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

The Challenge
Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the verybeginning.

But what about the company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness?

The Study
For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?

The Standards
Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies, including Coca-Cola, Intel, General Electric, and Merck.

The Comparisons
The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to make the leap from good to great. What was different? Why did one set of companies become truly great performers while the other set remained only good?

Over five years, the team analyzed the histories of all twenty-eight companies in the study. After sifting through mountains of data and thousands of pages of interviews, Collins and his crew discovered the key determinants of greatness -- why some companies make the leap and others don't.

The Findings
The findings of the Good to Great study will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include:

Collins advocates the Hedgehog Concept - a combination of discovering what you can be best in the world at (Optimal Thinking), what you are passionate about, and what drives your economic engine. Collins states that sustained disciplined action is primarily achieved by "fanatical adherence to the Hedgehog Concept and the willingness to shun opportunities that fall outside the three circles." So my question is: How do you identify the best? I recommend Optimal Thinking: How To Be Your Best Self by Dr. Rosalene Glickman as an adjunct to this powerful book to provide the mental resource to identify the best, optimize emotional and financial intelligence and create a corporate culture of optimization. From Good to Greatest to Best!"


Unwavering resolve to do what must be done   May 21, 2004
 67 out of 68 found this review helpful

Unwavering resolve to do what must be done! Ah -- a characteristic of the Level 5 (Good to Great) leader, described in this well researched book that shows the reader what it takes to take a good company to greatness. Personal humility fortified with professional will gives Good to Great leaders the edge on their ego-driven counterparts. Collins makes many marvellous points, the first being that the RIGHT people are your most important asset. By rising above unrealistic optimism, confronting brutal facts and asking questions that lead to the greatest insights (optimal thinking), the leader moves his company to greatness. Good to Great leaders focus on the few things that have the greatest impact (optimal thinking). Collins won me when he said "One of the primary ways to de-motivate people is to ignore the brutal facts of reality." Good to Great leaders create a culture where the truth is heard, and where negative thinking is not degraded or scorned (optimal thinking). This book is a must read!


Good to Great and Optimization   December 19, 2003
 57 out of 58 found this review helpful

This book is a refreshing change from the leadership books which expound various flashy leadership skills as the determinant for corporate greatness. Clearly disciplined execution and focusing on the key profitability ratio produce a shift from mediocrity to greatness. This book is a definite read for the business leader. To move beyond greatness and achieve optimization, read Optimal Thinking: How To Be Your Best Self, then infuse Optimal Thinking into every facet of your corporation.


A book for the ages! Excellent for managers and start-ups   October 24, 2001
 101 out of 108 found this review helpful

Jim Collins, co-author of Built To Last, has done it again! This time he spent 5 years trying to find out what differentiates good companies from great companies. This study can be applied to entrepreneurial ventures and to current corporate America. After reading this book you may see your company from a much different perspective than in the past and it may have you thinking about the effectiveness of senior managers within your company. I believe it is a book that business executives will read and keep handy for reference.

This book is a study of companies that exceed their industry, the overall stock market and produce PHENOMENAL returns over a 15-year period (15 of them are very "normal" years and the next 15 years are full of explosive growth). Some key points you will take away from this book include:

1)Growth in most companies came after years and years of trying to adapt / mold a concept into something the company truly believed in. Once this happened the growth engine got going.
2)Great managers worry more about getting the right people on board and the wrong people off board BEFORE they establish a corporate stategy.
3)Most great CEOs came from within their own ranks and weren't recruited from the outside.
4)Executive compensation didn't appear to be a key driver of corporate performance
5)The respective great companies exceeded the overall stock market in creating shareholder value by at least 3x during their 15 year run measured (some for many more years). While some may say this is not much think about the steel industry and how many are filing for bankruptcy. Nucor Steel still managed to beat the S&P by more than 3x.
6)The great companies in this book blew away their comparable peer group. Wells Fargo vs. Bank of America, Kroger vs. other grocery chains, Walgreens vs. Eckerd, etc.
7)Collins describes a Level 5 leader. After reading this section I was amazed at how many CEOs I recognized as not being Level 5 leaders. This may, in the near future, shake up executive compensation plans, CEO searches and potentially affect corporate governance.
8)Technology accelerated a transformation but was regarded as a tool. It didn't define the company.
9)M&A activity played virtually no role in going from good to great.

That is all I will write about the book. I could write on and on about how good this book is. Read it. It will change the way you think about business. Other very good books on the principles of business and entrepreneurship are Leading at the Speed of Growth by Catlin and Mathews and The 22 Immutable Laws of Marketing by Jack Trout and Al Ries.


Good to great is a fantastic book!   June 1, 2003
 93 out of 100 found this review helpful

If you own a business or are planning on owning one, read this excellent book by Jim Collins and find out what makes great companies great.

Hint: It's not hype, a fancy widget or a charismatic guru.

What is it? Read the book and find out. It's worth the read and you'll thank me later.