Good to Great: Why Some Companies Make the Leap... and Others Don’t ‘Good things take time, but great things happen all at once.’ – Rat Race.
Jim Collins counters criticisms on Built to Last with Good to Great, by unfolding sought-after information on how to turn a company into a great one. ‘Good to Great: Why Some Companies Make the Leap…and Others Don’t’ written by Jim Collins in 2001 is the outcome of a rather ambitious research project. Collins and his team studied 11 companies, chosen out of 1,435 companies, which were able to transform themselves from ‘good’ companies to ‘great’ companies. These 11 companies were included based on at least 15 years of advanced performance. The research demonstrates the course of action that ‘good’ companies take on their journey to becoming ‘great’.
Jim Collins began his research as a Stanford Graduate School of Business faculty member. At Stanford University, Collins has degrees in mathematics and business administration, as well as degrees from the University of Colorado and the Peter F. Drucker Graduate School of Management at Claremont Graduate University. In 1995, he founded a management laboratory in Boulder, Colorado where he continues to perform research and discuss his findings with executives from social and corporate areas. Collins has worked with CEOs in several companies and social sector organizations. He is the author and co-author of five books that revolve around his research including Built to Last, with Jerry I. Porras, which covers visionary companies in their battle against the challenges of time. Collins describes Good to Great as the prequel to Built to Last, as he claims it reveals how a company can leap to greatness and maintain that status.
Firstly, Collins defines creating a great company as having a great leader, which he calls Level 5 Leaders. Subsequently, the author reveals that companies can direct themselves towards the Flywheel and evade the Doom Loop by simply tracking a combined idea called the Hedgehog Concept. Furthermore, Collins outlines that the foundation of a successful transition to greatness comes down to discipline. How a company responds to developments in technological advances in the industry can determine how well it would be able to maintain itself as a great company just as well as the aforementioned findings. Collectively, Collins successfully gives readers an insight on this transition to demonstrate the simplicity of his concepts.
Companies may appear to leap into success, perhaps by recruiting a new, high-salary CEO. However, this represents mediocre companies, according to Collins. Although the success of a company may seem to have happened within a short period of time, this ‘leap’ will have only occurred after a significant number of years, which Collins refers to as ‘pushing against the flywheel’.
To begin with, Collins was not interested in studying leadership. With the aim of derailing from the typical ‘great leader’ complex of several businesses, wherein bringing a dynamic leader will lead to success, he in fact discovered that leadership is chief. However, it is the specific type of leader that yields specific results. According to Collins, most leaders have the ability to create successful companies, but only Level 5 Leaders have the ability to create great companies, because of a surprising blend of reservation and reticence that fall under humility, ‘more like Lincoln and Socrates than Patton or Caesar,’ (Collins, 2001, p. 13). Level 5 Leaders do not possess an overt sense of ambition, as they direct their purpose to ensuring long-term success for the company. ‘Their ambition is first and foremost for the institution, not themselves,’ (Collins, 2001, p. 21). Such leaders are more inclined to discuss other people’s contribution to the company’s achievements than to flaunt their own success. Collins explains that Level 5 Leaders who sustain this quality of humility will lead their company to greatness, because they prioritize their firm and makes certain that succeeding executives are likely to be as effective as them. On the other hand, leaders who are in it for themselves want their own, personal records to stand out, while Level 5 Leaders are in it for the future achievements of the company. Level 5 Leaders willingly keep a low profile, as ‘ordinary people quietly producing extraordinary results,’ (Collins, 2001, p. 28).
Collins illustrates this concept by weighing against lower level leaders to show what routes to avoid, in order to create a great company. For instance, despite the success of Henry Singleton of Teledyne’s company, he fell short of building a great company, as his sole concern was to exhibit his professional skills while disregarding the performance of the company was his time in power was over. As a result, Teledyne failed to sustain independence once Singleton was no longer CEO. We learn that Level 5 Leaders are leaders who display their ability to dedicate their efforts to the company are the ones who can turn a good company into a great one.
Collin’s fifth finding of the Flywheel and the Doom Loop links well with his second finding of the Hedgehog Concept. While several companies aim to be the best in as many ways as possible, Collins believes that simplicity is the key to achieving greatness. For example, Walgreens aimed to become ‘the best and most convenient drugstore,’ (Collins, 2001, p. 92). This concept was simple, which was crucial aspect in placing Walgreens on the Flywheel, while turning it into a great company. The author reveals how companies can plainly grow into great companies by focusing their efforts towards one clear idea, rather than spreading their resources too thin over numerous aspects. Collins uses Eckerd as a case to show that, without a unifying concept to direct them, the company would fall into the Doom Loop; they would never be able to pick up momentum. Eckerd would ‘compulsively...acquire clumps of stores...in a hodgepodge fashion, with no obvious unifying theme,’ (Collins, 2001, p. 93). As a result, we are effectively shown that a Hedgehog Concept is essential to make a company great.
While the simplicity of concepts corresponds with power and greatness, the basis of the transition to greatness focuses on three key factors of discipline. Collins breaks down the areas of discipline in terms of corporate success to eradicate the negative connotation of the term, interpreted as a form of punishment. The author refers to disciplined people as ‘the right people, [who] want to be part of building something great,’ (Collins, 2001, p. 59).
Firstly, disciplined people apply to leadership, as well as subordinate employees. The author maintains that every single company that has made the good-to-great leap included a leader that demonstrated a sense of humility, while striving to put the company ahead. Rather than concerning themselves with a comprehensive strategy for the company to follow as soon as possible, they focused on getting the right people on board. They ‘first got the right people on the bus, the wrong people off the bus... and then they figured out where to drive it,’ (Collins, 2001, p. 13).
Collins explains that, by getting the right people, the company can create an environment that cultivates creativity on its way to becoming great. This approach allows the company to collectively adapt to changes in strategy or direction from the very beginning. Since the employees aspire for greatness just as well as the executives do, there is less effort required to motivate them. In addition, great companies do not necessarily pay more than the merely good, as compensation is not a key aspect in encouraging employees when they are aiming for something bigger than monetary goals.
While the internal structure of a company can appear to fall under leadership styles, focused concepts and discipline, a defining factor that may direct its strength as a great company is how it responds to developments in external factors. In terms of technology, Collins discovers that it is a minor factor for executives to succeed in great companies. The case is not whether the technology will make or break the company, but rather, how the company uses it to advance further in their niche. Good companies may choose technology simply for the sake of technology itself, while great companies only invest in cutting edge methods if and when it would correlate to their overall objective. The efficient, wise use of technology is an integral part of the culture of great companies.
In his introduction, Jim Collins states that ‘the good is the enemy of the great’ (Collins, 2001, pg. 1), wherein at times, people become content at a fair level of good. These people believe that good is good enough, thus restraining themselves from putting in the effort to make the leap from good to great. Collins’ issue tackles the subject of being satisfied with anything less than superiority. However, as a company drives towards greatness, they will pass through a stage of being good. Furthermore, there may be a time when good is all that can be reached when action is required. Moreover, Good to Great rates companies as great based on stock performance. While a quantitative approach to measure greatness facilitates observations, there are other or more comprehensive methods to measure success that factor in various other, more qualitative details.
Good to Great gives an enjoyable insight on the gradual progress of a good company turning into a great company. The author’s evaluation of Level 5 Leaders effectively reveals certain qualities that successful leaders of great companies maintain, while the Hedgehog Concept exemplifies how a unified concept can lead an organization away from the Doom Loop and towards the Flywheel, while demonstrating the significance of simplicity.
Several business books analyze the history of success of failures of various companies. One of the key aspects of great companies that Collins identified as having a culture of discipline may have seemed to be old-fashioned. However, the firms that had indeed become great had done so through discovering their own distinctive strengths to further profit from them. Through this, Jim Collins answers questions that not only answer questions of people in the business sector, but of those who may apply these concepts to social work, their own companies, or even their personal lives. Good to Great is a useful companion which demonstrates that the major concepts and good to great thinking are evenly relevant to transform an organization.

Works Cited
Collins, Jim. Good to Great. N.p.: Harper Business, 2001. Print.