Introduction
“Good to Great” is the result of five years of research by Collins et al. They have found that famous companies achieve success after many years thanks to ordinary but very different factors. And that's what distinguishes them from other mid-range companies.
These factors have been drawn into key points related to leadership skills, corporate culture and strategic management.
Who should read this book?
- Directors, investors and managers want to turn their companies from mediocre to extraordinary.
- Entrepreneurs want to start a successful business right from the start.
- Anyone who wants to be a good leader, build a good corporate culture with good strategies.
About the author
Jim Collins is an American writer, lecturer, and consultant who has taught at the Stanford Graduate School of Business and is a frequent contributor to Fortune, Business Week, and the Harvard Business Review. His previous book: Built to Last has sold over 4 million copies.
Good is the enemy of the Great. And that's one of the main reasons why so few are great. We don't have great schools precisely because we have good schools. We don't have great governments precisely because we have good governments. Very few people live a great life, because one accepts a good life. Most companies never become great because most become quite good. And this is a big problem for companies.
“Whatever the end result, the transition from Good to Great never happens quickly. There is no such thing as a magic moment, the process is like pushing a giant flywheel non-stop in a certain direction, round by round, building momentum until it hits a breakout point, and then goes further. .”
Never be satisfied only with good deeds or excellence. Discover what makes great.
Most companies that have become great enjoy the years when their names were unknown, the years before they surprised the world with their results. In fact, they were just like other companies at first until a certain turning point, and they were far behind the rest of the competition. Greatness is not through revolution. Contrary to popular opinion, these companies don't pour in a new CEO to change things around - that's the mark of a mediocre company. And although the remarkable results of great companies can sometimes be mistaken for instant success, that leap comes after years of effort, what Collins calls "push the flywheel".
The Walgreens pharmacy chain in the US was a mid-sized company that didn't stand out in the market for four decades in a row until 1975, it left the average company behind and started new ones. its outstanding success. From 1975 to 2000, Walgreens outperformed the stock market by 15 times, Intel technology corporation 2 times, General Electric 5 times, and famous brand Coca Cola 8 times. What makes rapid and sustainable development above average? Jim Collins began a five-year research effort to find the answer. From 11 major companies, he drew their conclusions in “From Good to Great: Why Some Companies Make the Leap Forward, while Others Don't?”. Those conclusions are based on outstanding performance over the course of 15 years, says Collins:“It is very difficult to find a group of old-fashioned people.” The 11 major companies include Fannie Mae (mortgage mortgage company), Gillette (razor), Kimberly-Clark (diapers, tissues), Kroger (discount supermarket), Nucor (steel maker), Philip Morris (tobacco, chocolate, coffee), and Pitney Bowes (office equipment). For each of these companies, Collins looks for a consistently good company to compare (e.g. Eckerd to Walgreens). So what conclusions have Collins drawn from this study?Collins is looking for a company that consistently performs well (e.g. Eckerd vs. Walgreens). So what conclusions have Collins drawn from this study?Collins is looking for a company that consistently performs well (e.g. Eckerd vs. Walgreens). So what conclusions have Collins drawn from this study?
Great vision without great people also becomes meaningless.”
Leader level 5
Collins wasn't really interested in leadership when he first started studying. He wanted to break away from the “great leader” concept of so many companies, where the mindset that having one dynamic leader changed everything. In fact, he realized that leadership is a very important factor, but the type of leadership that makes great companies surprised him. The leaders of great companies are a paradoxical combination of ambition and humility, more like Lincoln and Socrates than Patton or Caesar. Collins describes Darwin Smith, the CEO of Kimberly Clark, as someone with "an uncanny shyness and lack of arrogance...along with an unyielding, even stoic, determination to life".
Ambition cannot be seen outside of a great leader, as they always direct all their efforts and determination into ensuring the long-term success of the company. They are rather reluctant to talk about themselves, instead talking about people who have made great contributions, and always talk about their merits (although what they do is really difficult). , Collins was surprised how many people mentioned "luck" in their personal and corporate success). Great leaders have always shared a passion for their company's products, despite their popularity. The people who worked at Gillette, for example, poured $200 million into the development of the Mach 3 razor – a huge hit then, mainly because they were interested in it.
Because they put the company first, Level 5 leaders – as Collins calls them – ensure that everyone who follows them has the same chance of succeeding – or more. In contrast, the CEOs of the companies compared only wanted their personal achievements to stand out, so they always chose successors who weren't as capable. Level 5 leaders intentionally keep their profile to being mediocre, “ordinary people quietly doing extraordinary things”. They always strive for the great future of the company, even after their tenure ends. A lot of people still keep their office in the company after leaving the job.
People go first, work follows
Usually, when you plan to ride a bus, you usually orient where you are going to drive the bus and then ask people to get on the bus. However, Collins and his team found that when the leaders of the good-to-great companies start up, they do the opposite: “First, they find the right people to get in the car ( and ask the wrong people to get off the bus), and then think about where to drive the car.”
First, they find the right people to invite to the car (and invite the wrong people to get off), then they think about where to drive the car.
If you find the right people from the start, they will always be able to adapt to any change in direction or strategy. If people join the train just because of where it is going, what happens if you go 10 kilometers and you want to change direction? Then you will be in trouble right away. But if people get on the bus because they care about the people who are also on it, it will be easier to change direction.
Also, if you find the right people in the first place, you won't have to push them, because they're already driven by internal motivation. Interestingly, great companies don't pay more than good, and compensation isn't a big factor in motivating people when they have something bigger to achieve.
Finally, great companies have a culture of “strict but not ruthless”. Rigorous means that everyone knows and follows the company's standards. If they don't respond, then they leave. On the other hand, ruthlessness is a characteristic of a good company, they consider staff reduction, company restructuring as the first strategy to improve performance. This creates a fear, makes employees less effective and reduces motivation, while in large companies, their employees always have a team spirit that challenges all to do well. Best. They understand that: Great vision without great people also becomes meaningless.
Face the harsh truth (but never lose faith)
Great companies are different in the base they make decisions, They are not based on management fads or delusional dreams of greatness, they are constantly re-evaluating themselves to achieve their goals. They face the situation head-on. As a result, they become stronger afterwards.
Collins found that charismatic leaders often influence the way a company succeeds, because the employees there think only about “what the CEO would think” instead of providing metrics as a basis. for decisions. A key mission in taking a company from good to great is to create a culture in which people have ample opportunity to be heard, and culminating in truth being heard. It consists of four basic actions:
- Lead by questions, not by answers
- Engage in dialogue and debate, don't force it.
- Do the analysis, don't blame
- Set up red flags to make information non-skippable.
Collins quote from Winston Churchill: “I do not promote dreams. Truth is always better than dreams. A key psychological concept of great companies is the Stockdale Paradox: Hold on to the belief that you will eventually win, while facing the harsh reality of the present.”
The concept of three circles – the core idea
Great companies have a single idea or goal that drives everything they do. The concept can take years to perfect, but once positioned, they can make for a huge success because they are different.
Take, for example, the pharmacy chain Walgreens. They decided that they would become the best and most convenient pharmacy with high profit per customer visit. Wells Fargo isn't trying to beat Citicorp or Bank of America to become America's largest global bank. Instead, they focused on being a high-margin bank focused on the American West.
Going from good to great requires a deep understanding of the three intersecting circles, and those three circles are demonstrated by the answers to three questions:
– What areas can we do best? (Not the area we want to do best)
– What areas are we passionate about?
– What key economic indicators should we focus on?
If you can find the best thing you can do in the world, and you love to do it, and make a profit, you're on to the start of a great business. If you have two of the three factors above, you will only have success, but not great.
Technology pedal
According to Collins, technology is never the foundation of greatness, it is management.
Technology is rarely mentioned as an important factor in the success of leaders in large companies. There is no such thing as “This technology will make a company”, “We can use it to go further”. Ordinary companies choose technology for its benefits, while great companies adopt technology selectively, investing in new means of work only when it aligns with their vision. .
As Collins points out, “Technology, by itself, was never the primary cause of greatness or decline.” However, using technology wisely is part of the culture of great companies.
“Technology, by itself, was never the main cause of greatness or decline”
Summary
How does strategic management make ordinary-to-great companies different from other mediocre companies?
- Finding a core idea will give you a clear path.
- Success comes from small impacts that add up in the right direction.
- New technology should only be seen as a springboard towards the goal, not the goal.
How do the people and culture make great-ordinary companies different from mediocre companies?
- Level 5 leaders make the successful progression from mediocre to great.
- Hiring the right people in the right positions is the foundation of greatness.
- Face the harsh truths, but never lose faith.
- A culture of strict discipline is essential to following the core idea.
