Good to Great by Jim Collins

Summary

  1. Collins’ seminal book on the shared characteristics of great companies as well as what sets them apart from the merely good. Collins demonstrates that good companies can become great and how they went about doing so.
Key Takeaways
  1. Seven vital aspects of going from good to great
    1. Level 5 Leadership – great leaders tend to be self-effacing, quiet, reserved, shy and have a blend of personal humility and professional will
    2. First Who, Then What – get the right people on the bus, the wrong people off the bus and the right people in the right seats – then figure out where to drive
    3. Confront the Brutal Facts – must maintain unwavering faith that you can and will prevail in the end and at the same time have the discipline to confront the most brutal facts of your current reality
      1. Lead with questions, not answers
      2. Engage in dialogue and debate, not coercion
      3. Conduct autopsies, without blame
      4. Build “red flag” mechanisms
    4. The Hedgehog Concept – understand what is essential and ignore the rest
      1. What you can be the best in the world at
      2. What drives your economic engine
      3. What you are deeply passionate about
    5. A Culture of Discipline – When you have disciplined people, you don’t need hierarchy, you don’t need bureaucracy and you don’t need excessive controls
    6. Technology Accelerators – technology should never be the primary means of igniting a transformation
    7. The Flywheel and the Doom Loop – going from good to great takes time but once the momentum is achieved it takes off
  2. Good is the enemy of great
  3. Findings:
    1. Larger than life CEOs are negatively correlated with taking a company from good to great
    2. No noticeable pattern between executive compensation and a company going from good to great
    3. Strategy per se did not separate the good from the great
    4. Great companies focused as much on what not to do as what to do
    5. Technology can accelerate a transformation but technology cannot cause a transformation
    6. M&A plays virtually no role in igniting a transformation
    7. Great companies had no “launch event” to motivate people or signify the transformation
    8. Great companies put little effort into motivating people – alignment was already there
    9. Great companies were by and large not in great industries and some were in terrible industries
  4. Making companies great is largely a matter of conscious choice
  5. Three broad stages – disciplined people, disciplined thought, disciplined action
  6. Great leaders set their companies up for success long after they’re gone
  7. Great companies have rigorous culture, not ruthless – this is a very important distinction
    1. When in doubt, don’t hire. Keep looking
    2. When you know you need to make a people change, act
    3. Put your best people on your biggest opportunities, not your biggest problems
  8. Many companies and startups fail because they respond poorly to growth and success
  9. The purpose of bureaucracy is to compensate for incompetence and lack of discipline
  10. Give people freedom, but freedom within a framework
  11. Create a “stop doing” list
  12. It takes discipline to say no to big opportunities. The fact that something is a “once in a lifetime” opportunity is irrelevant if it doesn’t fit within the hedgehog framework
  13. Never be satisfied. You can be delighted, but never satisfied. 
  14. Small changes over time have tremendous results
  15. In order to be enduringly great, you must have core values, build them explicitly into your organization, and preserve them over time
  16. It is much easier to become great than to remain great
  17. Greatness doesn’t depend on size
  18. It is not harder to build something great than something good – what it does require is clarity and conscious decisions into what it takes to be great
What I got out of it
  1. Really good read and case study in what it takes to transform

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