Good to Great by Jim C. Collins is a management classic that has sold over four million copies throughout the globe. Following on from his international best-seller Built to Last, Excellent to Great focuses on how middling and excellent businesses may achieve greater success.
Collins learnt how to run a great firm from some of the world’s most successful CEOs at McKinsey & Company and Hewlett-Packard. After returning to Stanford to teach and do research, Collins established a management research centre in Boulder, Colorado. He did so to further his research into why certain businesses succeed while others fail.
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Summary Good to Great
At the highest level of leadership
Every good-to-great organisation has a “level five leader.” By blending humility with professional persistence, this CEO is responsible for leaving a lasting legacy of excellence. Few leaders allow their egos to get in the way of achieving what is best for the company’s success. According to the research, 75% of the comparison businesses had weak successors who were either picked by weak successors or were set up for failure. Leaders at Level 5 are significantly more likely than their colleagues in comparable organisations to blame factors other than their performance for their company’s success or failure (when appropriate).
Figure out Who…then we must figure out What.
You won’t have to micromanage or push employees to do a good job if you hire the right individuals. To put it, even with the finest of company concepts, firms with failing staff will almost always fail. Excellent-to-great CEOs receive somewhat less money than their mediocre firm counterparts ten years after their company’s transition from good to outstanding. If you’re not sure, don’t hire; instead, keep looking. Choosing the wrong person to fill a job might end up costing a company more money in the long run than postponing the recruiting process and ultimately finding the right person. To make the most of the individuals you already have on board, allocate the best team members to the company’s most promising opportunities rather than its most urgent difficulties.
Examine the facts carefully, but don’t lose faith!
Good to Great also demonstrates that the good-to-great businesses’ success was based on a foundation of excellent decisions that were well-executed and stacked on top of one another. This was due in large part to the fact that these organisations were able to face the hard realities of their own limitations front on. You must be honest with yourself about how you’re doing if you want to be great, even if it’s difficult at the moment.
But how can a team remain motivated when presented with such dire news about the company’s current state? Collins’ four ideas for developing a “culture of truth” are as follows:
Instead of responding, start with a question. Asking questions is the most effective way to have a deeper understanding of the facts. Inquiring is also a technique of demonstrating that you’re willing to confess that you don’t know everything. Only in a safe environment can real-world problem resolution take place.
Rather than correcting, discussing and disputing. When the CEOs have already decided on a course of action, don’t have phoney meetings to give employees the appearance that they’ve all been heard; instead, let the team have a genuine conversation about the issues to produce better ideas.
Conduct autopsies without condemning oneself. As a consequence, a culture may develop in which the truth can be said freely without fear of penalties.
Set up a “red flag” system. In other words, it indicates that every employee in a corporation has the freedom to raise a “red flag” at any time without fear of reprisal.
When a company is ready to face reality at each point of its journey, it must do so while maintaining a strong belief in the company’s success. Even if conditions are desperate and reality is gloomy, the team can depend on this culture of devotion to pull the company through difficult times and expand from exceptional to great.
The Hedgehog’s Concept
Collins claims that hedgehogs are closely packed and consistent, while foxes are widespread, diffused, and inconsistent. These three criteria must be followed to progress from “excellent to great”: What you are capable of doing better than everyone else on the planet. They needed to be able to compress the world’s complexity into a single, unified image; they needed a single, overriding theme to guide their judgments.
One must break free from the chains of simple competence to attain greatness. A company may attain greatness regardless of the industry in which it operates. It is critical to building a strong engine based on a thorough grasp of their economic reality. Great companies don’t merely come up with an idea and then expect their staff to become excited about it. They use a more thoughtful approach instead. Instead, they start by pursuing just those objectives that excite and drive their team members.
A Well-Ordered Society
Many successful start-ups are stumbling due to rising demand. How can a company maintain its entrepreneurial spirit while avoiding growing too big and inefficient to run? Collins suggests a four-step plan for creating a work atmosphere that is orderly and orderly. Create a culture that emphasises personal accountability and self-determination.
Accelerators for technological progress
For large corporations, the dot.com boom and the advent of the personal computer were momentous technological advances. As a consequence, rather than panicking and opting to adapt for the sake of adaptation, they have chosen to think differently about technology. When a company is certain that technology will assist them in achieving its objectives, it will deploy it. In the world’s most successful companies, technology acts as a catalyst for growth.
The Flywheel and the Doom Loop
He contends that it is rather the outcome of a more natural, gradual growth. Collins claims that the delivery of results and continual improvement has extraordinary power. Your goals will take care of themselves as long as you keep feeding the flywheel by executing the aforementioned tasks. In comparison, comparative firms often engage in “the dread cycle.” These comparison firms were notorious for looking for the “miracle moment” that would be the only reason for the company’s change. Before a sustained breakthrough may occur, a long period of preparation is required.
Buildings that will stand the test of time
Following up on his best-seller Built to Last, Collins’ second best-seller, Good to Successful, continues his investigation of how to build a successful firm from the ground up. When it comes to the flywheel, Good to Great is all about getting it started and keeping it running. The key to establishing a lasting legacy is to build a company that can withstand several product life cycles and leadership changes. If you want to develop a long-lasting company, you’ll need a set of core principles and a mission statement that go beyond making money. Maintain the core while encouraging growth – While retaining a focus on the organization’s most vital components, it’s critical to provide room for new ideas and methods.
Great businesses may be developed just as readily as good ones. A lot of the time and work that goes into starting and growing a successful company is wasted.