Good to Great: Why Some Companies Make the Leap and Others Don't

2012-11-03 11-54-07
Jim Collins
Harper Business
March 2001

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This book starts with a simple statement - “Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great.” In essence what Collins means by this statement is that becoming ‘good’ is too often ‘good enough’. He explores this concept through a systematic study of a handful of publicly traded companies considering the question, “Can a good company become a great company and, if so, how?”

His conclusion from this investigation is a good-to-great framework that identifies three essential categories for a company to become great: disciplined people, disciplined thought, and disciplined action. While all of these principles are fascinating, this book review focuses on one in particular from the disciplined people category: Level 5 Executive Leadership. Collins discovers that leaders of truly great companies are not flashy big personalities but rather those with an ability to “build enduring greatness through a paradoxical blend of personal humility and professional will.” He contrasts this with what he calls Level 4 Effective Leadership. An effective leader is able to inspire commitment to a vision and stimulate higher performance but lacks the Level 5 personal traits. The three levels below these he describes are: Competent Manager, Contributing Team Member, and Highly Capable Individual. As one example of Level 5 leadership, Collins uses Dave Packard (from Hewlett and Packard) as an example of a true Level 5 leader. Despite being one of Silicon Valley’s first billionaires, Packard spent his whole life in the small home he had built in 1957. When he passed away, Packard gave his entire $5.6 billion dollar estate to charity and his euology delivered by his family mentioned his past as a farmer but made no mention of his business success or the company Hewlett Packard.

For further details on this concept of Level 5 Leadership and the other principles of disciplined people, thought, and action, we recommend picking up this book.

We do need to point out though the fact that most companies in Collins' book did not do so good for the period from 2001 to 2010. Maybe there is more at play than just skill? Luck in choosing the right heuristic at that time!"