Good To Great: Why Some Companies Make The Leap...and Other's Don't

Jim Collins new book is titled Good To Great. If you haven't read it yet, buy, beg, or borrow it. It's that important.

Collins calls Good To Great a "prequel" to his hugely successful Built To Last. I call it the most important Business Leadership book I have read in a long time. 1997's Built To Last was a great book. It set a target for all of us. However, it left out critical information, because those companies were already great. What about those of us struggling to move our companies from Good To Great as opposed to those trying to hold on to greatness? The missing piece is clearly identified in Collins' Good To Great.

Collins and his team identified 11 companies that followed a pattern of "fifteen-year cumulative stock returns at or below the general stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years." Public companies were selected because of the availability of comparable data.Fifteen-year segments were selected to weed out the one-hit wonders and luck breaks. While these selection criteria exclude "new economy" companies, Collins contends that there is nothing new about the new economy, citing earlier technology innovations of electricity, the telephone, and the transistor.

Having identified the companies that made the leap from Good To Great, Collins and his team set out to examine the transition point. What characteristics did the Good To Great companies have that their industry counterparts did not? What didn't the Good To Great companies have?

Collins maps out three stages, each with two key concepts. These six concepts are the heart of Good To Great and he devotes a chapter to explaining each of them.

• Level 5 Leadership
• First Who... Then What
• Confront the Brutal Facts
• The Hedgehog Concept
• A Culture of Discipline
• Technology Accelerators

Collins characterizes the Level 5 leader as "a paradoxical blend of personal humility and professional will." The Level 5 leader is not the "corporate savior" or "turnaround expert". Most of the CEOs of the Good To Great companies as they made the transition were company insiders. They were more concerned about what they could "build, create and contribute" than what they could "get - fame, fortune, adulation, power, whatever". No Ken Lay of Enron or Al Dunlap of Scott Paper, the larger-than-life CEO, led a Good To Great company.

This kind of executive is "concerned more with their own reputation for personal greatness" than they are with "setting the company up for success in the next generation".

In this book, Jim Collins also challenges the notion that "people are your most important asset" and postulates instead that "the right people are." I don't know that I yet completely agree with his philosophy that it's more important to get the right people on the bus and then see where it goes than it is to figure out where to go and get the right people on the bus who can get you there. However, he makes his point clearly and you can decide if you agree with him.

This nearly 300-page book is packed with leading edge thinking, clear examples, and data to support the conclusions. It is a challenge to all business leaders to exhibit the discipline required to move their companies from Good To Great.