All over the world, good businesses abound. They do what they set out to do fairly well and generally get by. And then there are the great businesses. These ones have repeatedly raised the bar and outdone themselves over and over again. Why do some entrepreneurs become truly great performers while others remain only good? If you have ever wondered what makes the difference between good businesses and great businesses, I guarantee that John Collins’ book, Good to Great, contains the answers to all your questions.
Together with his team, he carried out a study seeking answers to these questions; “Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?” Good to Great is the result of that study.
First, John Collins and his research team picked a yardstick for determining great results. Companies that had made the leap from good to great were those that had generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years. Over five years, twenty-eight companies were analyzed in the study.
I was surprised to learn the difference between companies that had gone from good to great, and those that failed to make that leap. In this book, the author shares the key determinants of greatness as discovered by him and his crew.
In my opinion, Chapter 1, Good is the Enemy of Great is vital to getting the most out of this book. This is because too many people are satisfied with good. Good is, after all, good, is it not? Unfortunately, “good” never really remains good. A wise man once said, “Not doing more than average is what keeps the average down”. Anyone who wants to be great simply must be unsatisfied with good.
After establishing this, the author moves on to the second chapter, Level 5 Leadership. Here he describes in detail the type of leadership required to achieve greatness, and what makes Level 5 Leaders different from others.
Through the rest of the book, John Collins presents his other findings. The Hedgehog Concept explains that transcending the curse of competence is a pre-requisite for good-to-great. Leaders ought not to be satisfied with competence; competence must become excellence. Here the author is careful to point out that this does not imply setting unrealistic goals, illustrating the difference between bravado and understanding with an inspiring story from his own family.
He goes further to elucidate how great results follow when a culture of discipline is with an ethic of entrepreneurship. He also describes how good-to-great companies have different views about the role of technology in their organizations. Finally, he gives an important warning in The Flywheel and the Doom Loop; companies who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap from good to great.
The book’s messages are simple; it does not take superpowers to attain great management, and executives who practice great management can build great institutions.
John Collins is a competent teacher. Not that this is surprising considering the fact that he was formerly a faculty member at Stanford University Graduate School of Business and currently serves as a teacher to leaders in both corporate and social sectors. His conclusions are simple, yet that does not stop him from putting great effort into explaining how he arrived at them. Good to Great is a must-read not just for every entrepreneur but for all young professionals who desire to reach the highest heights in their chosen career.
