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What I’m Reading: Good to Great

As many of you know, I am working on a PhD in Leadership Studies at Dallas Baptist University.  Because of this, I have gotten the opportunity to read quite a few excellent books in the area of leadership and organizational management.  I thought I would share some of the best ones periodically with those of you who read our blog.

One book that I highly recommend is Jim Collins’ Good to Great.  Collins is really a master at presenting clear-cut, practical advice while doing so in a compelling/interesting manner.  And, from an academic standpoint, the fact that he puts years of research into formulating his core arguments helps validate his ideas on a deeper level (though many academics claim that he does not go far enough in his research methodology).

In Good to Great, Collins seeks to find key characteristics that help distinguish why some companies go from being average (“good”) to leaders in their industry (“great”) while other competitors simply do not make that same leap.

Basically, what Collins does in this book is look at companies who went from being merely mediocre in terms of their stock returns to having stock returns that were three times greater than the general stock market for a period of 15 years.  He then contrasts those companies to competitor companies who did not make the same leap from “good to great” to see what the successful companies did differently.

The book is full of great insights, but here are a few of Collins’ key points:

1) “First Who…Then What.”  In this chapter, Collins focuses on the idea that having the right people in your organization is one of the most essential components of success.  A company may be mildly successful with only mediocre people, but to truly make the leap from good to great, a company must get high-impact, highly-motivated people “on the bus” (to use Collins’ phrase).  Likewise, it is equally important to put people in the right “seat” on the “bus”–i.e. to make sure that you have people in positions that allow them to use their best talents.

2) “The Hedgehog Concept.”  In this chapter, Collins’ shares another characteristic of the successful companies in his study–that of focusing solely on the areas where they could truly be the best in the world.  Collins’ idea is simple–get rid of everything that is extraneous and focus on what you can truly be “great” at in terms of being a market leader.

3) “The Flywheel and the Doom Loop.”  In this article, Collins’ focuses on the fact that real change simply does not occur overnight.  As he notes:

“Those who launch revolutions, dramatic change programs, and wrenching restructurings will almost certainly fail to make the leap from good-to-great.  No matter how dramatic the end result, the good-to-great transformations never happened in one fell swoop. There was no single defining action, no grand program…Rather, the process resembled relentlessly pushing a giant heavy flywheel in one direction, turn upon turn, building momentum until a point of breakthrough…” (Collins p. 14)

Overall, I highly recommend this book.  While some scholars point out that his methodology is lacking (in that he only forms hypotheses and does not then follow them up with quantitative experiments or surveys to determine the accuracy of those hypotheses), his book provides a great resource for any practitioner.  Collins is a master at helping leaders hear things they already know in new ways, and that seems to be the key attribute of this book.  Like a batting coach who helps a baseball player refine his swing by sharing stories, experiences, and truths in an easily-digestible manner, Collins is able to share with leaders certain core truths that will help them move from being merely mediocre to being truly great.

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