Customer Reviews

Good To Great: Why Some Companies Make the Leap...And Others Don't

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At 210 pages, "Good To Great: Why Some Companies Make The Leap and Others Don't" reads very quickly (The last section of "Good To Great" consists of many notes and appendices). The core of the book emphasizes what Collins refers to as a 'hedgehog' strategy that is necessary to achieve greatness. I'm not sure why a 'hedgehog' is necessary to explain such a simple strategy. But, I guess we can live with the rodent analogy.

Collins says great companies are like hedgehogs in that they stick to what they know and can do well. Collins says when a fox attacks a hedgehog the hedgehog curls into a prickly ball and the attacking fox must leave it alone. Then, the fox runs around and tries another point of attack and never learns. The hedgehogs only needs to do one thing that works well and consistently.

In short, after much research and writing, Collins finds the key to business success is functioning within the intersection of three circles.

The first circle represents an endeavor at which your company has the potential to be the best in the world. The second circle represents what your company can feel passionate about. The third circle represents a measure of profitability that can drive your economic success. You must choose to do something that's profitable and know how to focus upon that profitability.

To find the circles, Collins makes the excellent point that you must begin with the right people. Collins emphasizes that the people must come before you decide exactly how your company will achieve success.

We learn that in great companies there is often heated debate about what's best for the company. The culture of great companies is open in the sense that the truth will be heard. That's very different from debating for the sake of protecting private turf and self-aggrandizement.

Collins' research says the CEO's at the time companies become great aren't egotistical business leaders. Rather, they tend to be reserved people who channel their ego into building their companies. Collins is a little vague on exactly how you get other employees and key players to channel their egos into building the company. The hope is that, if you select the right people, they'll do what's best for the company rather than for themselves. I'm not so sure that's always true.

Finding something you can be passionate about is the other key. And, all employees must be passionate about the endeavor. Because most employees won't get jazzed about making the CEO and shareholders wealthy, a company should have a purpose beyond just making money. Collins says a company should have 'core values.'

Collins says it doesn't matter what these 'core values' are, just that they exist. He says Philip Morris is happy to provide the strongest brand recognition of 'sinful' products. Maybe, they're rebelling against political correctness, or health, or whatever. If it works for them, it's cool. Fannie Mae, on the other hand, prides itself on providing mortgages to new, less-affluent homeowners and helping people buy homes. That sounds good, and is probably true, but it reads a little bit like a publicity statement.

Incidentally, the Great companies chosen were: Abbot Labs, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo.

While many of Collins' observations have insight and are well worth reading, I can't help but feel that certain points are forced to conform to Collins' ideas. For example, Nucor realized it could be the world's best steel manufacturer. Why? Had Nucor failed, I could imagine reading that Nucor tried to run around like a fox. Possibly, this is only the result of needing to fit all Collins' research into a short book, and Nucor had a truly viable reason to believe it could be the world's best steel maker.

As another example, Collins tells us Walgreens spent $100 million to create its own satellite system in an attempt to enhance profit per customer visit. Collins admires this because they used technology to stay focused upon their key ratio of profitability. Of course, the Internet came along and offered easier communication between the stores, so that you can pick up your prescription at any store, even when away on vacation. But, should a drugstore rodent really be messing with satellites? Is that within his inner rodent?

My feeling is that if this had all bombed and Walgreens had not been bailed out by the Internet, Collins would be using Walgreens as a good example of going too far outside what your company can be the best at! I see a hedgehog on the information freeway following the shinny bright lines.

In short:

--Get the right people on the bus. Get the wrong people off the bus. Be sure everyone is in a seat that suits them. Collins says that the right people are your best asset. Let them choose their own song. 99 Bottles Of Beer On The Wall, or whatever...

--Let the right people discover something your company can be great at. (This won't always work for ultra-small companies-- by the time you have the right people and are paying them, you'll be out of money before anyone figures out what you should be doing!)

--Choose something that the company can be passionate about. Passion isn't dictated, it's discovered.

--Find your best single measure of profitability. Collins asks: If you could maximize profitability per x, what x would have the biggest long-term impact on your company's success? Then, stay focused on improving that one key ratio.

--Stop making 'to do' lists. Start making "stop doing" lists. Stop doing anything that doesn't fit within your inner rodent.

--Know that you will succeed in the end. Have faith in your company's destiny. But, realize it might take many years that really suck to get there. Collins says you must confront the brutal facts of your company's reality.

Peter Hupalo, Author of "Thinking Like An Entrepreneur"

Imagine 1,024 people participating in a coin-flipping exercise.

Those who flip heads "win," those who flip tails are eliminated.

Now let's assume that the coin-flipping adheres to the norm--that is, a flip yields heads half the time, and tails half the time. And let's do the flip-and-elimination exercise 10 times.

At the end, out of 1024 competitors, you should have one winner who's flipped 10 consecutive heads.

Is the winner great at flipping heads? No. Is the winner lucky? No. Is the winner inevitable? YES.

And that's the problem with Jim Collins' dunderheaded exercise--he's wowed by the winning coin flipper's success. He can't wait to interview the flipping champion, pore over the data to recreate the sheer drama/moments of truth surrounding each individual flip, find the subtle nuances beneath the flipper's consistent performance, and draw universally applicable lessons from the coin flipper's astounding success. I mean, how can anyone argue with TEN CONSECUTIVE flips of heads, right?

Um, actually everyone should argue with it, Jimmy.

Just like Tom Peters did fifteen years before with In Search of Excellence, Collins sanctifies his business winners, completely overlooking the fact that 1) plenty of business losers followed IDENTICAL strategies and still lost and 2) if you have any criteria for excellence that generates more than zero companies pulled from a universe of more than zero companies, then one or more companies MUST, by definition, make the cut, which leads us to 3) so what?--without a statistically rigorous analysis, there's a fairly serious possibility that a number of companies are making the cut RANDOMLY. Collins really stumbles on this last one--without statistical proof, not only can't he distinguish between Good and Great, he can't even make the call between Good and Kind of Random, Dude.

Like Collins' masquerade, Peters' book was a big hit, but followers of Peters soon ran into the Law of George Bernard Shaw--Time Wounds All Heels; most of the companies Peters championed in his book quickly floundered. Some of Collins' sainted companies are already floundering as well...

Books like Good to Great prey on the fact that you napped through statistics--if you'd been caffeined up during those dull lectures, you'd have remembered the fallacy of composition (the coin flipper's exercise), the distinction between random outcomes and relevant ones, and the enormous difference between what's causal and what's coincidental.

Look, there's nothing new in business: there are only a few basic strategies, and only a few macro and microeconomic truths. Ever notice how fads like supply side economics, the Japanization of America, the endless bull market, the end of history, The New Economy and the Macarena all seemed to collapse under the weight of basic market concepts you already knew?

So SNAP OUT OF IT, gulp down that double espresso, go back to your old and boring (but still accurate and useful) Michael Porter, Adam Smith, Karl Marx, Benjamim Graham, and Burton Malkiel, and stop chasing misallocated or downright blockheaded metaphors from Who Moved My Cheese, The Art of War and poor, misunderstood Charles Darwin, and for God's sake, please take a pass on this Three Card Monte of a book.

Desperately thrashing around for insights, Jim Collins commits every sin of disinformation--misapplying metaphors, falling prey to fallacies of composition, insisting correlations are causalities, and, in general, becoming so entranced with hindsights that he fails to notice the utter uselessness of his ideas. His lessons have no predictive value or management currency whatsoever.

This is deep, deep quackery, a Who Moved My Cheese for people who spend all day in meetings trading consultantspeak, thinking they're working ("adding value"). For all its self-congratulation, Good to Great never moves beyond that old marketing joke--if it worked, then in retrospect, it was a good idea.

In a few years, Jim Collins will be every bit the joke that Tom Peters is today. Run, don't walk from this book.

In Built to last, The Economist writes about one of the phoney gurus that the US is good at producing: Jim Collins. We agree when they write: 'This is not to say that Mr. Collins's insights are worthless; merely that they are less robust than he suggests. Most business books would profit from a bit more rigor. Mr. Collins's might profit from a bit more willingness to admit that, like all management gurus, he is dealing in clever hunches rather than built-to-last scientific discoveries.' It remembers me of a study published in the Academy of Management Perspectives in 2008. The authors wrote:'With sales of more than 4.5 million copies, Good to Great by Jim Collins provides an inspiring message about how a few major companies became great. His simple but powerful framework for creating a strategy any organization can use to go from goodness to greatness is certainly compelling. However, was Collins truly able to identify 11 great companies? Or was the list of great companies he generated merely the result of applying an arbitrary screening filter to the list of Fortune 500 companies?' To test the durability of his greatness filter, they conducted a financial analysis on each of the 11 companies over subsequent periods. They found that only one of the 11 companies continues to exhibit superior stock market performance according to Collins' measure, and that none do so when measured according to a metric based on modern portfolio theory. They conclude that Collins did not find 11 great companies as defined by the set of parameters he claimed are associated with greatness, or, at least, that greatness is not sustainable. Collins Studies are of the same humbug that the one published in 1982 by two others phoneys gurus, Peters and Waterman, in their book In Search of Excellence. Nothing in the book has supported any serious financial review. The worst of it all is that colleagues in business schools use this kind of books in their teaching.

Jim Collins and his team sure seems to know what they're talking about. This was informative, objective and a great read - useful data presented in an engaging and very readable way. While it seems to be about issues that make or break companies, there is a lot of relevant material for your own personal growth, in both professional and personal arenas. While common sense might lead you to some of these conclusions on your own, it's nice to have them all in one place - especially the ones you didn't think of!

Again Collins writes a must read book. Again, (though this book doesn't deal with churches or religion) the applications to the church are obvious and powerful. As a pastor, concerned about the need for the church to regain its focus on reaching people with the life transforming love of Jesus, I found this book sets forth a strategy that would help any organization (in my interest, a church) be more healthy, focused and productive.
Collins findings regarding Level 5 Leadership is a needed antidote to the "Corporate" style many pastors have sought to emulate. Getting the right people on the bus in the right roles, doing the hard work of assessing the brutal facts, taking the time to find the hedgehog concept, and then developing a disciplined culture are all correctives to much of what needs to be changed in an ineffective church.
Lest the reader of this review think I am suggesting the church take a page from the corporate world, let me assure you that Collins has written about foundational qualities that you might conclude reflect eternal values. Maybe that's why they became great companies!

This book is an easy read. I read it in one weekend. Interesting perspecive for anyone in business and a great followup to Build to Last.Another book I highly recommend for anyone in business is Customers come Second, Employees comes first" a philosophy that I have alwys implemented in my business.

The "Good to Great" author, Jim Collin introduces a standard for leadership called Level 5, the plow horse of the company. A level 5 leader is a blend of personal humility and intense professional will power. The drive for self-interest is superceded by a intense ambition putting the institution first and foremost. The equation is very simple: Humility + Will = Level 5. A level 5 leader is inspiring because they demonstrate a unwavering resolve to get things done. The company understandings what the company does best and the level 5 leader drives for the company for results. A level 5 leader has a strong understand of how the company makes money and the products or services they provide. A level 5 leader builds a corporate culture, facilitating phenomial commitment and production levels from his company. The level 5 leaders establishs the standards to build an enduring company. Failure is not blaming others, for the failure, but apportion of responsiblity for poor results. Likewise, success is attributed to others.

Good to Great emphasizes getting the right people onboard. Three keys are emphasized about finding the right people: First, don't hire until the right person is discovered. Second, when a people change is need act immediately. And third, put your best people on the biggest opportunities, not the biggest problems.

The Good to Great philosophy suggests flexiblity by confronting and adapting to the brutal facts. Brutal facts save Good to Great companies and move them significantly, in front position. Brutal facts change the focus of the company and provide relief from making fatal business decisions. Two philosophical forces drive the leader 5 leader to confront brutal facts: rentless discipline and enterpreneural spirit. Discipline provides the freedom to change and effectively implement the change in the company culture. The enterpreneural spirit provides solutions to the problems. Efficiency and Creativity drives produces new ways of doing business which don't go outside, of what the company does best, and what the company is truely passionate about.

Good to Great company demonstrates a singular of purpose of intent, with an desire to build the company into a great company. The core ability of Good to Great companies is their focus on "What they are deeply passionate about", "What they can be the best in the world at", and "What drives their economic engine." This is hugh area are of analysis to be understood. Most companies never gain this understanding. However, once done the companies goals and strategies focus around the companies core foundation of understanding.

Good to Great companies are not driven by technology but use technology to accelerate what they do best. Technology is used to accelerate, what the company does best. Understanding how technology integrates with the companies scope objectives provides rapid acceleration in scale, breadth, and velocity in which the company advances they culture. Good to Great companies understand that company culture is the reason for success. The Good to Great company is not looking for a breakaway technology to save them. The consistly win and no one event makes they great; only that they eventual are recognized as great. The culture drives efficiency and productivity. Technology is used to fit their goals and strategies.

Good to Great companies may appear average but have significant break aways in momentum.
After years of doing what they do best, planning, and achievement; a good to great company will experience a break away phenomenia. The momentum sustained from consistent achievement of goals and objectives creates the rocket thrust to move them up and into orbit. Before long they are moving in a stellar velocity and their competitors remain on the ground.

The book has a hugh appendix explaining how Jim Collin and his research team derived the conclusions in the book and how they selected the good to great companies list. I really enjoyed the book. I'm looking forward to reading "Built to Last"

Jim Collins brilliantly displays his extensive research throughout his eye opening book, Good to Great: Why Some Companies Make the Leap...and Others Don't. I really don't read much for leisure, but this book kept me interested until the last page. It showed how to take a good company and make it great, by giving comprehensive guides for managing people and mostly importantly managing yourself in a work environment. It used modern day examples of companys such as Walgreens and Eckerd, companies I have actually shopped at. Collins and his team of researchers conducted detailed research among great companies and gave comparisions as to why each company succeded and why their comparision company did not. If you plan on running your own business at some point in your life, this is a must read. If you work at a company and hope to climb the latter to managament, this is a must read.
This book takes a look at all aspects of a company and how each employee must realize their role and fulfill it. He attributes that one of the most important aspects in becoming a "great" company is possessing a Level 5 Leader. The term Level 5 refers to the highest point of a hierachial scale created by Collins, in which the leader embrasses the first 4 levels of the scale to become a caring and professional leader. He goes on to give strategies for guiding the company in the right direction, keeping the right employees, getting rid of the wrong ones, and putting the right ones into the right positions. Some of the main aspects he contributes to having a good company is Level 5 Leadership, finding the right employees and utilizing them in the right positions, being able to "confront the brutal facts", understanding them and then being able to deal with them, embracing the Hedgehog Concept, providing a culture of discipline within the company, and lastely dealing with technology accelerators.

Read this book.

Its worth your time.

Collins, in the tradition of the case study, names names and finds unique properties in the management of a number of Fortune 500 companies over a 30 year period. From a unique set of criteria he pursues, with no preconceived notions, what it takes to sustain profitability in a large public corporation which had previously been only mediocre. His findings are clear, well thought out and often surprising. In the realm of business books, this one is especially refreshing for a number of reasons.

This is a hardheaded skeptic's book. What makes it so special is that it does not assign magic to anyone, neither to himself as a writer or to any of the officers interviewed. Collins exposes his own learning process and allows the reader to understand the nuance in the emphasis of each of his concepts as he spells out the skeptical questions that his research team posed and the deliberation they went through. Collins doesn't come off as a 'guru' who has found some magic that only he and a handful of CEOs can see so much as a disciplined and curious leader of a research team struggling with difficult questions. So not only do you understand what he means as he moves from 'chaos to concept', you also see arguments against his initial reasoning. And since he is dedicated only those conclusions supported by facts rather than fitting random companies into some grand theory we see exactly what he sees and why. There is none of breathless exuberance that characterizes so much of business writing.

What is most refreshing and reassuring about this book's studies is that it puts us back in a sensible framework for understanding long term success without making a fetish of 'leadership' or 'innovation' or 'excellence' or other buzzwords. This is the kind of book that demonstrates the sort of objectivity possible in business - it doesn't obfuscate or take the position that there is something mysterious out there. Rather he makes the complex comprehensible and when the answers are simple, they are presented simply. He constantly checks and compares the difference between unsustainable and sustainable profitability. All of Collins' concepts lend themselves to the sorts of metrics upon which rugged methodologies can be built. This is more than a book of management theory; it is a learning tool, which explains itself. I cannot remember the last book where the appendices were as interesting (and sometimes more interesting) than the main text.

It might be corny to say so, but I think his findings are self-rewarding. Working from the premises put forth, it makes sense for smaller companies and organizations some of which might not even be businesses at all. 'Good to Great' offers solid lessons among which are that it doesn't take more energy to behave smartly but it does take nerve. Collins dared to work smartly and has created a great book.