Good to Great is good, but not…what’s the word I’m looking for?
March 30, 2009 0 Comments
Steve Tomasiewicz contributor
Good to Great is a seminal book by Jim Collins that provides an empirical approach that attempts to determine the often elusive practices of successful companies. It is a review and analysis of timeless business principles and stresses that the lessons found within its pages are true regardless of a “new economy” or “the old economy.” Ironically, one of the “great” companies that comprised his case study was Fannie Mae; a company that recently played a rather negative role in this economy.
Good to Great provides seven principles, each corresponding to a component necessary to achieving the level of greatness as defined by Collins. According to Collins, once, and only once, each cog has been correctly assembled into the machine, will a company be able to make that quantum leap into greatness. Admirably, Collins does a good (but not great) job of providing numerical statistics for his conclusions. This especially holds true when drawing direct comparisons to similar companies that could not quite make the transition. The book does a wonderful job of explaining these seven principles and providing allegories. In addition, there is no shortage of some choice buzzwords and phrases that would impress any executive that’s not really paying attention (“Level 5 leadership” and “The Flywheel” and “Doom Loop”). However trite the catchphrases may come across, they actually are accompanied with in depth, specific descriptions and supporting evidence. Furthermore, the book builds on itself well by using concepts from previous chapters to bolster its arguments (i.e. the Doom Loop makes little sense without understanding the usefulness of technology accelerators and the Three Circles found within The Hedgehog Concept).
The only real drawback of the book lies within its company comparisons. While the method of comparison is logical and the statistics used are meaningful, the actual comparisons are somewhat impractical. Persistently, Collins contrasts poor to great companies. A specific example used illustrates how A&P (a good company) completely ignores new truths about where their industry is going and makes awful decisions. It should be patently obvious to anyone that a good company that makes poor decisions will not end up great. A more insightful and useful approach would be to showcase good companies that actually make good decisions but do not have the ability or foresight to catapult themselves into greatness.
Good to Great provides a great starting off point for shaking down a company to its core and rebuilding itself as a stronger entity. Other than a few incredibly disastrous companies (Fannie Mae, and Circuit City), Good to Great is definitely worth its weight and provides tangible concepts using insightful discussion. Perhaps it could be augmented by a sequel that shows how great companies can quickly fall from their pedestal if not careful: “Good to Great…to Destroying the Global Economy (potentially)”
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