picture of the red-cover of the front of the Good to Great book

Notes from the classic 2001 business book “Good to Great”

Data can point to commonalities of companies that go from being just good to being really great.

Published in 2001 as the middle in a trio of business books written by Stanford University’s Jim Collins, Good to Great is a classic of the genre. Though I’ve heard it cited many times, I only just read it earlier this year. The concept is a likeable one: Collins and a team of graduate students sorted through lots of data to find very similar peer companies, some of which accelerated into greatness and others which only treaded water. Then they sorted through to find what’s similar. Lots of stuff like this happens today — like this popular Medium post.

Twenty years later, the book still has value, even if many of the companies have faded from their greatness and it’s always easy to tease a business book. At its most simple, Collins introduces a simple framework that I’ve played with for my own company (his “hedgehog concept” is a way to communicate: What is that your company can do better than anyone else in the world that can drive financial success?)

Below I share a few notes for my future use:

  • “Level 5 leaders” build disciplined culture that lasts
  • Start with The Who before the what or the where; After getting right people on the bus many spent time making sure they knew where everyone should be on the bus and who was missing
  • The Hedgehog concept is the most important takeaway from the book: what can you do better than anyone else? Optimize for it above all else.
  • Most companies build their bureaucratic rules to manage of the small percentage of wrong people on the bus, which in turn drives with the right people on the bus, which then increases the percentage of wrong people on the bus, which increases the need for more bureaucracy to compensate for incompetence and lack of discipline, which then for third Drive to the right people away, and so forth”
  • We recognize that planning is priceless, but plans are useless: Abbott
  • Create a stop doing list: what is it that we are are not able to be the best at
  • Budgeting should be used to determine which activity should be fully funded and which should not be funded all, depending on those that best support your hedgehog concept
  • Good to great transition was a buildup to a breakthrough, often taking many years (5,7,10 or more years) but the coverage only comes for the sudden success. It was accumulating momentum like a flywheel
  • Technology and acquisitions should accelerate a hedgehog concept not attempt to create it
  • Staff rarely knew they were part of something happening until it already had
  • With the right people on the bus leaders didn’t spend time on finding alignment or motivating people. The work, the team and the momentum itself was the motivation
  • Compensation didn’t attract the right people it was about keeping the right people
  • Build a clock, don’t have one leader tell the time
  • From Built to Last (his first big book), WhatIs your BHAG (big hairy audacious goal); in Good to Great that is clarified as one established not with bravado but with an understanding, built on three circles of hedgehog concept
  • BHAG is the center of the three circles hedgehog concept (To eliminate the job search ?)
  • Great companies didn’t need to force culture with activities; they focused on the work and the culture followed
  • The question is not why greatness the question should be what work makes you feel compelled to try to create greatness?