Rating: 
Summary: Rare Pathways to Exceptionally Increased Prosperity
Review: This study was stimulated by Mr. Bill Meehan's (head of McKinsey in San Francisco) observation that Built to Last wasn't very helpful to companies, because the firms studied had always been great. Most companies have been good, and never great. What should these firms do? Jim Collins and his team have done an enormous amount of interesting work to determine whether a good company can be come a great company, and how. The answer to the former question is "yes," assuming that the 11 of 1435 Fortune 500 companies did not make it there by accident. The answer to the latter is less clear. The study group identified a number of characteristics that their 11 companies had in common, which were much less frequently present in comparison companies. However, the study inexplicably fails to look at these same characteristics to see how often they succeed in the general population of companies. If these characteristics work 100 percent of the time, you really have something. If they work 5 percent of the time, then not too much is proven. How were the 11 study companies selected? The criteria take pages to explain in an appendix. Let me simplify by saying that their stock price growth had to be in a range from somewhat lower than to not much higher than the market averages for 15 years. Then, in the next 15 years the stocks had to soar versus the market averages and comparison companies while remaining independent. That's hard to do. The selected companies are Abbott Laboratories, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreen, and Wells Fargo. As to the "how," attention was focused on what happened before and during the transition from average performance to high performance. Interviews, quantitative analyses, and business press reports were studied. Clearly, there's a tendency to see things a little bit with 20-20 hindsight in such a situation. Since this study started in 1996, it was dealing with facts that were already quite old while they were being examined. Bias is likely. The key conclusions as to "how" included the following: (1) a series of CEOs (promoted from within) who combined "personal humility and professional will" focused on making a great company; (2) an initial focus on eliminating weak people, adding top performing ones, and establishing a culture of top talent putting out extraordinary effort; (3) then shifting attention to staring at and thinking unceasingly about the hardest facts about the company's situation; (4) using facts to develop a simple concept that is iteratively reconsidered to focus action on improving performance; (5) establishing and maintaining a corporate culture of discipline built around commitments, with freedom about how to meet those promises; (6) using technology to accelerate progress when it fits the company's concept of what it wants to become; and (7) the company builds momentum from consistent efforts behind its concept that are reinforced by success. Then, a connection is made to how these 7 conditions can provide the foundation for establishing a Built to Last type of company that can outperform the competition over many decades. One potential criticism of the study is that its conclusions could be dated. Former Stanford professor Collins argues that he has uncovered basic facts about human organizations that will be unchanging. I compared the conclusions in this book with my own studies of top performing CEOs and companies in the 1988-2001 time period. I noticed two major differences that suggest a shift in "best practice" standards. First, those who outperform now have developed processes that create major improvements in their operating business models every 2-5 years. Second, senior management development is focused around improving a culture for defining and implementing such improvements. I suspect that item (4) above was an embryonic predecessor to these new dimensions, which occur much more frequently now than in this study. Next, I compared the list of 7 items to what I had observed in companies. The biggest point that hit me is how few CEOs have been interested in creating long-term outperformance that lasts past their own tenure in an industry. You also have to be a CEO for a long time with that focus before you have a chance to make a lasting impact. Founders have a special advantage here. Perpetuating outperformance may help fill a psychological need for immortality that fits with founders especially well. Finally, I thought about what I knew about the companies studied from personal contacts during the study years. My sense is that their stories are far more complex than is captured here. So, I think the data have probably been "scrunched" to fit together in some cases. In particular, I wonder whether these companies will greatly outperform in the next 15 years. In many cases, they expanded to meet an unfilled need that is now largely fulfilled. Can they develop a new concept for (4) that will carry them forward as successfully in the future? My guess is that most will not. If that turns out to be the case, we must conclude that the items on this list may be necessary . . . but may not be sufficient to go permanently from good to great. Time will tell. Before closing, let me observe that if the research team had also looked at the rate by which their principles succeeded among companies that employed them, this would have been one of the very finest research studies on best practices that I have seen. A book like this will provoke much discussion and thought for years to come. Perhaps that information can be included in a future edition or printing. Then, we will have something magnificent to consider! Do you want to be the best permanently? Why? Or, why not? Mr. Collins points out that it probably takes no more effort, but a lot more discipline and focus.
Rating: 
Summary: Beyond hero worship
Review: Possibly the best business book I've ever read, or at least the best that wasn't a journalistic narrative or a history. Most business "advice" books really just amount to hero worship (how to be like Jack Welch, or whoever), and Good to Great is a strong antidote to all that rot. While we gravitate toward big personalities and dramatic stories, the real roots of greatness like elsewhere -- the CEO names in Good to Great won't be familiar to most readers, but their successes are real, and Collins and his team do a nice job of extracting meaning from the data they've assembled. One among many surprising conclusions is that charismatic leaders might actually be a *detriment* to their firms. Then again, after Ebbers, Skilling, and others, maybe we won't find that news so surprising any more... Anyway, the book is clearly written and thoughtfully organized, and well worth reading if you're interested, for whatever reason, in what makes some companies thrive and others fail. A wise book.
Rating: 
Summary: Thought provoking, but with some big assumptions
Review: Collins does a great job of displaying the direct results of leadership decisions and character on big business. The book is insightful and well written. There are several assumptions however, for instance: that the reader's desire is to build a big business like Nucor or Walgreens. The book also assumes that the corporate climate of the last 50 or so years will continue into the future. The basic premise of the book seems to be passionate non-diversification. I think this book is helpful but should be balanced with a counter-perspective such as Tom Peters' "Re-imagine." The right answer is likely a little of both.
There is also somewhat of a disconnect (particularly in the audio version of the book) between Collins' dedication to empirical evidence and his passionate presentation of the results as being right. The results of what caused these 11 companies to meet Collins' standards are presented as universally correct with almost moral absolution. This makes it seem less scientific than it claims to be.
Rating:
Summary: Study on Critical Factors for Organisational Greatness
Review: Collins' curiosity and clear study brings to light some of those factors that contribute to greatness. These findings are grounded within individual, teachable 'points of view' which are easily applied to large organisations and applicable to small busness as well.
Collins puts his findings in clear accessable language. Including the finding that is responsible for the title... That good is the enemy of great.
I highly recommend this book/CD to leaders that are enaged with designing futures and those that work with them. It is core reading for key teams. It has made a significant difference in being able to articulate powerful conversations with teams about that which is tacit and critical to success. Giving common language and principles to engage with. A great study book for learning teams.
Rating:
Summary: Absolutely Wonderful!!
Review: This is a great book. If you are interested in reading about companies who were able to break away from medicority, become great, and sustain it- then this book is for you. You will be hard pressed to find a better text to derive some new and stronger principles for success.
You will find that this book is written in clear and direct writing styles, often using diagrams and charts to simplify the message. Because of the research and presentation, this book is certainly a page turner! It is also full of detailed examples and "revelations" which cause the reader to be inspired and excited about what the author is speaking about.
It is apperant that a great amount of research attended this book and plenty of footnotes and endnotes make the research accesible and believable. The foundations of this work are as solid as its message.
I would recommend this book to anyone who believes in business patterns (i.e. patterns for success) and the possibility of growth from such patterns. It is an out-of-the-box business approach with shocking insights discovered nearly every other page. It is motivational and exciting. It is a must read.
Throughout the text you will read about the "uncovered" and shared patterns that accompany the example companies who sustained an amazing market change. You will read about the things they all share in common and what they did differently from those who failed. It is logical and well supported.
I trust what I read and benefited greatly from reading this text... and I am not a business person in the least.
Rating:
Summary: Well Worth the Time
Review: While some may say that the Collin's Team has rediscovered the obvious, I don't agree. This is a very readable book and it reinforces solid concepts about the need for focus, clarity, persistence and principled leadership.
Rating:
Summary: It will change the way you do business
Review: I'm not sure why everyone feels the need to write a 12 page review of this book. It's pretty simple: If you are serious about rising through the ranks of capital achievement...then go buy this book. It might just change the way you do business.
Rating:
Summary: Required Reading for New business owners
Review: I know a few business owners who desperately need this book. Collins points out what should be common sense but isn't: the key to corporate success is discipline. A company needs to take control of itself, its employees, and its resources and get everything moving in the same direction. Collins and his team engaged in an incredible amount of research, and manage to lay out the results in clear and concise dialogue. Instead of being full of catch phrases and feel good mantras like so many other so-called success books, Good to Great actually provides real information and practically step by step instructions on getting your company on track in a positive way.
Rating:
Summary: A "pretty good" book
Review: The author's thesis is that he knows how companies make the leap from "good" to "great," and that he learned the principles by studying the statistical differences between companies that made the jump, and those that didn't.
He begins by explaining his ability to "take a lump of unorganized information, see patterns, and extract order from the mess - to go from chaos to concept." [page 11]. Collin's comment reminded me of another author, who wrote: "Human nature abhors a lack of predictability and the absence of meaning. As a consequence, we tend to "see" order where there is none, and we spot meaningful patterns where only the vagaries of chance are operating." ["How we know what isn't so," Gilovich, page 9].
While agreeing with many of his conclusions, this book lacks the statistical rigor the author ascribes to it. The principal error involves confusion between causality and correlation. Collins notes William P. Briggs' calculation that the probability of correlation by random chance is less than 1 in 17 million [211-212]. The calculation, while mathematically correct, is largely irrelevant because correlation does not mean "caused by." As an example, consider race cars which are highly correlated with advertiser's logos, although causality is clearly lacking because adding or stripping off logos won't suddenly make the cars go faster or slower.
To strengthen his argument Collins should have specifically and methodologically examined the changes that happen to companies that go "from great to good." There are plenty of examples, including many of the "good-to-great" companies in Jim's data base. Unfortunately, the study does this only sporadically and inconsistently, and as more of a sideline. Compounding the problem is the fact that the author's statistical database applies only to major US companies (something he notes), though he tries to apply the "concepts" derived from these correlations to just about everything - including high school track teams and landlords.
In spite of some of the methodological errors in his approach, I remain impressed by the extent to which Collins collected large amounts of data, and the way he defined the most important terms that he uses. It's true that he has a talent for finding "patterns," but I found myself mostly agreeing with his conclusions, even if I don't share his enthusiasm for the supposed rigidity with which they were drawn. In spite of the limitations of his work, Collins' book has a degree of rigor that's seldom approached by the plethora of evangelizing "management" and "leadership" tracts on the market.
According to Collins, a "good" company has cumulative total stock returns no better than 1.25 times the general market for at least 15 years, while a great company is one that beats the general market by 3 times for at least 15 years. His selection criteria and method of ranking companies is relatively robust. Some of the ranking methods are obviously more quantitative than others. There is, for example, poor correlation between company performance and executive pay, employee layoffs, and corporate restructuring/acquisitions.
The author draws some of his broadest conclusions from his most qualitative concepts. For example, he defines the Hedgehog Concept as "... an understanding of what you can be the best at [in the whole world]." That's a pretty fuzzy definition, and is ultimately unverifiable. As a result, the author gets involved in several ad hoc arguments. For example, on page 99 he berates Upjohn by saying:
"Upjohn never confronted the same brutal reality [that it could not compete with an industry behemoth] and continued to live with the delusion that it could beat Merck." [page 99].
Yet he lauds Darwin Smith for making a similar gamble, in positioning Kimberly-Clark in competition with Procter & Gamble:
"But they reasoned, if Kimberly-Clark thrust itself into the fire of the consumer paper-products industry, world-class competition like Procter & Gamble would force it to achieve greatness or perish." [page 20].
The difference between a great Hedgehog Concept and a bad one, apparently, is that the great one works and the others don't. But with history as our guide there's no end to playing the role of Monday-morning quarter back.
Part of the Hedgehog concept is tight focus. But when faced with contrary evidence in the form of G.E., which has lots of conglomerates, the author tries to force the contrary data into his world view by arguing that GE's Hedgehog Concept is to have lots of good managers so they can manage various divisions. There's never a coherent, global definition of what constitutes a Hedgehog Concept; it's largely tautological reasoning that establishes "great" Hedgehog Concepts as those used by "great" companies.
I must temper that complaint by saying that, in spite of the less-than-rigorous nature of this book, most of what Jim says makes sense to me. This was a most enjoyable book to read, and I've filled the margins (top, sides, and bottom) with notes and scribbles. In particular, he gives a nicely balanced view of leadership, cutting through the baloney that's so often the core competency of people who try to write books on the subject. Here's a typical quotation:
"George Ruthmann ... understood that the purpose of bureaucracy is to compensate for incompetence and lack of discipline...Most companies build their bureaucratic rules to manage the small percentage of wrong people on the bus, which in turn drives away 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 so forth." [page 121]
Overall, I gave this book a high rating because it made me think. The author has obviously spent an enormous amount of time doing research, and the book really is pretty good. The high points certainly outweigh the problems, and I highly recommend it - especially the lengthy appendices.
Rating:
Summary: Why are great companies better than mediocre?
Review: Good to Great provies a compelling argument as to why some companies rise above mediocrity. The book is filled with cases studies and is based on Gallup Poll research. The right leaders, acting in a disciplined manner, attract the right people to differentiate themselves in the marketplace. These level 5 leaders use optimal thinking and ask, "What can we be best at in the world?" I believe this book should be in every business school along with Optimal Thinking by Dr. Rosalene Glickman, to teach executives how to consistently optimize their thinking and performance.
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