Good To Great by James Collins
The chapter ‘Good is the enemy of great’ commences with an explication of the criteria set forth for evaluating the ‘great’ companies, noting that curiosity was the motivation for the research. With collection of time-series data on performance over the years, the author identified good-to-great entities such as General Electric and Walgreens that had made tremendous changes from nothing to greatness. Collins indicates that although success is said to emanate from compensations, technology, acquisitions and other related factors, conscious choice and discipline may be the most paramount to the company’s greatness.
‘Level 5 Leadership’ in the second chapter indicates a unique leadership concept noted in most of the companies that had made the transition to greatness. Level 5 is at the top of a hierarchy developed within the book that begins from just competent leaders to strategic decision making executives. The Level 5 leaders have traits such as humility, will and intense determination. Contrary to popular opinion, the ego and compensation are not driving factors for such leaders and they are the kind that take responsibility for unpleasing performance and give credit when things are on the right path.
The ‘First Who, Then What’ chapter indicates the selection of good talents within Level 5 Leadership, which should precede the initiation of an overarching strategy. An analogy of a bus driver is provided on developing a winning team by getting the right people within the bus, eliminating the wrong and then deciding on the destination. The focus should be on the people, their character, dedication and intelligence which should guide the hiring process for good employees as opposed to just analyzing credentials and skills.
‘Confronting the brutal facts’ indicates an endeavor by the entities to make the leap to greatness led by unfailing constant belief to success. Collins believes that with diligence and the right facts, the correct path will unfold. He identifies a four-fold criterion that would help entities develop a culture of telling the truth. The criterion entails leading with questions but not answers, engaging in dialogue without coercion, making autopsies devoid of blame and establishing red flag mechanism to ensure information is not ignored.
‘The hedgehog concept’ is essentially a metaphor that can be interpreted to imply that simplicity may lead to greatness. Its predators employ old tactics while the small animal only rolls up in a ball-like shape for defense, and it is the same tactic it uses always lest it tries other tactics like running and it would be killed. Collins asserts that the hedgehog concept is that single thing that the company can do better than others which is identified by understanding what the entity can do best, the ability to it as well as the driving passion.
‘A culture of discipline’ indicates an organizational culture where people embrace discipline at their own right. This removes the focus from managing people to systems, which eliminates the essence of hierarchy or bureaucratic tendencies within organizations. A disciplined culture does not also require excessive controls because there is inner determination leading to fanatical devotion to the entity’s aims. Collins indicates that disciplined workers develop a single-minded intensity, which coupled with personal empowerment may lead to achievement of greatness.
The ‘Technology Accelerators’ chapter cautions against the over-reliance of technology, as the panacea to identifying all organizational problems. Many of the executives and companies in the great category did not identify technology as a driving force, although pioneering the technology would enhance the transition to greatness as well as adoption of relevant technology. In perspective, great companies adopt technology that conforms to their hedgehog idea by selecting only the type that helps them meet their objectives. The ideal approach by such companies to new technologies is Pause-Think-Crawl-Walk-Run.
Collins postulates in ‘the flywheel and the doom loop’ that the flywheel is pushed to turn over, but over time gets the momentum and transforms to a very powerful force. The chapter therefore asserts that the transition to greatness is a process, taking years of hard work and persistence on the hedgehog concept. Although the revolution may seem dramatic by outsiders, it is an organic developmental process as opposed to the doom loop that only leads to failure through lack of focus to the hedgehog idea and poor strategy.
The final chapter is linked to the author’s previous book ‘Built to Last’, which presents ideologies on factors that determine the long-time survival of the entity. This entails the focus of higher goals other than just profit making, which requires a credible set of value from the companies. Amidst many conclusions to the book, Collins notes that the book is not a follow up of the previous, but a channel through which the right foundation can be established in order to achieve greatness, which can hence be built to last.