Good to Great
By Sam Watts
Every time we embark on a client discovery session the lines blur massively between marketing and a broader business review. Fundamentally, we are working with our clients to find the best road map that will build their brand to achieve success. To do this effectively we have to take a step back and look at the bigger picture so that our piece of the jigsaw contributes to them achieving a defined vision (or we work with them to help define that vision in the first place!).
This is why I read this book. Understanding what makes a business great, not just good, got my attention and made me read on.
I haven’t read Jim Collins first book, Built to Last, but that didn’t matter (note: I will now as it links so closely with the findings in this book and Jim argues that Good to Great principles should be applied first and those in Built to Last applied in order to sustain greatness).
Ok, a bit of context (from the book jacket intro): In 1996 Jim Collins and his research team set out to answer one simple question: ‘Can a good company become a great company and, if so, how?’ Most great companies grew up with superb parents – founders like George Merck, David Packard and Walt Disney – who instilled the seeds of greatness early on. But what about the vast majority of companies that wake up part-way through life and realise that they’re good, but not great?’
What did Collins and his team discover? They found the key concepts that permitted these good-to-great companies to achieve cumulative stock returns 6.9 times the stock market in fifteen years. To put that in perspective, that’s a rate better than twice the rate achieved by General Electric. Put another way, a dollar invested in a mutual fund of the good-to-great companies in 1965 grew to $470 by 2000 – compared to just $56 in the general stock market. These are extraordinary numbers, made all the more so by the fact they came from previously unremarkable companies.
Big numbers. Big facts. Big results. So how did they do it? Well Collins takes you through a (relatively) easy read to present his, and his 21 researchers, findings and conclusions. It’s a 300-page tome, of which 218 pages are core book and the remainder appendices including criteria, findings and footnotes.
Collins argues that good is the enemy of great: it’s easier to settle for good. “The vast majority of companies never become great, precisely because the vast majority become quite good – and that is their main problem.” But Collins was intrigued: was the disease of ‘just being good’ incurable or could a good company become a great company. And if so, how?
The upshot is that Collins and his team, after much research, debate and analysis of those companies that made the grade concluded that yes, it is possible. They honed in on eleven businesses that met their very tough standard (performance of three times the market over fifteen years) and scrutinised them to within an inch of their lives.
Collins defines a clear process that his team believed transformed a business from good to great, moving from build-up to breakthrough. The build-up phase was defined by:
- Level 5 leadership
- First who… then what
- Confront the brutal facts
Breakthrough was defined by:
- Hedgehog concept
- Culture of discipline
- Technology acceleration
Wrapped around the process was the concept of the flywheel – ‘Good to great comes about by a cumulative process – step by step, action by action, decision by decision, turn by turn of the flywheel – that adds up to sustained and spectacular results’. In other words, although many successful companies looked like overnight successes, in reality they had been working hard over more than a decade in most cases to establish their business foundation.
The challenge for me in reading this was that the eleven businesses, by nature of the criteria, had to have been trading for at least 30 years and were at least national successes, if not international or global. Translating the principles (one being ‘what can we be the best in world at’) into concepts that would apply to SMEs was challenging. But the big takeaways for me were:
- That good-to-great companies are headed up by ‘level 5 leaders’; those that embody a paradoxical mix of personal humility and professional will. They are ambitious but first and foremost for the company, not themselves. What was comforting was the author’s belief that you could evolve from a level 4 to a level 5 leader by developing certain characteristics and behaviours. A chapter well worth reading.
- First define the who, then the what. i.e. get the right people on the bus (in the right seats), the wrong people off the bus and only then define what you are going to do and how you are going to achieve greatness. This point fascinated me - that if you get the right people on the bus THEN you collectively agree what it is you are going to achieve, then you stand a far greater chance of success. And sustained success. With a level 5 leader and the right team, it would appear anything is possible.
- Confront the brutal facts. You have to get really clear on the current state of the organisation, ‘telling it like it is’. Only then can you hope to stand a chance of making meaningful change that will set your flywheel in motion, in the right direction.
Would I recommend this book? Yes, if you are in a position to influence the strategic direction of a business. It arms you with a handful of interesting and insightful concepts that help provide direction and inspiration, drawing on many real life examples to illustrate the point.
£14.95 hardcover (Amazon)
"The bestselling 'Built to Last' answered the question of what it takes to build an enduring great company from the ground up. 'Good to Great' answers an even more compelling question: ‘can a good company become a great company and, if so, how?’. After a five-year research project, Collins concludes that good to great can and does happen. In this book, he uncovers the underlying variables that enable any type of organization to make the leap from good to great while other organizations remain only good. Rigorously supported by evidence, his findings are surprising - at times even shocking - to the modern mind. 'Good to Great' achieves a rare distinction: a management book full of vital ideas that reads as well as a fast-paced novel." (Amazon)