Jim Collins: Good-to-Great

This begins an 8-part review of Jim Collins roles of leadership to go from Good to Great


Many of you must fill leadership roles as you develop your career. So, we will analyze the literature on leadership. In a previous post we reviewed what Jim Collins calls Level 5 Leadership. That chapter outlined the traits of great leadership. Today we begin a review of the roles of leadership Collins found in his research for the book Good to Great.

I review the concepts found in Good-to-Great to help you understand the culture of great companies for those of you who

1. Find yourself leading and want to exert great leadership
2. Work for companies that could become great
3. Yearn to find a great company that will appreciate your efforts

How Collins Identified Traits of Good-to-Great Companies
Let me restate how Collins and his team found the traits. They reviewed the financial records of companies that appeared on the Fortune 500 list between 1965-1995. Collins writes they were “looking for companies that showed the following basic pattern: fifteen-year cumulative stock returns at or below the general stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years. We picked fifteen years because it would transcend one-hit wonders and lucky breaks.”
From the research, Collins found 11 companies that met the criteria. He compared those companies with two types of companies. What he called:

• Direct comparisons: “companies that were in the same industry as the good-to-great companies with the same opportunities and similar resources at the time of transition, but that showed no leap from good to great.
• Unsustained comparisons: companies that made a short-term shift from good to great but failed to maintain the trajectory—to address the questions of sustainability.”

Then, his group asked questions to identify what happened “in the black box” (the point of transition and beyond). They compared the data to identify common traits shared by all the good-to-great companies and lacking from the comparisons.

Traits of Good Companies that Became Great

Collins team found the great companies shared the following characteristic:

1. Good is the Enemy of Great
2. Level 5 Leadership
3. First Who…Then What
4. Confront the Brutal Facts (Yet Never Lose Faith)
5. The Hedgehog Concept (Simplicity within Three Circles)
6. A Culture of Discipline
7. Technology Accelerators
8. The Flywheel and the Doom Loop

He closed the book by describing how companies go from good-to-great to built-to-last (another of his books). The last chapter proved almost prophetic. Several of Collins great companies failed miserably during the economic downturn (particularly Circuit City that closed and Fannie Mae that the government took over). His curiosity led him to examine what happened. Then he wrote about it in How the Mighty Fall.

I hope you enjoy our review of Jim Collins findings. As always, I strongly encourage you to purchase Good-to-Great and read it several times. I thoroughly enjoyed the book. Applying it to my work improved our productivity, satisfaction, and passion for what we do. I firmly believe that you will find the same motivations. I know that it will improve your career.


So do not miss Wednesday’s blog when we begin our review with First Who…Then What