The Challenge
Built to Last, the defining management study of the nineties, showed
how great companies triumph over time and how long-term sustained
performance can be engineered into the DNA of an enterprise from the
very beginning.
But what about the company that is not born with great DNA? How can good
companies, mediocre companies, even bad companies achieve enduring
greatness?
The Study
For years, this question preyed on the mind of Jim Collins. Are there
companies that defy gravity and convert long-term mediocrity or worse
into long-term superiority? And if so, what are the universal
distinguishing characteristics that cause a company to go from good to
great?
The Standards
Using tough benchmarks, Collins and his research team identified a set
of elite companies that made the leap to great results and sustained
those results for at least fifteen years. How great? After the leap, the
good-to-great companies generated cumulative stock returns that beat the
general stock market by an average of seven times in fifteen years,
better than twice the results delivered by a composite index of the
world's greatest companies, including Coca-Cola, Intel, General
Electric, and Merck.
**The Comparisons
**The research team contrasted the good-to-great companies with a
carefully selected set of comparison companies that failed to make the
leap from good to great. What was different? Why did one set of
companies become truly great performers while the other set remained
only good?
Over five years, the team analyzed the histories of all twenty-eight
companies in the study. After sifting through mountains of data and
thousands of pages of interviews, Collins and his crew discovered the
key determinants of greatness -- why some companies make the leap and
others don't.
The Findings
The findings of the Good to Great study will surprise many readers and
shed light on virtually every area of management strategy and practice.
The findings include:
- Level 5 Leaders: The research team was shocked to discover the
type of leadership required to achieve greatness.
- The Hedgehog Concept (Simplicity within the Three Circles): To go
from good to great requires transcending the curse of competence.
- A Culture of Discipline: When you combine a culture of discipline
with an ethic of entrepreneurship, you get the magical alchemy of
great results. Technology Accelerators: Good-to-great companies think
differently about the role of technology.
- The Flywheel and the Doom Loop: Those who launch radical change
programs and wrenching restructurings will almost certainly fail to
make the leap.
"Some of the key concepts discerned in the study," comments Jim Collins,
"fly in the face of our modern business culture and will, quite frankly,
upset some people."
Perhaps, but who can afford to ignore these findings?
