Good to Great: Why Some Companies Make the Leap…and Others Don’t by Jim Collins.
Harper Collins, 2001, 300 pp.
Good to Great is an interesting study of factors that transform a business to super success. Neurosurgeons, who all are in business, need to know what those factors are and how they can be put into practice.
Author Jim Collins and his research team have studied the history of companies in the United States. They identified 11 businesses that have gone from “solid performers” to “great companies” that have made the leap to great results sustained for at least 15 years. These 11 companies-Abbott Laboratories, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo-have generated cumulative stock returns that beat the general stock market by an average of seven times in 15 years. Also studied were matched companies in the same industry that did not do as well.
Counterintuitive Conclusions Lead to Questions
This study is valuable because so many of the conclusions are surprising and counterintuitive. I was most surprised that:
- These companies were not led by charismatic leaders of great vision. The leadership was instead characterized by humility and ability to always put the company first. Collins calls these kinds of leaders Level 5 Executives, whose ambition always is first and foremost for the institution, not themselves. A company led by genius leader with 1,000 helpers will always fall when the genius departs.
- Mission is not nearly as important as people. To transform a company, the “who” questions comes before the “what” decisions-before vision, before strategy, before organizational structure, before tactics. The right people are a company’s most important assets; executive compensation has no relationship to success.
Every company must face the brutal facts of its current reality. Questions come before answers. Dialog, debate, and open discussion always win over coercion-but one must have faith.
Hedge-Hog or Fox?
Good-to-great companies are more like hedge-hogs (simple, dowdy creatures that know one big thing and stick to it) than foxes (crafty, cunning creatures that know many things but lack consistency).
Every great company must have a culture of discipline. This culture involves a duality. On the one hand, it requires people to adhere to a consistent system; yet on the other hand, it gives people freedoms and responsibility within the framework of that system.
Technology can be an accelerator of momentum but is not a creator of it. None of the good-to-great companies began their transformation with pioneering technology, yet they all became pioneers in the application of technology. How a company reacts to technological change is a good indicator of its inner drive for greatness.
The Buildup Before the Breakthrough
Good-to-great transformations never happen in one fell swoop. Enduring great companies must go through a process of buildup to breakthrough. Like pushing a giant, heavy flywheel, it takes a lot of effort to get the thing moving, but when it’s moving it builds momentum. Good-to-great leaders spend no energy trying to “create alignment,” “motivate the troops,” or “manage change.” Under the right conditions, the problems of commitment, alignment, motivation and change take care of themselves.
The real question is not, Why greatness? but, What work compels one to try to create greatness? The book suggests that those who to ask the questions, Why should we try to make it great? or Isn’t success enough? are probably engaged in the wrong line of work. Additionally, there must be a deep understanding of what we are deeply passionate about and can be the best at, as well as what drives our company’s economic engine.
Many readers will be familiar with Jim Collins’ previous book, Builtto Last. That book gave insight to the question, What does it take to start and build an enduring company from the ground up? Collins sees Good to Great as a prequel. While Built to Last emphasized discovering a company’s core values, Good to Great addresses a fundamental question raised, but not answered, in Built to Last: What’s the difference between a “good” BHAG (Big Hairy Audacious Goal) and a “bad” BHAG?
Good to Great promises a revealing look at the underlying principles of building a great company-and an interesting read for the neurosurgeon who desires to create a great practice.
Gary Vander Ark, MD, is a senior partner of Rocky Mountain Neurosurgical Alliance, Englewood, Colo., and past president of the Colorado Medical Society. He is the recipient of the 2001 AANS Humanitarian Award.