While Jim Collins’s study of how good companies become great ones focuses specifically on large corporations that fit the “good-to-great” model, he makes it clear from the start that the principles discussed throughout the book are intended to apply beyond the business world. Collins and his research team focus on companies because their stock value offers a clear measure of success and because information about this success over time is readily available. However, the guiding ideas Collins and his team glean from their research are also designed to be useful to individuals and other organizations—such as schools, churches, arts organizations, and community groups—that want to gain lasting greatness of their own. This broad view creates a sense throughout the book that transformation is possible for anyone and everyone, not just for companies or for organizations that share certain qualities. Collins puts forth the egalitarian perspective that remarkable improvement is within reach of any person or group, so long as they are willing to follow the principles he outlines.
Collins emphasizes that he and his research team repeatedly found that simple processes and disciplined effort were more important to companies’ success than complicated strategies, brilliant ideas, or flashy marketing. Because the author’s findings are so concrete, they reinforce the idea that success can be straightforward and comprehensible rather than mysterious and unattainable. Collins’s core concept of business strategy, which he calls the Hedgehog Concept, focuses on the idea that picking one clearly defined goal and pursuing it consistently is much more effective than trying to diversify or meet many goals simultaneously. Even its name, which refers to a folktale about the superiority of the simple hedgehog—which has just one very effective defense mechanism (spines) over the cleverer fox—reinforces the idea that greatness is available to any organization, no matter how simple.
In each chapter, Collins provides a list of concrete takeaways and ideas for applying them to other contexts. This authorial choice links the book’s concepts to readers’ lived experiences, and again encourages them to think of themselves as powerful actors who can make real change for themselves and their organizations. Additionally, Collins repeatedly emphasizes that the book’s principles are based strictly on empirical evidence, the details of which are meticulously outlined in the book’s appendices. By showing readers exactly how he and his team discovered their good-to-great concepts, Collins demystifies these concepts and invites readers to view transformation as a rational, logical process based on data that anyone can access.
The book’s findings also de-emphasize the role of nebulous concepts such as luck, charisma, and timing. Readers may not be able to make themselves lucky or charismatic, but according to Collins, that’s no problem; none of those factors is necessary to transition from goodness to greatness. By making a direct comparison between each good-to-great company to a less successful competitor in the same industry, Collins’s research also effectively controls for the possibility that successful companies only come from successful industries. Rather, the research demonstrates that successful companies can come from average or even poorly performing industries. This fact reinforces the theme that good individual choices can overpower bad circumstances, no matter the situation. In the chapter discussing effective leadership, Collins notes that great leaders (which he terms Level 5 Leaders) attribute positive outcomes to luck, while less successful leaders blame negative outcomes on luck. By drawing this comparison, Collins shows that luck is not an absolute phenomenon, but rather a subjective idea that can be used in more and less effective ways. Essentially, Collins suggests that readers have the opportunity to choose whether or not they are lucky.
Technology in particular is often viewed as an incomprehensible, almost magical force that allows certain individuals and organizations to succeed more than others. However, even the book’s discussion of technological progress reinforces the theme that transformation is possible for anyone. Collins emphasizes that while new technology can be powerful, successful companies do not develop or use technology for its own sake. Rather, they view technology as a tool for achieving their unique goals and apply it only when doing so makes sense for their overall visions. By casting technology as a tool to be managed rather than an overwhelming advantage, Collins again places greatness back within the reach of ordinary readers. Additionally, Collins notes that “when used right, technology becomes an accelerator of momentum, not a creator of it.” In other words, technology is only truly helpful to companies that are already achieving success in other, less glamorous ways. Here and throughout, Collins returns to the idea that the simple steps outlined in his book are the most reliable ways to gain sustained success, thus empowering readers to believe in and pursue meaningful transformation in their own lives.
Related Themes from Other Texts
The Possibility of Transformation ThemeTracker
The Possibility of Transformation Quotes in Good to Great
The best answer I can give is that it was an iterative process of looping back and forth, developing ideas and testing them against the data, revising the ideas, building a framework, seeing it break under the weight of evidence, and rebuilding it yet again. That process was repeated over and over, until everything hung together in a coherent framework of concepts.
That good is the enemy of great is not just a business problem. It is a human problem. If we have cracked the code on the question of good to great, we should have something of value to any type of organization. Good schools might become great schools. Good newspapers might become great newspapers. Good churches might become great churches. Good government agencies might become great agencies. And good companies might become great companies. So, I invite you to join me on an intellectual adventure to discover what it takes to turn good into great.
The business media called the move stupid and Wall Street analysts downgraded the stock. Smith never wavered. Twenty-five years later, Kimberly-Clark owned Scott Paper outright and beat Procter & Gamble in six of eight product categories. In retirement, Smith reflected on his exceptional performance, saying simply, “I never stopped trying to become qualified for the job.”
Level 5 Leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.
Maxwell made it absolutely clear that there would only be seats for A players who were going to put forth an A+ effort, and if you weren’t up for it, you had better get off the bus, and get off now. One executive who had just uprooted his life and career to join Fannie Mae came to Maxwell and said, “I listened to you very carefully, and I don’t want to do this.” He left and went back to where he came from. In all, fourteen of twenty-six executives left the company, replaced by some of the best, smartest, and hardest-working executives in the entire world of finance.
If you have the right executives on the bus, they will do everything in their power to build a great company, not because of what they will “get” for it, but because they simply cannot imagine settling for anything less. Their moral code requires excellence for its own sake, and you’re no more likely to change that with a compensation package than you’re likely to affect whether they breathe. The good-to-great companies understood a simple truth: The right people will do the right things and deliver the best results they’re capable of, regardless of the incentive system.
Members of the good-to-great teams tended to become and remain friends for life. In many cases, they are still in close contact with each other years or decades after working together. It was striking to hear them talk about the transition era, for no matter how dark the days or how big the tasks, these people had fun! They enjoyed each other’s company and actually looked forward to meetings. A number of the executives characterized their years on the good-to-great teams as the high point of their lives. Their experiences went beyond just mutual respect (which they certainly had), to lasting comradeship.
The moment a leader allows himself to become the primary reality people worry about, rather then reality being the primary reality, you have a recipe for mediocrity, or worse. This is one of the key reasons why less charismatic leaders often produce better long-term results than their more charismatic counterparts.
Putting aside their egos, the Wells Fargo team pulled the plug on the vast majority of its international operations, accepting the truth that it could not be better than Citicorp in global banking. Wells Fargo then turned its attention to what it could be the best in the world at: running a bank like a business, with a focus on the western United States. That’s it. That was the essence of the Hedgehog Concept that turned Wells Fargo from a mediocre Citicorp wanna-be to one of the best-performing banks in the world.
It may seem odd to talk about something as soft and fuzzy as “passion” as an integral part of a strategic framework. But throughout the good-to-great companies, passion became a key part of the Hedgehog Concept. You can’t manufacture passion or “motivate” people to feel passionate. You can only discover what ignites your passion and the passions of those around you.
Does every organization have a Hedgehog Concept to discover? What if you wake up, look around with brutal honesty, and conclude: “We’re not the best at anything, and we never have been.” Therein lies one of the most exciting aspects of the entire study. In the majority of cases, the good-to-great companies were not the best in the world at anything and showed no prospects of becoming so. Infused with the Stockdale Paradox … every good-to-great company, no matter how awful at the start of the process, prevailed in its search for a Hedgehog Concept.
Inequality still runs rampant in most business corporations. I’m referring now to the hierarchical inequality which legitimizes and institutionalizes the principle of “We” vs. “They.” … The people at the top of the corporate hierarchy grant themselves privilege after privilege, flaunt those privileges before the men and women who do the real work, then wonder why employees are unmoved by management’s invocations to cut costs and boost profitability … When I think of the millions of dollars spent by people at the top of the management hierarchy on efforts to motivate people who are continually put down by that hierarchy, I can only shake my head in wonder.
Walgreens didn’t adopt all of this advanced technology just for the sake of advanced technology or in fearful reaction to falling behind. No, it used technology as a tool to accelerate momentum after hitting breakthrough, and tied technology directly to its Hedgehog Concept of convenient drugstores increasing profit per customer visit.
Indeed, the big point of this chapter is not about technology per se. No technology, no matter how amazing—not computers, not telecommunications, not robotics, not the Internet—can by itself ignite a shift from good to great.
Although it may have looked like a single-stroke breakthrough to those peering in from the outside, it was anything but that to the people experiencing the transformation from within. Rather, it was a quiet, deliberate process of figuring out what needed to be done to create the best future results and then simply taking those steps, one after the other, turn by turn of the flywheel. After pushing on that flywheel in a consistent direction over an extended period of time, they’d inevitably hit a point of breakthrough.
The point of this story is that these ideas work. When you apply them in any situation, they make your life and your experience better, while improving results. And along the way, you just might make what you’re building great. So, I ask again: If it’s no harder (given these ideas), the results better, and the process so much more fun—well, why wouldn’t you go for greatness?
Perhaps your quest to be part of building something great will not fall in your business life. But find it somewhere. If not in corporate life, then perhaps in making your church great. If not there, then perhaps a nonprofit, or a community organization, or a class you teach. Get involved in something that you care so much about that you want to make it the greatest it can possibly be, not because of what you will get, but just because it can be done.
