What is the main message of Good to Great?

The main message of Good to Great is achieving greatness through disciplined people, thought, and action.

Who is the author of Good to Great?

The author of Good to Great is Jim Collins.

Management & Leadership

Good to Great Book Summary - Good to Great Book explained in key points

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Good to Great summary

Name: Good to Great
Rating: 4.5 (862 reviews)
Author: Jim Collins

Jim Collins

Why Some Companies Make the Leap...and Others Don't

4.5 (862 ratings)

17 mins

Brief summary

Good to Great by Jim Collins is a business book that explores the factors that distinguish good companies from great ones. It offers insights on leadership, strategy, and organizational culture that can help businesses achieve sustained success.

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Strategy

Table of Contents

Good to Great
Summary of 8 key ideas

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Key idea 1 of 8

What’s in it for me? Take your company from good to great.

Jim Collins’s previous best seller, Built to Last, explains how great companies sustain high performance and stay great.

But the thing is, most companies aren’t “great” – which begs the question: How do companies go from good to great? And what do they do differently from their competitors who stay mediocre at best?

To answer this conundrum, Collins and his research team studied three groups of public US companies over a five-year period.

First, they looked at good-to-great companies – companies that had been performing at or below the average stock market performance for 15 years before making the transition to “greatness.” What is greatness? According to Collins, it’s a company that’s been generating cumulative returns of at least three times the general stock market for 15 years.

The second group of companies they studied were the direct comparison companies. These organizations remained mediocre or dwindled even though they had roughly the same possibilities as the good-to-great companies during a period of transition.

And the third group, unsustained comparison companies, made a short-lived transition from good to great before sliding back to a performance level substantially below the stock market average.

Over the course of their five years of research, Collins and his team examined over 6,000 press articles and 2,000 pages of executive interviews to pinpoint exactly what good-to-great companies did differently.

This Blink distills their findings into actionable steps that’ll help your company make the same leap.

Finding your “hedgehog concept” will give you a clear path to follow.

Jim Collins has an analogy for a strategy that good-to-great businesses use to clarify their business decisions.It goes like this:

Imagine a cunning fox hunting a hedgehog. Each day, the fox comes up with a plethora of surprise attacks and sneaky tactics to devour it. And each time, the hedgehog responds in the same way: it curls up into a spiky, unbreachable ball. Its adherence to this simple strategy is the reason the hedgehog prevails day after day.

Good-to-great companies all find their own hedgehog concept by asking themselves three key questions:

What can we be the best in the world at?

What can we be passionate about?

What is the key economic indicator we should concentrate on?

After an average of four years of iteration and debate around these questions, good-to-great companies eventually discover their own simple hedgehog concept. From that point on, every decision the company makes is in line with this concept – and success follows.

The hedgehog concept is about knowing yourself as a company, acting in line with that identity, and having a clear goal. By asking and answering these questions, you can grow in a focused way rather than sporadically in several directions.

It’s all about simplicity.

Success comes from many tiny, incremental pushes in the right direction.

When you look at them from a distance, good-to-great companies seem to go through a sudden and dramatic transformation. The companies themselves, however, are often totally unaware they’re in the midst of changing; their transformation has no defined slogan, launch event, or change program.

Rather, their success is the sum of tiny, incremental pushes in the direction of their simple strategy. Like with a flywheel, these small improvements generate results that motivate the companies to push further – until enough speed is gathered for a breakthrough. Their unwavering faith and adherence to the hedgehog concept is rewarded by a virtuous circle of motivation and progress.

New technology should be viewed as an accelerator toward a goal – not as a goal itself.

Good-to-great companies primarily use new technology to accelerate their momentum in the direction they’re already going. They never let the technology indicate the direction itself. For these companies, technology is a means to an end – not the other way around.

When a good-to-great company is contemplating whether to adopt a particular technology, they stack it up against their larger company goals and direction. If this technology can help them on that path, great – they’ll become pioneers in it! Otherwise, they’ll either ignore it or match their industry’s pace in adopting it.

Level 5 leaders drive successful transformations from good to great.

We all know that company leadership is important. But through his research, Collins discovered just how critical it is.

Each company who went from good to great had level 5 leadership during their transition. Level 5 leaders are not only excellent individuals, team members, managers, and leaders; they’re also single-mindedly ambitious on behalf of the company, fanatically driven toward results, and want their organization to continue performing long after they leave.

The right people in the right place are the foundation of greatness.

The importance of hiring the right people goes beyond just the CEO and top leadership. Collins found that focusing on hiring good people throughout the entire company makes a huge impact.

In fact, asking “who” takes precedence over asking “what.” In other words, the transformation from good to great always begins with getting the right people into the company and the wrong people out of it – even before defining a clear path forward. That’s because the right people will eventually find a path to success.

Success requires confronting reality – and never losing faith.

Good-to-great companies constantly walk the line of the Stockdale paradox, which was named after a US admiral captured during the Vietnam War.

As a high-ranking officer detained at the infamous “Hanoi Hilton” prison, Stockdale was repeatedly tortured by the enemy. Not knowing if he would ever see his family again, and despite the dire circumstances, he never lost faith that somehow he would get home.

Leaders must create an environment where harsh facts can be aired without hesitation.

A company can’t face harsh facts if they’re never voiced. So it’s up to leaders to create an environment where tough issues can be aired without hesitation. A strong, charismatic leader can be more of a liability than an asset if it means others want to hide the unpleasant truth from them.

In management meetings, leaders must take the role of a Socratic moderator – asking questions to uncover truthful opinions instead of giving ready answers. Leaders should also encourage debates to rage during meetings so the best possible decisions are reached.

Foster a culture of rigorous self-discipline to adhere to the simple hedgehog concept.

Let’s go back to the hedgehog concept for a moment – the idea that by asking yourself a few questions as an organization, you can create a compass that will help get your company go from good to great.

To get the most out of this hedgehog method, you need a culture of rigorous self-discipline. It’s not enough to just know the direction you’re going in. You need to actively take the steps to get there.

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What is Good to Great about?

Good to Great (2011) presents the findings of a five-year study by Jim Collins and his research team. They identified public companies that had achieved enduring success after years of mediocre performance and isolated the factors that differentiated those companies from their lackluster competitors. These factors have been distilled into key concepts regarding leadership, culture, and strategic management.

Good to Great Review

Good to Great (2001) by Jim Collins presents a groundbreaking study on what distinguishes exceptional companies from the rest. Here's why this book is worth reading:

Based on a rigorous research and analysis of 1,435 companies, the book uncovers common traits that turn good companies into great ones.
It offers practical strategies and insights for leaders to implement in their organizations, empowering them to drive sustainable greatness.
Through fascinating case studies, the book reveals how companies successfully maintained long-term success by embracing disciplined practices and cultivating high-performing teams.

Who should read Good to Great?

Managers, founders, and executives who want to take their business to the next level
Leaders seeking to simplify their business strategy
Anyone interested in leading a great corporate culture

About the Author

Jim Collins is an American author, lecturer, and consultant. He has taught at the Stanford Graduate School of Business and is a frequent contributor to Fortune, BusinessWeek, and Harvard Business Review.

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