Good To Great: Why Some Companies Make the Leap…And Others Don’t – Jim Collins

Here are my comments on the book:

Why is it that some companies are just good companies while others are GREAT companies? What is it that these great companies are doing that just good companies are doing? Jim Collins, Stanford Business School graduate and American business consultant, lists several factors such as the hedgehog concept (excelling in known strengths), using technology to accelerate success, and having the right people. When it comes to success, people are always looking for that ONE thing that will take them to the next level. There is no secret formula or ONE thing that will get you there. Becoming great is the collective use of those multiple ONE things. Here are some of the points to the book:


1) “Everybody wants the good life, but not everybody gets the good life” as was opened by entrepreneur Tai Lopez in his TED talk. There’s no doubt that everyone wants to be successful, the question then becomes, “How much do I really want it and what am I willing to give up for it?” The leaders of great companies are the ones who understand this and have a deep rooted drive to build up these companies to great levels. The leaders of great companies derive a strong intrinsic reward from building these companies up and they’re not stopping for anything. David Maxwell, like Darwin Smith and Colman Mockler, exemplified a key trait of Level 5 leaders: ambition first and foremost for the company and concern for its success rather than for one’s own riches and personal renown. Level 5 leaders want to see the company even more successful in the next generation, comfortable with the idea that most people won’t even know that the roots of that success trace back to their efforts. As one Level 5 leader said. “I want to look out from my porch at one of the great companies in the world someday and be able to say, ‘I used to work there'” In contrast, the comparison leaders, concerned more with their own reputation for personal greatness, often failed to set the company up for success in the next generation. After all, what better testament to your own personal greatness than that the place falls apart after you leave.


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2. The leaders of great companies don’t make excuses. Every company has its challenges and barriers but how they deal with them is what makes the difference between good and great. Don’t let things get in your way of stopping you from becoming great. Look at the challenges from a more positive perspective and that’ll help you get through with them. Compare Bethlehem Steel to Nucor. Both companies operated in the steel industry and produced hard-to-differentiate products. Both companies faced the competitive challenge of cheap imported steel. Yet executives at the two companies had completely different views of the same environment. Bethlehem Steel’s CEO summed up the economy’s problem in 1983 by blaming imports: ‘Our first, second, and third problems are imports.’ Ken Iverson and his crew at Nucor considered the same challenge from imports a blessing, a stroke of good fortune (‘Aren’t we lucky; steel is heavy, and they have to ship it all the way across the ocean, giving us a huge advantage!’). Iverson saw the first, second, and third problems facing the American steel industry not to be imports, but management. He even went so far as to speak out publicly against government protection against imports, telling a stunned gathering of fellow steel executives in 1977 that the real problems facing the American steel industry lay in the fact that management had failed to keep pace with innovation. The emphasis on luck turns out to be part of a leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.


3. Make sure that you have the right people in your company. Have people who are just as committed to the growth and development of the company as you are. In the book Start With Why by Simon Sinek, he demonstrates that having a strong purpose to getting something done is a more compelling motivator than the extrinsic rewards derived from completing that task. To get where you want, it can be difficult to do it alone. That’s why having the right group of people who share the same vision is key to success. Don’t have a company or business? Find people who are just as motivated, if not even more, as you are and surround yourself around them more often to get you to that next level of success. One of the immutable laws of management physics is ‘Packard’s Law.’ (So called because we first learned it in a previous research project from David Packard, cofounder of the Hewlett-Packard Company.) It goes like this: No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company. If your growth rate in revenues consistently outpaces your growth rate in people, you simply will not – indeed cannot- build a great company. Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.


4. Bruce Lee has once said, “It’s not the daily increase but daily decrease. Hack away at the unessential.” Instead of trying to become a jack of all trades (and master of none), cut out things that aren’t helping you get to where you want to be. Don’t let the frivolous things hold you back from achieving a higher potential. Double down on what works or what has been working and cut the rest out. According to Pareto’s principle, 80% of your results come from 20% of your effort. Double down on that 20% that yields the 80% to get more out of what you want and cut out the rest of that 80% that yields only 20%. Do you have a ‘to do’ list? Do you also have a ‘stop doing’ list? Most of us lead busy but undisciplined lives. We have ever-expanding ‘to do’ lists, trying to build momentum by doing, doing, doing – and doing more. And it rarely works. Those who built the good-to-great companies, however, made as much use of ‘stop doing’ lists as ‘to do’ lists. They displayed a remarkable discipline to unplug all sorts of extraneous junk. When Darwin Smith became CEO of Kimberly-Clark, he made great use of ‘stop doing’ lists. He saw that playing the annual forecast game with Wall Street focused on people too much on the short term, so he just stopped doing it. ‘On balance, I see no net advantage to our stockholders when we annually forecast future earnings,’ said Smith ‘We will not do it.’


By Ryan Timothy Lee


My rating:
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Check out the book here:
Amazon US
Amazon Canada
Amazon UK


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  1. […] Feeling lost and not exactly sure what sort of business to go into? In the book Good to Great by Jim Collins, he talks about the “hedgehog concept” to help you identify what to go […]


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