5) Technology Accelerators The role of technology is simply an extension of ones understanding of the hedgehog concept. A technology revolution alone does not sustain a company or make one thrive successfully. By carefully selecting technology that does not distract from the hedgehog mission, technology can be successfully integrated.

6) The Flywheel and the Doom Loop Wrenching restructurings are the beginning of the end and the antithesis of the quiet, firm, steady plodding of the Level V leader, the hedgehod mission, and implementing the quiet knowledge gained from confronting the Brutal Facts of the present. The Flywheel starts moving one focussed effort is set toward a huge goal visualized after truly understanding ones capabilities, ones potential,as a company, and what the Inner Circle or council of leaders reveals through the process of discovery together. The turns occur slowly, effortfully, and gain more and more momentum until breakthrough finally occurs. But there is no lucky break, it is a matter of time and effort with the core principles in place.

More Pearls: the Best 11 companies who went from Good to Great over 15 years also had:
1) Level V Leadership

Level 5 Executive
a paradoxical blend of personal humility and professional will aims to put the corporation or group success above personal gains
Level 4 Effective Leader
catalyzes commitment to a clear and compelling vision, higher standards
Level 3
Competent Manager effective and efficient pursuit of predetermined objectives
Level 2
Contributing Team Member works for team objectives, works effectively with others Level 1
Highly Capable Individual makes productive contributions through talent, skills, work habits Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company.

It's not that they have no ego or self-interest, they are actually incredibly ambitious, but first and foremost for the institution. Humility + Will = Level 5. The great irony is that personal ambition that often drives people to positions of power stands at odds with the humility required for level 5 leadership. Boards often feel a need to hire a bigger than life egocentric director, and you see why Level 5 leaders rarely appear at the top of institutions.

Level 5 leaders are fanatically driven for sustained results, but more plowhorse than showhorse. Colvard Mockler of Gillette had a great life and balance despite the transformation undertaken to make Gillette a great company because he put the right people in the right places to take care of the challenges faced together, even in times of crisis he had balance and family time.

That is the power of Who First, then What, and having the right people on the bus. This book was transformational for me and has helped understand the major Flywheels in my life: my family and childrens lives, my marriage, and my company. Understanding this helps me avoid wasting efforts and getting distracted, making life great.

Thank you Jim Collins and the hundreds of others who assisted in the study that empirically delivered these findings for Good to Great.