GOOD TO GREAT
Why Some Companies Make the Leap…and Others Don't
Harper Business, 2001
EDUCATIONAL OBJECTIVES The reader will be able to:
• Apply principles to corporations to help them build corporate structures in the mold of others which have gone from mediocre to great
• Review the 28 companies that made the leap to great results and sustained those results for at least fifteen years
• Contrast the good-to-great companies with a set of comparison companies
• Describe the meanings of Level 5 Leaders, Transcending the Curse of Competence, A Culture of Discipline, Technology Accelerators, and the Flywheel and the Doom Leap
• Describe the relationship of a culture of discipline and a spirit of entrepeneurship in a successful transition
• Describe how good-to-great companies think about technology
• Describe if radical change programs and wrenching restructurings will help or hinder making the leap
Jim Collins, Ph.D., is author or coauthor of the best-sellers Built to Last and Great by Choice. A student of great companies, he teaches leaders throughout the corporate and social sectors. A former faculty member at the Stanford University Graduate School of Business, where he received the Distinguished Teaching Award, he now works from his management research laboratory in Boulder, Colorado.
In his international blockbuster Built to Last, which rode the business bestseller lists for five years, Jim Collins and his coauthor, Jerry Porras, revealed the success secrets of companies that were outstanding at their founding and then sustained greatness. In his new book, Collins has chosen to research an entirely new line of inquiry. Is transformation really possible? Are there mediocre companies that have turned themselves around and achieved sustained excellence after a decade of more of ordinary performance? And what is it about these companies that can explain their success?
For nearly five years, Collins and his research team undertook a massive study of every company that has made the Fortune 500 since the advent of that listing in 1965—over 1400 companies in all. The result of that research was astounding—only 11 companies had successfully turned a mediocre enterprise into a true long term champion. The surprising secrets of how they did it—and how any company can—are brilliantly unlocked in this visionary new work.
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.