Shop now Shop now Shop now See more Shop all Amazon Fashion Cloud Drive Photos Shop now Learn More Shop now DIYED Shop now Shop Fire Shop Kindle Shop now Shop now
Customer Review

146 of 154 people found the following review helpful
5.0 out of 5 stars Achieving and continuing spectacular business success, 3 July 2002
This review is from: Good To Great (Hardcover)
In 1994, Jim Collins and Jerry Porras wrote one of the most successful management books of the last decade: Built to Last. Collins and Porras had studied 18 visionairy companies, many of which had existed for 60 years or more. These companies had a strong focus on values and people and great ability to to learn and exchange knowledge. They gave less priority to maximalizing shareholder value but paradoxically outperformed the market enormously. In a conversation with Jim Collins, McKinsey director Bill Meehan said he, too, loved the book, but added: "Unfortunately, it's useless". He explained why. The companies featured in Built to Last had always been great companies. But because most companies are just good (not great) they are not interested in a book which shows how to stay great (Built to Last) but in a book that shows how to become great. The matter inspired Collins. He built a research team of 15 people and started a 5 year study.
The team tried to identify companies that had jumped from good to great and had managed to continue their great growth for at least 15 years. They found 11 of these (Abbott, Circuit City, Fannie Mae, Gilette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, Wells Fargo). These good-to-great companies (GTG's) outperformed the market by a factor 6.9 in the 15 year period of the analysis! (General Electric outperformed the market 'only' by a factor 2.8 between 1985 and 2000).
The study focused on the question: what did the GTG's have in common that distinguished them from comparable companies in comparable circumstances? The GTG's were compared with two sets of other companies: 1) the direct-comparisons: companies within the same sector and in comparable circumstances, 2) the unsustained comparisons: companies that had had a breakthrough but that had not been able to continue their success. Collins intended to, from the ground up, build a theory which could explain the successful transformation of the GTG's.
As it turned out, all of the GTG's had a period of build up, preparation (often lasting many years) before the breakthrough moment. Three phases could be identified:
PHASE 1: DISCIPLINED PEOPLE
1. LEVEL 5 LEADERSHIP: contrary to the expectation, leaders of the GTG's turned out to be quiet, self effacing and even shy. At the same time, however, they were very determined. Mostly, they were leaders that came from within the company and that have remained unknown to the greater public.
2. FIRST WHO...THEN WHAT: also contrary to what you might expect was that GTG's first got the right people on the bus and the wrong people off and only then focused on strategic direction and vision.
PHASE 2: DISCIPLINED THOUGHT
3. CONFRONT THE BRUTAL FACTS (..BUT NEVER LOSE HOPE). Characteristic was a combination of realism and hope.
4. THE HEDGEHOG CONCEPT (SIMPLICITY IN THREE CIRCLES): just like a hedgehog, the GTG's seemed to have a very simple but effective success formula: all of the activities of the company had to lie within the intersection of the following three circles: 1) what can we become best in the world at? 2) what are we passionate about? 3) what can we make money with?
PHASE 3: DISCIPLINED ACTION
5. CULTURE OF DISCIPLINE: the GTG's turned out to have a culture of discipline that made hierarchy and bureaucracy largely superfluous.
6. TECHNOLOGY ACCELERATORS: none of the GTG's had technology as a cause of the success, but technology did play the role of accelerator of the success.
Collins rather convincingly demonstrates the validity of this model. All of the GTG's showed these practices throughout the 15 year period, while none of the direct comparisons did. The unsustained comparisons showed some of these practises often right until the moment of their decline.
Looking at the share price development of the GTG's, you might expect that there has been a clear marking point of the transformation because their share price stays rather flat at first (for many years) and then just suddenly takes off and keeps on going up. An important finding of the team was, however, that there were nó special change programs, and nó breakthrough decisions or products. On the contrary, the process evolved very fluently. To eplain, Collins uses the metaphor of the flying wheel. When you start to turn this wheel it goes heavily and moves slowly. But by continuously keeping on turning the wheel, it starts to build momentum and then, just suddenly, a point is reached at which the wheel turns at great speed without you having to turn it any harder than at first. Is this the practice of many companies? Not at all! The reality of many companies is nót consistently following a chosen path but rather swinging from one hype to another.
I think this research evokes one principal issue. That the concept 'great' is operationalized in a financial way is easily understood from a practical standpoint. This criterion is clear and rather easily obtained and makes it easy to compare the companies scientifically. But is 'great' the best word to describe spectacular financial success? Does their financial success necessarily make GTG's 'great'? Wouldn't that be like saying that Bill Gates en Silvio Berlusconi are great people while implying Martin Luther King and Mother Theresa are not?
But, having said that, demonstrating how companies achieve and continue spectacular financial success, in itself, is extremely interesting and valuable. This is a terrific book that, I think, has the quality to equal or perhaps even surpass the success of Built to Last. Unlike most management books (which contain creative but highly speculative ideas), the message of this book is based on well-designed research and mindful interpretation of results that is explained and justified terrifically. Despite this thoroughness, the book remains a pleasant read. A pity that the book does not offer some more practical suggestions to help readers get started. I think that would have made it even better.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No

Be the first person to comment on this review.

[Add comment]
Post a comment
To insert a product link use the format: [[ASIN:ASIN product-title]] (What's this?)
Amazon will display this name with all your submissions, including reviews and discussion posts. (Learn more)
Name:
Badge:
This badge will be assigned to you and will appear along with your name.
There was an error. Please try again.
Please see the full guidelines ">here.

Official Comment

As a representative of this product you can post one Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
The following name and badge will be shown with this comment:
 (edit name)
After clicking on the Post button you will be asked to create your public name, which will be shown with all your contributions.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.  Learn more
Otherwise, you can still post a regular comment on this review.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
 
System timed out

We were unable to verify whether you represent the product. Please try again later, or retry now. Otherwise you can post a regular comment.

Since you previously posted an Official Comment, this comment will appear in the comment section below. You also have the option to edit your Official Comment.   Learn more
The maximum number of Official Comments have been posted. This comment will appear in the comment section below.   Learn more
Prompts for sign-in
  [Cancel]


Review Details

Item

Reviewer


Location: Driebergen Netherlands

Top Reviewer Ranking: 1,714,051