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 ...
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:
Level 5 Leaders: The research team was shocked to discover the type of leadership required to achieve greatness. The Hedgehog Concept (Simplicity within the Three Circles): To go from good to great requires transcending the curse of competence. A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results. Technology Accelerators: Good-to-great companies think differently about the role of technology. The Flywheel and the Doom Loop: Those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap.
Some of the key concepts discerned in the study, comments Jim Collins, "fly in the face of our modern business culture and will, quite frankly, upset some people.
Perhaps, but who can afford to ignore these findings?
You can immediately see this book is "serious" because it is based on a big amount of data collected thanks to a deep research on different companies. The concept it contains are useful and crystal-clear, starting from the famous fox vs hedgehogYou can immediately see this book is "serious" because it is based on a big amount of data collected thanks to a deep research on different companies. The concept it contains are useful and crystal-clear, starting from the famous fox vs hedgehog theory and the related "3 circles"....Continua Nascondi
The following review is based on having read 100+ books in this genre.Good to Great is solid and is based on researching why companies make the step from the norm to the exceptional.There are terrific examples of companies pinpointing both the "how"The following review is based on having read 100+ books in this genre.
Good to Great is solid and is based on researching why companies make the step from the norm to the exceptional.
There are terrific examples of companies pinpointing both the "how" and "what" the leadership did to take the businesses to the next level.
I almost never read business books anymore. I got my fill of them years ago when I was a management consultant before I went back and got a Ph.D.Last week, however, I picked up Good to Great by Jim Collins. This book is an absolute phenomenon in theI almost never read business books anymore. I got my fill of them years ago when I was a management consultant before I went back and got a Ph.D.
Last week, however, I picked up Good to Great by Jim Collins. This book is an absolute phenomenon in the publishing world. Since it came out in 2001, it has sold millions of copies. It still sells over 300,000 copies a year. It has been so successful that seven years later the book is still in hardcover. I’ve been hearing about it for years and never looked at it. People are always asking me about it. I figured it was about time I took a look.
The book focuses on eleven companies that were just okay, and then transformed themselves into greatness — where greatness is defined as a sustained period over which the stock dramatically outperformed the market and its competitors. Not only did these companies make the transition from good to great, but they also had the sorts of characteristics which made them “built to last” (which is the title of Collins’s earlier book).
From Yahoo Finance. Ironically, I began reading the book on the very same day that one of the eleven “good to great” companies, Fannie Mae, made the headlines of the business pages. It looks like Fannie Mae is going to need to be bailed out by the federal government. If you had bought Fannie Mae stock around the time Good to Great was published, you would have lost over 80 percent of your initial investment.
Another one of the “good to great” companies is Circuit City. You would have lost your shirt investing in Circuit City as well, which is also down 80 percent or more. Best Buy has cleaned Circuit City’s clock for the last seven or eight years.
Nine of the eleven companies remain more or less intact. Of these, Nucor is the only one that has dramatically outperformed the stock market since the book came out. Abbott Labs and Wells Fargo have done okay. Overall, a portfolio of the “good to great” companies looks like it would have underperformed the S&P 500.
I seem to remember that someone did an analysis of the companies highlighted in Peters and Waterman’s 1980’s classic book In Search of Excellence and found the same thing.
What does this all mean? In one sense, not much.
These business books are mostly backward-looking: what have companies done that has made them successful? The future is always hard to predict, and understanding the past is valuable; on the other hand, the implicit message of these business books is that the principles that these companies use not only have made them good in the past, but position them for continued success.
To the extent that this doesn’t actually turn out to be true, it calls into question the basic premise of these books, doesn’t it?