Good to Great
Good to Great is the foundation on which many of the most well-known books on leadership are built.
In Good to Great, Jim Collins explores the concepts that separate good companies from great ones. It’s a fascinating research project that produced a variety of important concepts which you may already be familiar with such as:
- Level 5 leadership
- The Hedgehog Concept
- The flywheel
- “Get the right people on the bus”
- A culture of discipline
Collins and his team identified 11 companies such as Walgreens, Gillette, and Kimberly-Clark that stood out as being “great” compared to their competitors, with sustained “greatness” over at least a 15 year period. He defines “greatness” as a documented period of at least 15 years of sustained substantial growth compared to its competitors, in some cases over 10 times the growth of its competitors.
The question they tried to then answer was:
What do the “good to great” companies share in common that distinguishes them from the comparison companies?
They compared each of those 11 companies to a major competitor in their field that exhibited lackluster performance during that same period. Then, they spent 5 years conducting research, interviews, and data analysis to determine what led to the separation between those companies.
None of this is theory!
This is all based on strictly protocoled evidence with empirical deductions derived from data analysis.
The other thing that’s important to recognize is that the analysis shows that these companies succeeded primarily because of choices the company leaders made, not the celebrity status of their CEO or some technological revolution.
What does that mean for the average physician, dentist, nurse, or other health care professional?
Anyone can do this stuff!
As Collins remarks in his first chapter, “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice.”
Good to Great Part 1: Level 5 Leadership
His walk through the research starts with someone he defines as a level 5 leader, which is someone with a unique blend of humility and will that drives them to seek success on behalf of the organization.
Very few leaders ever reach this level, which is one reason why there are so few “great companies.” It all starts with a leader willing to take critical steps to see the company succeed.
Good to Great Part 2: First Who, Then What
He goes on to talk about getting the right people for your organization. I love the analogy he uses!
He describes a company like a bus. In order to get where you’re going, you need to put the right people on the bus, get the wrong people off the bus, and put the right people in the right seats on the bus. Only then do you drive the bus to where you’re going.
Good to Great Part 3: Confront the Brutal Facts
The choice to confront brutal truths about an organization and then act on those facts to effect important changes is one many leaders avoid. This choice provides an inflection point that often leads ultimately to the success or failure of an organization.
“Good to great” companies accept even brutal facts about themselves, swallow their pride, and develop systems to succeed despite the reality of those facts. Far from avoiding the tough truths, they embrace those truths and develop processes to overcome them.
Good to Great Part 4: The Hedgehog Concept
The image below highlights the framework for organizing your business strategy. Collins writes, “A hedgehog simplifies a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything.” Basically, ignore everything that isn’t absolutely essential.
“Good to great” companies have a strategy that lives at the intersection of these three questions:
- What can you be the best in the world at?
- Can you identify what drives your economic engine?
- What are you deeply passionate about?
Good to Great Part 5: A Culture of Discipline
Collins argues that excessive reliance on bureaucracy and organizational structure is unnecessary if you get the “right people on the bus.” If you have the right people and cultivate a culture of discipline, then innovation and productivity are the natural byproducts.
In a culture of discipline, companies don’t ask how they’re doing compared to competitors. Instead, they ask how they’re doing compared to how they said they would do. A disciplined culture sets basic principles and a framework for operating but gives its team members freedom to operate independently within that framework.
Good to Great Part 6: Technology Accelerators
The data show that “good to great” companies leverage technology to accelerate their progress. However, they are neither dependent on nor avoidant of those technologies to help their business succeed.
Technology, for these companies, doesn’t create momentum but it can accelerate momentum. As Collins states, “Mediocrity results first and foremost from management failure, not technological failure.”
Good to Great Part 6: The Flywheel and Doom Loop
None of the “good to great” companies execute these steps once and then call it a success. The great companies in this study put all of these steps into action and then apply them continuously over years or decades.
Proper execution at each step puts you on the “flywheel,” which produces continuous growth over time. Failure at any step can transition you to the “doom loop,” which drives down productivity and leads to mediocrity or total failure.
If you have any stake in the leadership or management of your company, you absolutely need to read this book. If you aspire to leadership or if you currently lead even part of a team, this book will still be highly relevant to you.
This is one of my five favorite non-fiction books I’ve ever read, and I think it needs to be on every current or aspiring leader’s bookshelf. The concepts in this book are critical to understand if you want to accelerate your company’s growth.
If you hope to break out of the pack and build a good company into a truly great company, then you need to read Good to Great.
Buy the book here.
If you like that book, you’ll love these books as well:
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