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Main » 2014 » January » 11 » Book Summary- Good to Great
7:25 AM Book Summary- Good to Great |
Book Summary: Good to Great This article is based on the following book:
Good to Great
"Why Some Companies Make the Leap... and Others Don't"
Jim Collins, co-author of Built to Last'
Random House Business Books,
London
300 pagesExplore what goes into a company's transformation from
mediocre to excellent. Based on hard evidence and volumes of data, the book
author (Jim Collins) and his team uncover timeless principles on how the
good-to-great companies like Abbott, Circuit City, Fannie Mae, Gillette,
Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells
Fargo produced sustained great results and achieved enduring greatness, evolving
into companies that were indeed Built to Last'. The Collins team selected 2 sets
of comparison companies:
Direct comparisons Companies in the same industry with the same
resources and opportunities as the good-to-great group but showed no leap in
performance, which were: Upjohn, Silo, Great Western, Warner-Lambert, Scott
Paper, A&P, Bethlehem Steel, RJ Reynolds, Addressograph, Eckerd, and Bank of
America. Unsustained comparisons Companies that made a short-term shift from
good to great but failed to maintain the trajectory, namely: Burroughs,
Chrysler, Harris, Hasbro, Rubbermaid, and Teledyne Wisdom In A Nutshell:
Ten out of eleven good-to-great company leaders or CEOs came from the
inside. They were not outsiders hired in to save' the company. They were either
people who worked many years at the company or were members of the family that
owned the company. Strategy per se did not separate the good to great companies
from the comparison groups. Good-to-great companies focus on what Not to do and
what they should stop doing. Technology has nothing to do with the
transformation from good to great. It may help accelerate it but is not the
cause of it. Mergers and acquisitions do not cause a transformation from good to
great. Good-to-great companies paid little attention to managing change or
motivating people. Under the right conditions, these problems naturally go away.
Good-to-great transformations did not need any new name, tagline, or launch
program. The leap was in the performance results, not a revolutionary process
post by haiyan902. Greatness is not a function of circumstance; it is clearly a
matter of conscious choice. Every good-to-great company had Level 5 leadership
during pivotal transition years, where Level 1 is a Highly Capable Individual,
Level 2 is a Contributing Team Member, Level 3 is the Competent Manager, Level 4
is an Effective Leader, and Level 5 is the Executive who builds enduring
greatness through a paradoxical blend of personal humility and professional
will. Level 5 leaders display a compelling modesty, are self-effacing and
understated. In contrast, two thirds of the comparison companies had leaders
with gargantuan personal egos that contributed to the demise or continued
mediocrity of the company. Level 5 leaders are fanatically driven, infected with
an incurable need to produce sustained results. They are resolved to do whatever
it takes to make the company great, no matter how big or hard the decisions. One
of the most damaging trends in recent history is the tendency (especially of
boards of directors) to select dazzling, celebrity leaders and to de-select
potential Level 5 leaders. Potential Level 5 leaders exist all around us, we
just have to know what to look for. The research team was not looking for Level
5 leadership, but the data was overwhelming and convincing. The Level 5
discovery is an empirical, not ideological, finding. Before answering the what
questions of vision and strategy, ask first who are the right people for the
team. Comparison companies used layoffs much more than the good-to-great
companies. Although rigorous, the good-to-great companies were never ruthless
and did not rely on layoffs or restructuring to improve performance.
Good-to-great management teams consist of people who debate vigorously in search
of the best answers, yet who unify behind decisions, regardless of parochial
interests. There is no link between executive compensation and the shift from
good to great. The purpose of compensation is not to motivate' the right
behaviors from the wrong people, but to get and keep the right people in the
first place Louis Vuitton outlet.
The old adage People are your most important asset is wrong. People are not your
most important asset. The right people are. Whether someone is the right person
has more to do with character and innate capabilities than specific knowledge,
skills or experience. The Hedgehog Concept is a concept that flows from the deep
understanding about the intersection of the following three circles:
What you can be best in the world at, realistically, and what you cannot be
best in the world at What drives your economic engine What you are deeply
passionate about Discover your core values and purpose beyond simply making
money and combine this with the dynamic of preserve the core values - stimulate
progress, as shown for example by Disney. They have evolved from making short
animated films, to feature length films, to theme parks, to cruises, but their
core values of providing happiness to young and old, and not succumbing to
cynicism remains strong. Enduring great companies don't exist merely to deliver
returns to shareholders. In a truly great company, profits and cash flow are
absolutely essential for life, but they are not the very point of life. "IF
YOU'RE DOING SOMETHING YOU CARE DEEPLY ABOUT AND IF YOU BELIEVE IN IT, IT'S
IMPOSSIBLE TO IMAGINE NOT TRYING TO MAKE IT GREAT."
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