panguitch's Full Review: James C. Collins - Good to Great: Why Some Compani...
Principles
Contrary to the vilification of the businessman in contemporary culture, and despite the many examples of real villainy in the business world, my perception has long been that men and women of business, including if not especially executives, are no more nor less good than the general population. In fact, business, for most of its practitioners, is a highly principled occupation. The accounting profession, for one, may only be matched by law and medicine in its concern for ethics.
Certainly, businesspeople are no angels, no matter what some venture capitalists like to call themselves. But in general I think they have a healthy sense of right and wrong, a strong idea of justice, and a powerful faith in the consequences of breaking the rules. What's more, in many bestselling business books there seems to be an impulse to craft a gospel, to codify proper behavior and prophesy the blessings that follow naturally from righteous management.
There is some of this in Jim Collins's Good to Great, a certain reassurance that good guys finish first. It figures mostly in a disdain for celebrity CEOs and their white horses, and an exalting of discipline. But instead of the inspirational preaching and cheese that that so many bestselling business books offer, the dominant sense of Good to Great is one of careful rigor, a more scientific pursuit of eternal truth.
Evidence
Appropriately, then, Collins and his research team did not work backwards in search of support for a premise. Instead they defined a research problem, explored the data for five years, and arrived at some elegant conclusions.
In a way Good to Great is a prequel to Collins's similarly rigorous Built to Last. The core question addressed is how a good company can become great. This requires a definition for both good and great. Collins &co searched for companies that generated unspectacular returns for at least fifteen years, followed by a transition point after which they generated returns three times the market for at least fifteen years. Of the 1,435 companies that appeared in the Fortune 500 from 1962-1995 only 11 met this and the team's other criteria.
The mundanity of these eleven companies is immediately remarkable. There are no GEs, no Coca-Colas, no Intels or Wal-Marts. Instead there's a drug store, a consumer paper products company, and a steel maker. To draw useful insights, a set of comparison companies was selected; companies that could have made the jump from good to great but didn't. Circuit City did, Silo didn't. Kroger did, A&P didn't. Nucor did, Bethlehem Steel didn't. Wells Fargo did, Bank of America didn't.
The details of this selection process and the other research notes and endnotes fill 68 pages, 23% of this 300-page book. It's an impressive effort, and the end product justifies it.
Concepts
This wouldn't be a bestselling business book if it didn't have a graphic that visually summarized its concepts. You know the type, something that can easily be displayed in front of an audience of executives who are paying you handsome consulting fees. The iconography in Good to Great consists of a circle in the background, a horizontal list of concepts, and a striking arrow that demonstrates even performance, followed by a sharp upturn. It's both mnemonic and inspiring. What else could you ask for?
If I can take my tongue out of my cheek for a moment of honesty, the concepts Collins presents are striking. In their simplicity, in the challenge they present for the reader, and in the ring of truth they give when your brain hits on them.
• Disciplined People: Forget the men and women who first come to mind when considering examples of leaders who have transformed companies. These high-profile CEOs are not the kind of material that can take a company from good to great. Instead of ego, what's required is "a paradoxical blend of personal humility and professional will." Good-to-great leaders know that the first order of business is not propagandizing their vision, like Moses descending Sinai, but getting the right people on the bus and the wrong people off.
• Disciplined Thought: To move from good to great a company must confront the darkness of its plight with total honesty while retaining hope. Greatness can only come when your core business is centered on three things (the Hedgehog Concept): understanding what your profit per x denominator is, doing what you're passionate about, and focusing on what you can be the best in the world at. Kimberly-Clark, for example, realized it couldn't be the best at paper manufacturing, but that it could be the best at paper-based consumer products. So it sold its paper mills.
• Disciplined Action: Rather than tyranny or bureaucracy, a good to great company enjoys a culture of discipline. In such a culture, technology, when applied directly to the Hedgehog Concept, becomes an accelerant instead of a trap. Collins's final point is that radical new programs and jarring changes are anathema to good-to-great. Instead of silver bullets, consistent, steady decisions made with the good-to-great concepts firmly in place will lead to breakthrough and beyond.
Execution
Good to Great is well laid-out and very readable, but never dives into the banality of some bestselling business books. The catchphrases are minimalist, the jargon nonexistent, and the cheese is absent. This is a very intelligent book, written with clarity.
It's also very convincing, not least because it finds that discipline, not glamour, is what matters most in business. Collins's rallying cry for the "triumph of understanding over bravado" is heartening in a world where too many boards of directors believe they can buy a better bottom line by bringing in big-name CEOs who amount to little more than flashy mercenaries.
Neither academic nor pulpy, Good to Great is the best business book I've read. Discipline is not an easy creed, but Collins has made me a believer.
The textbook, Good to Great : Why Some Companies Make the Leap and Others Don't, by James C. Collins, available in Hardback. Published by: HarperCol...More at Textbooks.com
The author of Built to Last uses his research on the Fortune 500 to create a blueprint for turning good companies into spectacular ones. 100,000 first...More at Staples
Management - General Business & Economics - The findings of the Good to Great study will surprise many readers and shed light on virtually every area ...More at Barnes and Noble
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