G O O D T O G R E AT

W h y S o m e C o m p a n i e s M a k e t h e L e a p … a n d O t h e r s D o n ’ t

B o o k B y J i m C o l l i n s S l i d e s b y R y a n B a t t l e s

C O L L I N S , J A M E S C . G O O D T O G R E AT: W H Y S O M E C O M PA N I E S M A K E T H E L E A P - - A N D O T H E R S D O N ' T.

N E W Y O R K , N Y: H A R P E R B U S I N E S S , 2 0 0 1 .

Collins and his research team selected “great” companies.

The most important factor in the selection process was a period of growth and

sustained success that far outpaced the market or industry average.

The companies that were selected for inclusion were Abbott, Fannie Mae, Circuit

City, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes,Walgreens, and

Wells Fargo.

CEO compensation, technology, mergers and acquisitions, and change management

initiatives played relatively minor roles in fostering the Good to Great process

Disciplined people, disciplined thought, and disciplined action, were likely the most

significant factors in determining a company’s ability to achieve greatness.

One of the unique factors and variables that differentiate good and great companies is the quality and nature of leadership in the

firm.

Many of these leaders of great companies displayed an unusual mix of intense

determination and profound humility.

These leaders often have a long-term personal sense of investment in the

company and its success, often cultivated through a career-spanning climb up the

company’s ranks.

The personal ego and individual financial gain are not as important as the long-term

benefit of the team and the company to true Level 5 leaders.

The much-touted trend of bringing in a celebrity CEO to turn around a flailing firm is

usually not conducive to fostering the transition from Good to Great.

Securing high-quality, high-talent individuals with Level 5 leadership abilities must be

undertaken before an overarching strategy can be developed.

Move potentially failing employees and managers to new positions, but don’t

hesitate to remove personnel who are not actively contributing.

Great companies are able to identify and assess defining facts in the company and in

the larger business environment.

To find emerging trends and potential problems:

1) Lead with questions, not answers

2) Engage in dialogue and debate, not coercion

3) Conduct autopsies without blame

4) Build red flag mechanisms that turn information into information that cannot be

ignored.

Simplicity can sometimes lead to greatness.

When confronted by predators, the hedgehog’s simple but surprisingly effective response is to roll up into a ball. While other

predators, such as the fox, may be impressively clever, few can devise a strategy

that is effective enough to overcome the hedgehog’s simple, repetitive response.

In great companies, each individual functions as an entrepreneur, with a deeply

rooted personal investment in both their own work and the company’s success.

Great companies approach the prospect of new and emerging technologies with the

same prudence and careful deliberation that characterizes all of their other business

decisions

By making decisions and taking actions that reinforce and affirm the company’s

"hedgehog" competencies, executives initiate positive momentum.

Companies need to exist for a higher purpose than mere profit generation in

order to transcend the category of merely good.

T H I S H A S B E E N A B R I E F O V E R V I E W O F T H E M A I N I D E A S O F G O O D T O G R E AT.

!B U Y T H E B O O K F O R T H E F U L L E X P E R I E N C E

!C O L L I N S , J A M E S C . G O O D T O G R E AT: W H Y

S O M E C O M PA N I E S M A K E T H E L E A P - - A N D O T H E R S D O N ' T. N E W Y O R K , N Y:

H A R P E R B U S I N E S S , 2 0 0 1 . !

A L L P R O D U C T A N D C O M PA N Y N A M E S A R E T R A D E M A R K S O R R E G I S T E R E D T R A D E M A R K S O F

T H E I R R E S P E C T I V E H O L D E R S . U S E O F T H E M D O E S N O T I M P LY A N Y A F F I L I AT I O N W I T H O R

E N D O R S E M E N T B Y T H E M .

D O W N L O A D T H E B U S I N E S S B O O K C O L L E C T I O N

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