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Book Review: 'Good to Great' by Jim Collins

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The question of what makes some companies do better than others, and more so how some companies go from good to great. This is the subject of enquiry in Jim Collins’ Good to Great. While Collins’ previous book, the defining Built to Last explored the basis for how some companies endure with sustained long-term performance while others don’t with strong DNAs, Good to Great looks into what good, mediocre and even bad companies need to do to achieve greatness. Some companies do not have a strong DNA, and yet manage to defy the forces of business gravity and turn long-term mediocrity into long-term superiority. Collins reveals what factors and characteristics allow merely good companies to become great. Collins and his team undertake robust research to show how good to great companies outperform the stock market by an average of seven times in fifteen years, and twice that of great companies like Intel, Coca-Cola, Merck and General Electric. Collins and his team study good-to-great companies and match them against those that don’t and conclude with a range of findings. That is, to go from good to great, companies need a special type of leaders, transcend the curse of competence, allow discipline to mix with alchemy, innovation and acceleration, resist radical restructuring that create doom.

Jim Collins’ Good to Great is a book that considers a lot of robust research to make the compelling case for what makes some companies go from good to great. The book is full of indispensable principles that allow leaders and companies to rethink their perspective and set on a path towards a transformative journey. 

Good needs to be perceived as the enemy of great. Jim Collins’ Good to Great is a book that reveals the complacency of good. Collins shows that being merely a good company isn’t enough for sustaining long-term business success. He dismantles the comfort of mediocrity and why companies that settle for good are undermining their potential. The book makes the case for leaders and their companies to be insistent in striving for greatness; that this is a necessary criteria to go from good to great and achieve sustained long-term business success.

Not all leaders are the same, not all leadership styles are the same. By carefully analyzing the many types of business successes, Jim Collins’Good to Great establishes the need for a certain type of leadership called ‘Level 5’ leadership. This is a blend of great professional will combined with humility. When leaders learn to become Level 5 leaders, they earn the capacity to take a good company and turn it into a great company. The book details a list of strategies that educate and inspire leaders to become Level 5 leaders, which is a useful guide to give their companies a path to great impact.

The maxim that people make a company is a fundamental philosophy that underpins companies that go from good to great. While strategy and vision is important, finding the right mix of people to embark and execute those plans make all the difference. Jim Collins’ Good to Great identifies the people-priorities that good companies need to consider, and have the right combination of individuals in respective positions to drive transformational success.

Truth can be hard to swallow. But finding and identifying the right problem and brutal facts that make companies uncomfortable is essential for companies to go from good to great. Jim Collins’ Good to Great reveals how great companies create a culture of truth, fostering an environment where hard problems — not symptoms – are acknowledged and dealt with full attention. While it’s easier to be comfortable in avoiding problems, great companies take the effort to face the uncomfortable and confront the harsh reality without being cynical.

One of the biggest problems in companies is the lack of focus. Companies that go from good to great recognize that focus is not a nice to have, but a necessity. Jim Collins’ Good to Great explores the value of focus with ‘The Hedgehog Concept’ which is a way to find focus by bringing passion, expertise and forces of economics together. He built this concept by drawing on a Greek fable that pits a fox against a hedgehog. The fox is sneaky and cunning, but the hedgehog is slow and plodding. While the fox is ingenious in its attack, the hedgehog manages to roll into a ball with its spikes out. Eventually, the fox tries and gives up its fight in defeat. The hedgehog knows its strength and believes in it and emerges victorious. On similar lines, Collins reveals that great companies are more like hedgehogs; they know what they do better and focus on it, better than competitors. He also points out that if a company cannot be the best in its core business, that core business cannot for me the basis of the ‘Hedgehog Concept’.

In line of the pursuit of focus is discipline. To stay on track with discipline is harder than one can imagine, given the fast-moving nature of the business world. A lot of companies are bogged down by short-termism and the urge for the next best thing, and in doing so, often lose track of focus. Jim Collins’ Good to Great establishes the critical role of discipline in reaching greatness. He finds that great companies have a core set of principles and values that are followed with conviction and relentlessness, so actions, visions and executions are aligned, and greater and more efficient strides of progress are made.

Technology is an important aspect in the world of business and the evolution of consumer needs. However, Jim Collins’ Good to Great makes strategic conclusions based on robust findings that technology is a tool for progress, not a driver of progress on its own. Drawing real life success stories, Collins and team reveal that great companies use technology to boost and accelerate their existing strategies that are well-established and set on core principles.

Jim Collins’ Good to Great introduces the concept of 'flywheel', used as a metaphor of achieving success and sustained momentum. A Flywheel, he defined, is a holistic frame of accumulated effort applied in a consistent direction. Collins suggests that companies can maintain flywheels to meet new demands and technological contexts instead of falling in a loop of doom, which is represented by inconsistent, fleeting decisions and lack of progress. The book offers tactics to build and maintain flywheels so companies can accelerate as necessary while staying true to its core strategy and values.

Jim Collins’ Good to Great is an engaging read that covers a variety of themes and concepts that allows leaders to take their companies from good to great. Some of these include the pursuit of greatness, which is based on the premise that good isn’t enough and that great companies strive for greatness and resist complacency. To go from good to great requires a certain type of leadership style: Level 5 leadership, which combines great professional will and humility to achieve a transformational style of leadership. Putting people first, and before the strategy is useful because having the right team allows for successful executions and navigating challenges on the way. Companies that go from good to great set themselves up to face the brutal facts and harsh realities to take pressing problems head on. This way, real progress is achieved and strategies have a focus of attack. Sticking to core values and executing with disciple powers the speed of success, taking good companies to greatness, and leaving competitors behind. To go from good to great, companies need to think of technology as a tool, not a driver of progress in itself. And to build and maintain flywheels so companies can keep the momentum but not break from core value and vision, rather than falling in the loop of doom where progress is stunted.

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