GOOD TO GREAT COMPANIES SUMMARY JIM COLLINS
Jim Collins gives us a conceptual view of an extensive study that began with 1435 companies and was downsized to 11 companies based on strict criteria in order to find what factors move a company from good to great. In this book Jim gives us a concept/framework of transformation of a company from good to great as given in the image below.
Included in this framework are three stages:
- Disciplined People
- Disciplined Thought
- Disciplined Action
And within these three stages are two concepts we will touch on this model a little bit more later. There are seven concepts total that move companies from good to great and each concept has its own chapter. Let’s dig in these concepts.
LEVEL 5 LEADERSHIP
Level 5 leaders as compared to level 4 effective leaders or level 3 competent managers is someone who builds enduring greatness through a blend of personal humility and professional will. Level 5 leaders are driven for a need to create results that are sustainable and will do whatever it takes to make the company great they are very ambitious for the sake of the company not for themselves Jim Collins says that every good to great company had a level 5 leadership during their transition years.
FIRST WHO THEN WHAT
Good to great leaders get the right people on the bus and get the wrong people off then figure out where to drive it, good to great leader ask two questions before making blood decisions before vision strategy or organizational structure the what they figure out who. Collins uncovered three disciplines for making peoples decisions.
- When in doubt don’t hire keep looking.
- When you know you need to make a people change act.
- Put your best people on your biggest opportunities not your biggest problems.
CONFRONT THE BRUTAL FACTS
All good to great companies became great by confronting the brutal facts of there current reality out of this the right decisions became apparent. Good to great leaders create a culture where the people have the opportunity to be heard for the truth to be heard. The stockdale paradox it says to retain absolute faith that you can and prevail in the end regardless of the difficulties and at the same time confront the most brutal facts of your current reality.
THE HEDGEHOG CONCEPT
The key is to understand that what your organization can be best in the world at and also what it cannot be the best at and not it wants to be the best at. If you cannot be the best in the world at your core business then your core business cannot form the basis of your hedgehog concept search for a single denominator that has a single greatest impact to get the insight into your economic engine.
A CULTURE OF DISCIPLINE
Great results that last depend upon building a culture of self-discipline people who have discipline thinking and take disciplined action, action consistent with the three circles in the hedgehog concept the most important discipline for sustainable results is making sure to stick to the hedgehog concept and be willing to turn away opportunities to fall outside the three circles, this will lead to more opportunities for growth.
TECHNOLOGY ACCELERATORS
Good to great companies think differently about technology and technological change than mediocre ones good to great organizations avoid technology fads but they become pioneers in applying technology that is carefully selected good to great companies use technology as an accelerator not a creator of it.
THE FLYWHEEL AND THE DOOM LOOP
Sustainable transformations from good to great follow a pattern you can predict from build up to break through it takes effort to get it moving but the it’s a point of breakthrough companies that follow a different pattern the doom loop. Companies that follow a different pattern the doom loop tried to skip build up and jump to break through and failed to maintain a consistent direction.
