Average Rating: 
Rating:  - Achieving and continuing spectacular business success
In 1994, Jim Collins and Jerry Porras wrote one of the most successful management books of the last decade: Built to Last. Collins and Porras had studied 18 visionairy companies, many of which had existed for 60 years or more. These companies had a strong focus on values and people and great ability to to learn and exchange knowledge. They gave less priority to maximalizing shareholder value but paradoxically outperformed the market enormously. In a conversation with Jim Collins, McKinsey director Bill Meehan said he, too, loved the book, but added: "Unfortunately, it's useless". He explained why. The companies featured in Built to Last had always been great companies. But because most companies are just good (not great) they are not interested in a book which shows how to stay great (Built to Last) but in a book that shows how to become great. The matter inspired Collins. He built a research team of 15 people and started a 5 year study.The team tried to identify companies that had jumped from good to great and had managed to continue their great growth for at least 15 years. They found 11 of these (Abbott, Circuit City, Fannie Mae, Gilette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, Wells Fargo). These good-to-great companies (GTG's) outperformed the market by a factor 6.9 in the 15 year period of the analysis! (General Electric outperformed the market 'only' by a factor 2.8 between 1985 and 2000). The study focused on the question: what did the GTG's have in common that distinguished them from comparable companies in comparable circumstances? The GTG's were compared with two sets of other companies: 1) the direct-comparisons: companies within the same sector and in comparable circumstances, 2) the unsustained comparisons: companies that had had a breakthrough but that had not been able to continue their success. Collins intended to, from the ground up, build a theory which could explain the successful transformation of the GTG's. As it turned out, all of the GTG's had a period of build up, preparation (often lasting many years) before the breakthrough moment. Three phases could be identified: PHASE 1: DISCIPLINED PEOPLE
1. LEVEL 5 LEADERSHIP: contrary to the expectation, leaders of the GTG's turned out to be quiet, self effacing and even shy. At the same time, however, they were very determined. Mostly, they were leaders that came from within the company and that have remained unknown to the greater public. 2. FIRST WHO...THEN WHAT: also contrary to what you might expect was that GTG's first got the right people on the bus and the wrong people off and only then focused on strategic direction and vision. PHASE 2: DISCIPLINED THOUGHT
3. CONFRONT THE BRUTAL FACTS (..BUT NEVER LOSE HOPE). Characteristic was a combination of realism and hope.
4. THE HEDGEHOG CONCEPT (SIMPLICITY IN THREE CIRCLES): just like a hedgehog, the GTG's seemed to have a very simple but effective success formula: all of the activities of the company had to lie within the intersection of the following three circles: 1) what can we become best in the world at? 2) what are we passionate about? 3) what can we make money with? PHASE 3: DISCIPLINED ACTION
5. CULTURE OF DISCIPLINE: the GTG's turned out to have a culture of discipline that made hierarchy and bureaucracy largely superfluous.
6. TECHNOLOGY ACCELERATORS: none of the GTG's had technology as a cause of the success, but technology did play the role of accelerator of the success. Collins rather convincingly demonstrates the validity of this model. All of the GTG's showed these practices throughout the 15 year period, while none of the direct comparisons did. The unsustained comparisons showed some of these practises often right until the moment of their decline. Looking at the share price development of the GTG's, you might expect that there has been a clear marking point of the transformation because their share price stays rather flat at first (for many years) and then just suddenly takes off and keeps on going up. An important finding of the team was, however, that there were nó special change programs, and nó breakthrough decisions or products. On the contrary, the process evolved very fluently. To eplain, Collins uses the metaphor of the flying wheel. When you start to turn this wheel it goes heavily and moves slowly. But by continuously keeping on turning the wheel, it starts to build momentum and then, just suddenly, a point is reached at which the wheel turns at great speed without you having to turn it any harder than at first. Is this the practice of many companies? Not at all! The reality of many companies is nót consistently following a chosen path but rather swinging from one hype to another. I think this research evokes one principal issue. That the concept 'great' is operationalized in a financial way is easily understood from a practical standpoint. This criterion is clear and rather easily obtained and makes it easy to compare the companies scientifically. But is 'great' the best word to describe spectacular financial success? Does their financial success necessarily make GTG's 'great'? Wouldn't that be like saying that Bill Gates en Silvio Berlusconi are great people while implying Martin Luther King and Mother Theresa are not? But, having said that, demonstrating how companies achieve and continue spectacular financial success, in itself, is extremely interesting and valuable. This is a terrific book that, I think, has the quality to equal or perhaps even surpass the success of Built to Last. Unlike most management books (which contain creative but highly speculative ideas), the message of this book is based on well-designed research and mindful interpretation of results that is explained and justified terrifically. Despite this thoroughness, the book remains a pleasant read. A pity that the book does not offer some more practical suggestions to help readers get started. I think that would have made it even better.
Rating: - A fine work - makes a case for rethinking organizing workers
If you are involved in any human endeavor where people work together to accomplish goals, this best-seller is worth your time. Recall, Jim Collins co-authored a previous best-seller, Built to Last, on why some businesses lose and why some win big. This new 5-year study examines how good companies become great companies, but the findings easily apply to schools, churches, political groups, etc. The book examines old "success" clichés and reveals fresh insights on what constitutes resultful leadership. It explodes many popular management cult myths and gets to the human elements that build a successful organization. Some rather uncommon CEO characteristics of new-look leaders: They are self-effacing, reserved, even shy and possess a great deal of genuine humility; no big egos here. They don't try to manage change or motivate people. They are driven to produce sustained results. They are ready at any time to confront the brutal-truth facts of their organization with steadfast faith they will prevail The companies picked for the spotlight have an interesting people culture. If you paid them a visit, you would be struck by the evidence of self-discipline, and the absence of an in-your-face bureaucracy. Employees are picked because they are already self-disciplined; they were hired because those who hired them know that if you hire people who are already self-disciplined, they don't need to be "managed." Guided and taught, maybe, but not tightly managed. In such a company, there is plenty of arguing and
debate in pursuit of the best answers, but after the disagreement, everybody gets behind the decision. Winning companies create a climate where truth is heard. The people love what they do partly because they love the people they work with. They know you can't manufacture passion or motivate people to feel passionate; you can only discover what ignites passion. Rule by bureaucracy goes away if you have the right people. Other leadership tidbits:
-A "stop doing the wrong things" list, is more important than a "to do" list.
-The author found no links between executive compensation and the process
of going from good to great. Compensation was used to get and keep the right people.
-The good-to-great companies were able to identify every item of cost, income
and investment with the single person responsible for that item.
-Ten of the eleven CEOs came from within their own organization.
-When in doubt about a potential new hire, don't hire. Keep looking. The findings and conclusions in this fine work indicate clearly the need to rethink how we go about organizing people to insure the success of any endeavor. Many old "leadership" clichés don't apply.
Rating: - Good to Great. . . is Great
There are many good companies, firms which generally sell satisfactory products or services at reasonable prices. However, the definition of a "great" company is a bit more elusive. How can a good company become a great company? The author, along with a team of researchers, examined nearly 1,500 companies, determining which have made great strides in their performance over the years. The book is written in an engaging style which clearly outlines the key components of what makes a business a great one. Those components emphasize discipline, integrity, commitment, persistence, clarity of vision etc. - fundamental principles of success to be sure, but principles which must be mastered in order to achieve long term prosperity and sustainable worth. To journey from good to great requires a deft combination of discipline, entrepreneurship and holistic vision. The author's emphasis on humanistic balance is somewhat unique in comparison to standard business fare, but it reflects a maturity and consciousness of basic personhood so essential to one's search for meaning. The "how to do it" may be more elusive, but Mr. Collins certainly presents a great deal of practical insight in this regard. This is neither the first, nor the last book to address the notion of excellence . . . but it is one of the best ones.
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