My Review 5/5

This isn’t a reading of the book, actually more of a light lecture style. Closely adheres to the text though. The book was originally published in 2001, and the author has added some notes in recording the book in 2005. Not all companies are born “Great”. This book is the study of the principles that unite the good to great companies. A quick caveat. Two of the companies studied were Circuit City and Fannie Mae. It is important to note that becoming great can lead to arrogance. Just as sports dynasties come and go, we can still learn from studying the heyday years of disciplined who, disciplined thought, and disciplined action.

“Good is the enemy of great”. It is very easy to stay ‘good’ and not achieve greatness. Great companies have a “Level 5 Leader” at the helm. Someone who exemplifies all the great qualities of leadership and is humble, stoic, resolved in his decision making. This book is organized into three sections, Disciplined Who, Disciplined Thought, Disciplined Action. The right people will manage themselves. The right people will listen to the right ideas. The right people can enact the right actions.

“Who, then What”. Get the right people on the bus, the wrong people off the bus, and the right people in the right spots. THEN determine the strategy, tactical, operational, etcetera. It’s much easier to get a group of the right people to go a different direction than to take the wrong people in a different direction. Thinking of “Him and Haw” from Who Moved My Cheese?. Level 5 leaders also have a ‘window and mirror’ approach to success and failure. They look in the mirror when failure occurs, and point out the window to external factors for successes. A deep talent pool is critical for the enduring success of a company.

“Leave a lasting legacy.” This is the truest measure of success for a leader. In fact Covey and others identify it as a core desire of any great leader. Level 4 leaders are great, but their organizations falter without them at the helm. In articles they are far more likely to use “I” statements, instead of “we”. Think “genius with a hundred helpers”. This genius has no desire to develop talent, and in fact will openly squash it. Setting up any successful for failure. In fact this chapter reminded me most of my time at Flower City Printing under my boss. He was an expert in his fiefdom but refused to hire any talent that could exceed his knowledge.

10/11 good to great companies had internal candidates attain CEO position. On average, great CEOs take home slightly less cash compensation than good CEOs. However compensation is not the key motivator for Level 5 leaders. Like so many other works, focus on the outcome of the organization, on accomplishments and success, and the money will find you. From the books on military strategy, you must never underestimate a man’s resolve. Level 5 leaders have resolve that transcends compensation incentives. See Steve Jobs $1 annual salary.

Great leaders also are unafraid to take the hard actions, confronting the brutal facts. As one CEO who survived cancer put it. “If the cancer is in the arm, have the courage to amputate the arm”. Walgreens invented the malt shake, and had a long history of food service, but the CEO saw this as a distraction from it’s core drug-store business. He set a course that removed this core part of the business. Be the ‘plow horse’ not the ‘show horse’. A big focus on WHO means when evaluating people be rigorous not ruthless. Also, try moving the people around the organization several times before settling on termination.

Put the best and brightest on the best opportunities, not the worst problems. Great companies solidify around a core “hedgehog” concept. Their decision making supports this hedgehog. Confront the brutal facts. Having the right people will bring the brutal facts to bear. Being optimistic is not the same as being realistic (stockdale paradox). Have the courage and unyielding determination that you will prevail, but don’t forget to face the facts. Reminds me of the phrase “don’t forget to fly the plane”. An airliner went down because all the experts (pilots) focused on one gauge/error in the cockpit. Nobody flew the plane.

Technology is an accelerant, but not the cause of great changes. In the study of good to great companies 80% of executives did NOT list technology at all as a factor in their transformation. First who, then what. The focus on building a great company is a study of the three circles of your hedgehog concept (what you are passionate about, what you can be best in the world at, what drives your economic engine). None of those require technology. Granted you cannot be a laggard, but parity with competitors is often all that is necessary. Systems of innovation should be invested in what drives the economic engine and propels you to greatness. For example, a steel plant should have a sufficient system of record (accounting), but pioneer the most efficient way to produce steel per ton.

Finding the best ‘denominator’ to measure a company’s hedgehog concept is crucial. This isn’t a wall street measure (profit per earnings, or profit per shares), but something like “profit per customer visit” or “profit per thousand pounds of finished product”. From buildup to breakthrough, coverage of a company focuses on the transformation effect. Think when the chicken emerges from the egg. What a stupendous event we think, but to the chicken it’s just another step. This also expands on the fly-wheel concept. All changes will turn the flywheel, the key is to consistently make the push in the same direction to build momentum.

Most importantly. Crawl, Walk, Run. You cannot buy or acquire into greatness. Two mediocre companies cannot combine to greatness. You do not need an outside charismatic leader to make all the changes. The single most important message of this book is first who, then what. With the right people on the bus formulating success becomes an act of passion that will not be stopped.

Date Read

2016/03/22

Date Added

2016/05/31

Goodreads book information

Good to Great: Why Some Companies Make the Leap…And Others Don’t by Jim Collins

https://www.goodreads.com/book/show/1016081

Bookshelves: business

Author’s Note

Initial md Generated using https://github.com/jsr6720/goodreads-csv-to-md

Jim Collins, Good to Great: Why Some Companies Make the Leap…And Others Don’t, HarperAudio 2005 (Audio CD)1

Significant Revisions

tags: 2016, book, review, Collins, business

  • Apr 22nd, 2024 Converted to jekyll markdown format and copied to personal site
  • Mar 22nd, 2016 Originally published on goodreads

EOF/Footnotes

  1. ISBN: =”0060794410” ↩