Book Summary: Good To Great


Explore 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:

a. 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.

b. 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:

a. 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.

b. Strategy per se did not separate the good to great companies from the comparison groups.

c. Good-to-great companies focus on what Not to do and what they should stop doing.

d. Technology has nothing to do with the transformation from good to great. It may help accelerate it but is not the cause of it.

e. Mergers and acquisitions do not cause a transformation from good to great.

f. Good-to-great companies paid little attention to managing change or motivating people. Under the right conditions, these problems naturally go away.

g. 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.

h. Greatness is not a function of circumstance; it is clearly a matter of conscious choice.

i. 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.

j. 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.

k. 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.

l. 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.

m. Potential Level 5 leaders exist all around us, we just have to know what to look for.

n. 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.

o. Before answering the "what" questions of vision and strategy, ask first "who" are the right people for the team.

p. 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.

q. 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.

r. 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.

s. The old adage "People are your most important asset" is wrong. People are not your most important asset. The right people are.

t. Whether someone is the right person has more to do with character and innate capabilities than specific knowledge, skills or experience.

u. The Hedgehog Concept is a concept that flows from the deep understanding about the intersection of the following three circles:

1.What you can be best in the world at, realistically, and what you cannot be best in the world at

2.What drives your economic engine

3.What you are deeply passionate about

v. 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.

w. 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."

By: Regine P. Azurin and Yvette Pantilla http://www.bizsum.com "A Lot Of Great Books....Too Little Time To Read" Free Book Summaries Of Latest Bestsellers and More!

mailto:freenewsletter@bizsum.com BusinessSummaries is a BusinessSummaries.com service.

(c) Copyright 2001-2005, BusinessSummaries.com">BusinessSummaries.com

Regine Azurin is the President of a company that provides business book summaries of the latest bestsellers for busy executives and entrepreneurs.


MORE RESOURCES:
'The two things I love most are novels and birds, and they're both in trouble,' says The Corrections author, one of the world's most famous birdwatchers, in an extensive interview in The Guardian

With less than 10 days to go until Thanksgiving and the start of the holiday shopping season, independent bookstores around the country are finalizing their plans for the sixth annual Indies First celebration. Held every year on Small Business Saturday, the day after Black Friday, Indies First has grown to include more than 500 indie bookstores around the country.

Amazon confirmed Tuesday morning that it has chosen sites in New York City and Northern Virginia as the locations for its new headquarters. As previously reported, the New York City office will be located in the Long Island City neighborhood in Queens. The Northern Virginia site will be in the National Landing section of Arlington, about five miles away from Crystal City, which previously had been reported as the Amazon choice in the metro Washington, D.C., area.

Stan Lee, who as chief writer and editor of Marvel Comics helped create some of the most enduring superheroes of the 20th century and was a major force behind the breakout successes of the comic-book industry in the 1960s and early '70s, died on Monday in Los Angeles. He was 95.

A worldwide strike by antiquarian booksellers against an Amazon subsidiary proved successful after two days, with the retailer apologizing and saying it would cancel the actions that prompted the protest.

It was a rare concerted uprising against any part of Amazon by any of its millions of suppliers, leading to an even rarer capitulation. Even the book dealers said they were surprised at the sudden reversal by AbeBooks, the company's secondhand and rare bookselling network.

The uprising, which involved nearly 600 booksellers in 27 countries removing about four million books, was set off by the retailer's decision to cut off stores in five countries: the Czech Republic, Poland, Hungary, South Korea and Russia. AbeBooks never explained its actions beyond saying it was related to payment processing...

Christopher Lehmann-Haupt, a nationally influential literary critic for The New York Times for three decades, who wrote some 4,000 reviews and essays, mostly for the daily column Books of The Times, died on Wednesday in Manhattan. He was 84.

Jin Yong, a literary giant of the Chinese-speaking world whose fantastical epic novels inspired countless film, television and video game adaptations and were read by generations of ethnic Chinese, died on Oct. 30 in Hong Kong. He was 94.

... For those of us lucky enough to know Todd, it was not only the adorable, customizable structures of the libraries that made him happy but it was something far bigger: community. For Todd, Little Free Libraries were places that strengthened community ties where they existed and built ties where they were absent. And he loved how comments and challenges sparked new ideas and initiatives.

Not enough Little Free Libraries in high-needs communities? Todd created the Impact Library Grants Fund. Interested in ways to engage a community? Todd formed and encouraged the use of the Action Book Club. Looking for more positive interaction between youth and law enforcement? Todd's answer was to create the Kids, Community & Cops program. Looking to create better conversations around books? Pass out Whatcha Readin' buttons. ...

Beginning today and lasting a week, more than 300 booksellers around the world are not selling titles on AbeBooks, the Amazon subsidiary that specializes in collectible and used books, to protest AbeBooks' decision to ban booksellers from several nations, including South Korea, Hungary, the Czech Republic and Russia. The action is called Banned Booksellers Week and was begun, the New York Times said, by British bookseller Simon Beattie.

The plea went out a few weeks ago from October Books in the port city of Southampton, England: "Care to lend a hand?"

Volunteers were needed to help the store move to a new location about 500 feet down the road--a move made possible by a fundraising campaign that allowed the beloved local store to buy its new location for over half a million pounds (about $650,000) thus protecting it from future rent increases--which had forced it out of its former building.

This past Sunday, a human chain began forming from the old October Books stockroom, snaking past 54 doors to the new building. Hand-to-hand, the chain of people passed thousands of books over a few hours.

"It was very moving," Ms. Haynes said, adding that the employees were "all getting choked up" about how members of the community had leapt to help out.

thatware.org ©