Transcription
Jim Collins's book *Good to Great* presents a very simple truth about success. He makes it vivid through graphs and detailed stories that exemplify what he wishes to tell his readers. His way of storytelling is rather surprising, especially coming from an academic, and especially with a book that was founded on gritty, cutting-edge research that took five whole years to finish.
Published in 2001, at the height of technological advancements in the business industry, *Good to Great* never ceases to amaze with its accurate description of what he calls level five leaders. It gives a refreshing perspective of how we look at technology, especially in the current technology-obsessed society. He divides the book into nine chapters, with each one bringing a valuable lesson for readers to digest.
Before finishing the book, *Good to Great* author Jim Collins went for a trip to the Eldorado Springs Canyon at the southern end of his hometown in Boulder, Colorado. It was a nice winter's day, and Collins wanted to see the landscape from the top, still covered in snow. During his time at the canyon, a question floated in his mind, asking how much anyone would pay him just to not publish the book. Collins considered this a thought experiment, since the book was already five years in the making, from early research to first drafts of the manuscript. As he thought about the amount, just to stop him from publishing the book, when he was already at $100 million, he headed back down. He told himself that no matter how much money anyone would offer, nothing could convince him to stop publishing. The reason behind this is because Collins is a teacher; thus, it became impossible to resist the urge of sharing what he knows is the truth about the world. This is the inspiration behind Jim Collins's book *Good to Great*. He ends the preface by telling readers to provide feedback and to let him know what works and what does not. He asks readers to use all the lessons from the book, if not to their work, then at least to their own life.
"Good is the enemy of the great." One of the first lessons Collins wanted to share in his book is the trap of a good performance. He considers doing good as a trap precisely because people, or companies for that matter, tend to lose the drive to do better once they reach an ideally good performance in the market. He begins with an anecdote back in 1996 when the idea of writing the book first came to mind. Bill Mian, managing director of McKinley and Company, gave a comment to Collins that sparked a fire in his mind. Mian commented on Collins's earlier published book, *Built to Last*, and told him how the book was meant for great companies and not really for the majority who only fare in the good side of the fence. This made Collins curious and he realized that Mian was right. The companies that studied and *Built to Last* were already doing great when they did their research. From then on, Collins began assembling his research team and came up with a *Good to Great* study, wherein they looked into companies that went from being good to being great in terms of market share.
Take, for instance, General Electric, which is considered one of the top companies in America. General Electric outpaced the market 2.8 times over the decade and a half from 1985 to 2000. According to Collins's study, if you invested a dollar in what he called good to great companies back in 1965, your dollar would have multiplied 471 times, or a total of 56-fold increase in market shares. He also shares the example of Walgreens, a good company that ascended to greatness. One sunny day in 1975, Walgreens just kept higher and higher in the stocks food chain to the point that it outpaced Intel, General Electric, and Coca-Cola. The perfect example of a good company turning great. But what's the secret? What made Walgreens so successful? Collins briefly pauses with suspense and does not reveal the answer until the next chapter. Nevertheless, he brings readers to his research journey in how they found out the secret from being good to being great.
Undaunted Curiosity
In this subsection, Collins presents his method, divided into four phases: Phase One: The Search; Phase Two: Compared to What?; Phase Three: Inside the Black Box; and Phase Four: Chaos to Concept.
In Phase One, Collins explains how he first assembled his team of researchers and searched for companies that performed on a pattern of being good to great. Rigorous financial analysis was conducted in a six-month period, searching for a 15-year pattern of cumulative stock increases. Collins elaborates that the team picked the 15-year pattern because it provides ample time to differentiate between one-hit wonder companies and companies that were truly able to transcend the good to great barrier.
In Phase Two, the research team assembled what was called a comparison company group, which was used to compare with the good to great companies. The question they were trying to answer here is what makes the difference between good to great companies and companies that are generally just good. There were two selections of comparison companies. The first set was a group of companies that had the same resources, capital, and opportunities compared to good to great companies. The second set was composed of companies that transcended the good to great barrier but failed to sustain its success shortly afterwards.
In Phase Three, Collins refers to what he calls the black box. In a quick visualization of his research design, the black box represents the transition from a company giving off good results to reaching great results. This phase of research involves interviews with key personalities within the good to great companies. The research team studied the focus of the interviews, looked into compensation, business strategies, office culture, leadership style, turnover rates, etc. This process became what the research team called the black box.
In Phase Four, Collins provides brief snapshots of all the nine chapters of this book. The chapters will describe in detail how to get going from good to great.
The Timeless Physics of Good to Great
Collins dedicates a sub-chapter that further clarifies what the book is about and what it is not. He emphasizes that the book is not about how the economy was or how it is not. Furthermore, the book is not even about how it will be in the future. Rather, he points out that the book is about the principles of how to get from being good to becoming great. He then goes back to his core thesis that resonates throughout the chapter: good performance is the trap that stops your journey to greatness.
Level Five Leadership
In the second chapter of Collins's book, he explains the first principle that can turn a good company into a great one. He exemplifies this point by telling the story of longtime CEO of Kimberly-Clark, Darwin E. Smith. Smith started as the company's lawyer, having had an arduous journey becoming a lawyer. He had an unorthodox way of leadership. He became CEO of Kimberly-Clark for 20 years and allowed the company to evolve and conquer the industry with fierce competition between big brands of paper-based consumer products, Procter & Gamble, and Scott Paper. Smith proved how he could lead the company out of even the toughest crisis. Smith was largely appreciated by business persons and thinkers alike for one of the boldest moves any CEO can make. The context: in a slowly dying industry, Kimberly-Clark needed to choose between sinking and depreciating market value or selling all the mills. Smith took a strong position to sell all the mills and instead invest the money to other potentially vulnerable products like Huggies. Business media called the move less than intelligent, but Smith never wavered. After a few years, Kimberly-Clark outpaced the growth of Procter & Gamble in six of eight products and was able to acquire Scott Paper. When described by close friends, Smith is portrayed as an awkward old man that also has a fearsome side to him. He didn't wear fancy clothes like other CEOs in the industry do; instead, he wore unfashionable and old suits, effectively sporting an eccentric fashion statement.
After telling the inspiring story of Smith, Collins moves on to the discussion of what he calls level five leadership. He illustrates this with a pyramid that is divided into five ladders. The bottom ladder, or level one leadership, pertains to highly capable individuals who make productive contributions through their talent, knowledge, skills, and good work habits. The second level of leadership is called contributing team member, referring to individuals with their propensity to contribute their capabilities to achieve the group's objectives; in essence, a good team worker. The third level is that of a competent manager, revolving around the skill to organize people and resources effectively towards the pursuit of the company's objectives. The fourth level of leadership in the pyramid pertains to an effective leader, one that catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards. Lastly, level five leadership refers to the executive, which can be determined by the character of building enduring greatness through a sometimes paradoxical blend of personal humility and strong professional will.
Not What We Expected
A subsection follows wherein Collins elaborates the character of Smith as a level five leader. He reiterates that the level five qualities Smith had were crucial requirements in getting a company from good to great. According to Collins's research team, level five leaders are almost always found at the top of the most successful companies, especially those that went through the process of being good to becoming great. Collins further states that level five leaders have the temperament to channel their personal needs, ego, towards a larger goal, such as raising a company to the top of its game. He adds that level five leaders do not just exemplify the qualities of a level five leader; moreover, it embodies all the qualities of the leader types in the whole pyramid. The chapter focuses on explaining the traits of level five leaders and how they bring companies to greatness. It wasn't the researchers' team's goal to look into executives or top echelons in corporate management. Collins points out rather, the research results indicated a pattern that a large part of the company's success in reaching greatness can actually be attributed to leadership styles, namely a level five leadership.
Humility Plus Will Equals Level Five
In the next sub-chapter, Collins adds another layer in explaining level five leadership. He says that level five leaders have a dual quality. Aside from being fearless, level five leaders are also known to possess humility. Collins gives the story of former U.S. President Abraham Lincoln, who also happens to be a level five leader, according to Collins. Lincoln never allowed his ego to get in the way of a nobler cause, which is the success of the entire country. A lot of people during Lincoln's time mistook his shyness and awkward demeanor as signs of weakness. However, Collins argues that this is simply part of Lincoln's duality as a level five leader. The same goes for other CEOs that the research team studied: having a dual character of shyness while being fearless at the same time, modest and meek in appearance, yet courageous and decisive in their business choices.
Ambition for the Company, Setting Up Successors for Success
Collins argues that one remarkable thing with any level five leader is that they always put ambition first before personal desires. Take, for example, David Maxwell, who became Fannie Mae's CEO in 1981. Before Maxwell came to office, Fannie Mae was hitting rock bottom, losing $1 million every single day. Maxwell saved the company from the brink of bankruptcy, and by the time he was about to retire, his retirement package was valued at a staggering $20 million, owing to how the company's profit skyrocketed since he became CEO. This became a huge issue in Congress because Fannie Mae operated under federal laws. However, instead of insisting to get his whole share of the pie, Maxwell proposed that he'd only claim $5 million from the entire retirement package and told his successor, Jim Johnson, to donate the remaining funds for low-income housing. This saved the future of the company from the brewing controversy of his retirement package. After retirement, Maxwell was given a number of awards, including 10 Greatest CEOs of All Time by *Fortune* Magazine and Housing Person of the Year Award by the National Housing Conference. The story of Maxwell exemplifies how a level five leader will always take the high ground and prioritize the company's ambition over their personal gains. Instead of fighting to have his rightful share of the retirement package, Maxwell considered the interest of the company in order to avoid greater controversy. He instructed Johnson to donate a huge chunk of his retirement money for housing funds. Maxwell also made a stroke of genius for choosing Jim Johnson as his successor.
Another trait of a level five leader, according to Collins, is a compelling modesty. Another trait discussed by Collins, still in the topic of level five leaders, is how good to great executives almost never talk about themselves. The difference is quite significant when this is compared to leaders from the comparison control group, who could talk about themselves and themselves only for hours on end. Collins emphasized that one of the secrets of level five leaders is modesty. To think not only of themselves but of the greater good of the company is what sets good to great leaders apart from one-hit wonders.
Unwavering Resolve to Do What Must Be Done
In addition to humility and modesty, Collins further notes that level five leadership is all about decisiveness. He describes this trait of level five leaders as the unwavering determination of leaders to do whatever needs to be done to reach greatness and bring the company to the peak of its performance. According to Collins's research team, level five leaders are endlessly motivated by their desire to produce results. They will do anything, from selling all the company's biggest assets just to save it from bankruptcy to firing their own brother from management, just to get the job done.
The Window and the Mirror
Top executives, when asked about their secret to success, would almost always answer that they were just lucky about a lot of things, which led to them being in their current state. This perplexed the research team and motivated them to dig deeper and find patterns as to why executives would always attribute success to good luck. The findings indicate that level five leaders, aka successful executives, would always make it a point to credit their success to other people outside themselves. When there was no specific person they could accredit it to, they would just mention that it was because of good luck. On the other side of the fence, when things went bad, level five leaders were quick to acknowledge that the errors were because of them. This is why the researchers called this phenomenon as the window and the mirror. In times of success, level five leaders give credit to other people but themselves; hence, the window. Nevertheless, in times of defeat and loss, leaders look at themselves to blame; hence, the mirror.
Cultivating Level Five Leadership
In this section, Collins starts with an example of a woman who had just become CEO of her company. While in a dinner meeting wherein Collins shared the results of his level five study, the woman asked if it was possible to learn how to be a level five leader. Collins's answer was to review the *Good to Great* principles they uncovered from level five leaders and try to practice it or self. In conclusion, Collins tells his readers that this chapter of the book shows why level five leaders are successful and what makes them good to great leaders and what principles do they live by. The next few chapters, on the other hand, will give readers an idea of how to become level five leaders.
First Who, Then What
Collins begins the third chapter of his book by telling readers how they expected a good to great company to behave. First off, they thought a great company would have to be driven to a new direction, setting a new path based on a new vision and a new strategy to bring the company to greatness. After years of research, the team found out that the truth is the complete opposite. Instead of knowing first where to go, the most successful executives' first priority was to select the right people to go with them.
According to Collins, good to great leaders knew of three simple truths:
1. Knowing who, rather than what or where, makes it easier for leaders to adapt based on the situation and change that situation for the better.
2. With the right people, equipped with the right skills and positioned in the right places, the problem of motivating staff to strive to be successful is eliminated.
3. Even if you do find the right direction to drive your company forward, you will never succeed without the right people.
Collins then provides an example in the form of Wells Fargo. Wells Fargo only experienced its stellar performance in this market starting in 1983. The change of the company's performance was not because CEO Dick Cooley knew where to bring the company; rather, it was because his first step was to assemble his management team. According to esteemed investor Warren Buffett, Cooley had a knack for talented people and made it a point to build the most talented management team in the industry. In short, Cooley's strategies for success were not to make their own strategy but to fill the company with so much talent that no matter where they went, the talent would always save them. Collins further reiterated that Cooley had an attitude of hiring talented people even when there was still no specific job available for them. This approach, pioneered by Cooley, proved to be a recipe for success. When challenges after challenges were faced by Wells Fargo in the most difficult times, the team always had a way to skirt out of dangerous situations, such as during the time when the banking industry fell 59% below the general stock market rates, Wells Fargo outpaced the market thrice.
Collins argues that the company is not simply about the old-fashioned tip of picking the right people because that would be a cliché, especially in management circles. He emphasized that the chapter is more about priorities: first, to assemble the right people for your team, and then figure out where to drive your company for the better.
Not a Genius with a Thousand Helpers
Collins then compared this example from Wells Fargo with the comparison control group and made the conclusion that good to great leaders never chose the management approach of having a genius with a thousand helpers. The problem with the approach of having only one genius is that while the genius would indeed help propel the company forward, the genius would only be able to do that as long as he or she was around. This kind of approach is never good for building a good management team. According to Collins, the kind of caliber managers turned CEOs of big companies produced by Wells Fargo was developed precisely because Cooley knew how to put people in their rightful places and how to develop them to become better leaders and pioneers in their respective fields. In short, Collins is telling us that a level five leader is simply not enough; a level five leader must also learn how to assemble what is called a level five management team, using the first who approach of determining the right people to complete the group.
It's Who You Pay, Not How You Pay Them
Another factor that the research team looked into was compensation. They tried to find a correlation between good to great companies and the approach of paying people with the right amount of money. Interestingly, research findings indicated otherwise. There was no such correlation, and instead, what the team found out was that executives from good to great companies received less compensation compared to the mediocre level companies. While Collins still emphasizes the value of ample compensation for executives, he reiterates that compensation is not the key to success. Collins proposes that the key in this subject area is not how much you compensate executives, but which executives need to be compensated in the first place. In essence, this points right back to the first who approach of selecting the right people to compose your management team, and in turn, the issue of an inexpensive incentive program becomes irrelevant. He further suggests that the point of an incentive system was not to reward the wrong behavior of people in the company but to keep the right people working for the company.
Rigorous, Not Ruthless
Collins starts with the typical stereotype of good to great companies: that they are the toughest places to work in. Collins points out that this might be true, but there's more than meets the eye. Instead of the ruthless portrayal of hyper-performing companies, Collins's team found out that good to great companies often fostered a rigorous rather than a ruthless office culture. He further defines what it means to be ruthless: cutting back employment at times of crisis without thoughtful consideration, for instance. On the other hand, a rigorous culture means implementing a standard that is enforced at all times and at all levels of management, especially at the top.
How to Be Rigorous
The research team was able to come up with three practical disciplines based on their study on how to foster a rigorous office culture:
1. **Discipline One: Have the discipline to keep looking, especially when you haven't found the right person for the job.** In this discipline, Collins explains what Packard's Law means, tracing its route from David Packard, founder of the Hewlett-Packard Company. The Packard Law speaks of the secret to their company's success not by concentrating on the growth of the company in terms relative to the market, but by concentrating on the company's ability to retain the right people.
2. **Discipline Number Two: Act when you need people to change.** This discipline teaches readers that when you find yourself in a situation where you feel like you need to manage a person you hired, then you probably made a mistake in hiring that person. According to Collins, the best employees don't need managing; to a certain extent, they will need guidance and teaching, but not managing.
3. **Discipline Number Three: Place the best people in the best opportunities, not in the biggest of problems.** It has often been mentioned in the "who first" approach to management that it is primarily a question of who rather than what. In the case of problematic situations, Collins suggests that the best method to success is to put your best people in the biggest opportunities.
Doesn't Matter What Kind of Strategy You're Pursuing If You Have the Wrong People in the Wrong Places
First Who, Then Great Companies and a Great Life
In this section, Collins tackles the issue of personal sacrifice. He answers the question of whether or not it is possible to have a good life when you're in the pursuit of turning your company from good to great. Collins says yes, it is possible. He makes an example of Coleman Mockler, CEO of shaving giant Gillette. According to Collins, Mockler had a great family, a Harvard degree, and Gillette as his biggest legacy. Even during the most difficult crisis the company had faced in the 1980s, Gillette's performance in the stock market never wavered, and Mockler still managed to maintain a healthy work-life balance. When asked of his secret to a balanced life, Mockler told Collins that he had more space to maneuver his time precisely because he had the right people in the right places. Precisely because there was no need to manage his excellent management team, he had more time for his family compared to the control group executives that relied on a single genius to make everything work. In conclusion, Collins emphasizes the great value that lies in adhering to the "first who" principle, a key to unlocking a perfectly balanced life, having time for family and friends, all while keeping up with the difficulties of managing a great company.
Confront the Brutal Facts, Yet Never Lose Faith
In this chapter, Collins begins highlighting a case study from the research. He starts with the case of A&P, a tea company, and Kroger, a grocery chain, the story of which is much akin to role reversals. A&P used to outperform Kroger until a time when both fell apart in terms of market performance. Then, a miraculous divergence boosted Kroger higher than A&P could ever place in the stock market. Collins explains this phenomenon by citing how Americans changed through time. According to Collins, Americans no longer wanted a grocery that only specialized in selling food items. Americans wanted to do banking, purchase medicines, and get their grocery needs all at the same time. This was what led Kroger to do the successful transition from good to great. When compared, the two companies, A&P and Kroger, were both old; Kroger at 82, while A&P was already 111 years at the time of writing. Strongholds in the same parts of the United States, and both had intimate knowledge of how the world was changing around them. The only thing that differentiated the two was that Kroger was able to face the brutal facts of change and adapt along with it. With the changing preferences of Americans, Kroger began redesigning their grocery chains, gradually transforming branched locations into what is now known as supermarkets, where everyone can shop, dine, buy medicine, etc., all at the same place.
Facts Are Better Than Dreams
Collins reiterates in this section the value of confronting the reality rather than pursuing dreams that are already offbeat to what is actually happening on the ground. This was the fatal mistake of A&P, as it struggled in denial that its market strategy was wrong. Kroger, on the other hand, was able to pull off a stroke of genius when it dedicated all of its resources into creating the superstore dream for American consumers. According to Collins's research, while all companies can strive for greatness, the difference between good to great companies and the control group was that good to great companies constantly re-evaluated their journey based on the brutal reality that is an ever-changing society.
A Climate Where the Truth Is Heard
Another point Collins wants to make in this chapter is the attitude of good to great leaders in fostering a culture wherein facts are objectively heard and where there is freedom and opportunity for everyone to express the truth. Collins shares four basic practices that allow good to great leaders to create a climate where truth can be heard:
1. **Lead with questions, not answers.** A trait that is common throughout good to great leaders that were analyzed by the research team is how they use questions. According to Collins, good to great leaders use questions to get a better understanding of things. He gives an example with Alan Wurtzel, who was known for always asking questions. When he understood the big picture, Wurtzel was decisive in pursuing the truth through questions. Collins further mentions how good to great leaders would sometimes call a meeting without a specific agenda in mind. When the management team sat down, Wurtzel would start asking everybody what was on their minds and then pursued topics from there until he found and understood a truth. This basic practice also involves practicing humility; being a great leader requires admitting that no one has a monopoly on understanding and that one only needs to ask in order to uncover the truth.
2. **Engage in dialogue and debate, not coercion.** Collins shares to his readers that good to great leaders are keen to engage in lively debate until they find answers, particularly on how to reach greatness. In various examples, Collins points out good to great leaders that facilitated the most intense dialogues between general managers until they found answers. Like Wurtzel, other good to great leaders did not start with the answer but rather pursued the question through consistent questioning, finding it until a viable answer came up.
3. **Conduct autopsies without blame.** A point related to fostering a culture where everyone is heard: analyzing mistakes without pointing fingers is another practice good to great leaders specialize in. In his examples, Collins points out how good to great leaders would talk pages upon pages about some of the biggest corporate mistakes they had made as a company. Interestingly, not a single sentence would point to a single person blaming him or her for that mistake. Instead, the sophistry in their exposition revolves clearly around how to learn from that mistake, a valuable lesson that must be learned by all who seek to become good to great leaders.
4. **Build red flag mechanisms.** In analyzing good to great companies and comparing them to the control group, Collins's research team found out that both groups had equal access to information. However, making use of that information in a way that made the company great was what made the big difference. Collins suggests building your own red flag mechanisms, especially if you think you're not yet a level five leader. According to Collins, level five leaders would need red flag mechanisms anymore, as they are more able to discern which information needs attention.
Unwavering Faith Amid the Brutal Facts
The point this whole chapter wants to make is that despite the brutal facts, good to great leaders should never lose faith. Take, for example, the case of Scott Paper, which reigned as the highest-grossing paper-based consumer business in America in the 1960s. Procter & Gamble, however, took the industry by storm and catapulted Scott Paper to second place. Instead of denying the fact that they were beaten by another company, Scott Paper instead faced the brutal fact and found ways on how to diversify their product offerings. Instead of going up with the P&G giant, Scott Paper found a new niche wherein it maintained its successful streak without putting up a fight against its giant competitor. Another example is how Kimberly-Clark reacted to P&G. Opposite to Scott Paper's response, Kimberly-Clark took the bull by its horns. Darwin Smith, CEO of Kimberly-Clark, motivated his company until they were able to beat P&G. Collins tells us that there is a lesson that can be learned from these two polarizing examples: that by confronting the brutal facts, companies like Kimberly-Clark and Scott Paper, regardless of how they reacted, made themselves stronger and more resilient companies. Indeed, they faced reality and yet did not lose faith in their greatness.
The Hedgehog Concept: Simplicity Within the Three Circles
The Hedgehog Concept comes from a famous parable by Isaiah Berlin, where in he tells the story of a fox and a hedgehog. The fox, as cunning as it is, has knowledge of many things and can devise the most complex plans for a surprise attack against the hedgehog. The hedgehog, on the other hand, knows of only one thing: the capacity for defense. In the story, the fox makes a plan to attack the hedgehog every single day, all resulting in the same outcome: with the fox retreating after seeing the hedgehog curled up with its spikes protruding. In this parable, the author Berlin divides people into two groups. Foxes are more attuned to pursuing many things at the same time and thinking about the most sophisticated plans on how to pursue these plans; a bit of a scattered mind, according to Berlin. The hedgehog, on the other hand, simplifies everything and organizes ideas into a concept that can guide their daily life. People classified as hedgehogs have the ability to simplify the most complex situations into the most simplest stick of ideas, making them easier to solve.
Collins further provides examples of successful people who were hedgehogs and left a mark in the world: Marx with his theory of class, Einstein and relativity, Darwin and natural selection. All of these great thinkers were able to simplify a rather complex world into a unified theory that explained how things worked. Collins adds that hedgehogs, as simple thinkers as they are, are not stupid. On the contrary, hedgehogs understand the value of simplicity when it came to being useful. Collins reveals that good to great thinkers are hedgehogs that pursue a simple goal, compared to comparison companies that were mostly foxes pursuing different paths that made them scattered and diffused.
The Three Circles
In the next section, Collins starts with an excerpt from one of their team discussions when they were talking about the difference between comparison and good to great companies. One of his researchers pointed out that the difference is not about strategy because even the comparison companies had strategies. Another researcher, however, was able to see that the difference lies in the simplicity of ideas. They further examined good to great companies such as Kroger, that invested all they had in the supermarket concept; Kimberly-Clark, which made a bold move to the paper-based consumption industry; and Walgreens, which chose to specialize in convenience store and pharmacy rollout into one. These simple ideas led these companies from being good to being great.
In essence, Collins is talking about the essential difference between comparison and good to great companies along two dimensions:
1. Good to great companies understood how their companies worked in three dimensions, or what is called the three circles.
2. Good to great companies were successful at translating that understanding into simple ideas that they pursued until they reached greatness.
Collins then shares the three circles, or three guidelines, on how to understand your company:
1. **What is it that you're best at doing?** Collins suggests companies to look into the proper niche that the company can be best at. He differentiates this concept with the idea of core competence, theorizing that you can be the best at something that you have never even done before.
2. **Where does your economic engine lie?** Collins suggests for companies to look into what pays the bills, what product or which company is producing the most money that keeps the company going.
3. **Discover your passion.** Finally, Collins suggests for companies to go on a journey of discovering what makes them passionate.
Understanding what you can and cannot be best at, a defining trait of good to great companies, is the ability to understand what he or she is doing best and, conversely, knowledge in which areas they do not excel. Collins further notes that the purpose of studying the Hedgehog Concept is not to formulate the strategy of being the best. It does not plan to be the best; rather, it is understanding what you do best, and the differences between the two become a pivotal concept to grasp. Collins gave the case of Abbott versus Upjohn, two companies in the same industry. Abbott was in the pharmaceutical industry but was far beaten by Merck in terms of industry leadership. Instead of confronting Merck, Abbott diversified its product line and was able to survive the crisis. Upjohn, on the other hand, never confronted the reality that was miles away from Merck and instead remained focused on trying to beat the pharmaceutical giant. Upjohn lost to Merck and was eventually acquired in 1995. The lesson here is that despite the fact that both Abbott and Upjohn have been in the pharmaceutical industry for decades, the mere act of going out of the box saved Abbott, but Upjohn was left behind.
Insight Into Your Economic Engine: What Is Your Denominator?
Based on the research team's findings, they analyzed a number of companies that were engaged in one of the top-performing industries in the market, and other companies were in the lowest percentile in terms of industry market performance. Nevertheless, results showed that even some companies belonging to the less profitable businesses were able to transition from good to great. Hence, Collins suggests that the key factor in transitioning from good to great is not the type of industry where the company is, but in the understanding of the company's economic engine. By understanding what sells and where the company can best perform, the company can thrive even in the harshest of conditions.
Understanding Your Passion
Collins begins this session with an anecdote of an interview with Philip Morris executives that surpassed the research team with the intensity and passion that they demonstrated during the interviews. To be specific, he gave the example of Ross Millhiser, then vice president of Philip Morris and a known cigarette lover. What Collins is trying to point out here is that Philip Morris executives clearly loved the company and had an intense passion about them in making the best-tasting cigarettes. Collins suggests that executives working in good to great companies do not force themselves to be passionate about what they do; instead, they sought after things they were already passionate about.
The Triumph of Understanding Over Bravado
In this section, Collins mentions a pre-hedgehog and a post-hedgehog phase. Companies in the pre-hedgehog phase are in for a murky journey, not yet getting through the fog. Post-hedgehog companies, on the other hand, have gone through the mist and are more able to see clearly for miles on end where the company needs to go. In the research findings, Collins's team found out that comparison companies never really got through to the fog compared to good to great companies that successfully passed through. The secret of good to great companies, according to Collins, is that executives would always ask the right questions, and the fact that good to great companies formulated their strategy around an objective understanding of reality rather than mere bravado.
A Culture of Discipline: Freedom Comes with Equal Amounts of Responsibility
In this chapter, Collins explores the values of discipline and how best to respond to success. According to Collins, seldom do startup companies transition to becoming great companies, and this is because of the wrong way they respond to success. Much like the competence trap discussed in chapter 1, Collins recalls how successful startups sometimes trip over their mid-rise success. This means becoming more like the fox who entertains sophisticated plans and even more ventures until the company loses its focus entirely. This is the cliff where comparison companies fall apart. A key to avoid this trap, according to Collins, is adherence to strict organizational discipline. He shares a matrix he calls the Good to Great Matrix of Creative Discipline, which is divided into four quadrants. Quadrant One deals with hierarchical organization; Quadrant Two tackles great organization; Quadrant Three with bureaucratic organization; and Quadrant Four on startup organizations. The direction upward points to the culture of discipline practiced by the organization, whereas the line going from right to left pertains to the standard of ethics that the organization exercises. Collins suggests companies to map out their organizational success in this matrix. Knowing where your company resides in this matrix tells a lot about how the company practices discipline. He further exemplifies this point with an example from Abbott Laboratories, more precisely summarized in the following points:
1. Foster a culture of freedom equipped with ample responsibility.
2. Strategically position self-disciplined people into that culture of discipline who will do anything to adhere to their assigned responsibilities. Gradually, they will cleanse the pool and get rid of the rotten tomatoes.
3. Know the vital difference between a tyrant and a leader who fosters a culture of discipline.
4. Consistently hold on to the Hedgehog Concept with a laser focus on knowing the three circles.
In addition, it can be helpful to list down a "not-to-do" list in order to rid your company of bad practices.
Freedom and Responsibility Within a Framework
Good to great leaders are adept at establishing a business and productivity framework that nevertheless provides people with the freedom and the proportional responsibility they should shoulder. The research studies also show that level five leaders had a knack of hiring people who needed minimal management: people who were self-disciplined. In order for the level five leaders to manage the system and not the people, according to Collins, the secret of fostering discipline in any organization lies in the placement of the right people who are disciplined. This translates to a disciplined thinking that slowly transforms the entire organization toward disciplined action.
A Culture, Not a Tyrant
A debate once emerged on whether to include this point in the book or not. Some members of the research team pointed out that both comparison companies and good to great companies had a disciplined roster of people. After an in-depth analysis of the findings, the team was able to figure out that there is indeed a difference between the two. Comparison companies owe their discipline to sheer force embodied by level five leaders. Good to great companies, on the other hand, build an enduring culture that allows the company to prosper and develop with discipline.
Fanatical Adherence to the Hedgehog Concept
Collins begins this section with an example in the story of Pitney Bowes, a company that had a monopoly over postage meter machine sales. It had a close tie with the U.S. Postal Service, which meant it got all government procurement projects without other companies buying for the deal. Nevertheless, Pitney Bowes fell into a landslide when its monopoly was gradually stripped away. Pitney Bowes would have ended bankrupt if not for level five leader Fred Allen, who redefined the role of Pitney Bowes in the industry of postage meters. He questioned whether the company could retain its identity of producing solely postage meter machines. Eventually, the management team, through Fred Allen's level five leadership, pulled off the miraculous turn when they diversified into the production of sophisticated back-office products and machines, such as copiers and fax machines. Allen found a new economic engine without violating the Hedgehog Concept.
Start a Stop Doing List
According to Collins, one habit they found to be common among good to great leaders is to create a "stop doing" list, as opposed to the usual "to-do" list people create. As to start disciplining themselves, furthermore, Collins relates this habit to the crucial process of budgeting. He referred to budgeting as a case wherein leaders had to identify areas that go along the Hedgehog Concept and should be funded more for greater strength.
Chapter Seven: Technology Accelerators
Collins begins this chapter with the drugstore.com fiasco. In the late 1990s, drugstore.com was one of the first web-based pharmacy stores who sold its stocks to the public. At the time, anything connected to the internet was a hot deal, especially among investors. This led to stock prices multiplying thrice to $65 per share, which in turn resulted in over $3.5 billion in market value. It's interesting to note, though, that drugstore.com only sold its products for nine months, had less than 500 workers, and did not offer investor dividends at all. So, what made this internet drugstore suddenly go nuts in the stock market? Furthermore, dot-coms in the '90s devoured big pharmaceutical company sales by up to $15 billion, especially Walgreens. Nevertheless, Walgreens did not panic at the sight of $15 billion suddenly vanishing because of the dot-com frenzy. Instead, Walgreens' management paused to reflect and began with an experimental website, all still in the process of internal management talks. It began slowly at first, as executives studied how the internet could be tied up to their sophisticated inventory and how it aligned with their customer convenience model. Then, suddenly, in October 2000, Walgreens launched a sophisticated but user-friendly website that made its delivery system more convenient for customers. A year after the dot-com craze, Walgreens came back with a vengeance and took the stock market by storm, even doubling its market value twice in just a year. The lesson in this story, according to Collins, is that drugstore.com never really thought about how to become a great company along with the three-circle paradigm. It merely used the hype brought about by new technology. Walgreens, on the other hand, took a strategic step to ensure that the internet would work for them along the lines of the three circles.
Technology and the Hedgehog Concept
Collins points out that some of the best good to great companies, such as Walmart, Walgreens, Procter & Gamble, and Kimberly-Clark, went through several technology changes in the past. With the advent of electricity, television, and other new technologies that came their way, these companies managed to endure. In this context, what makes the difference between comparison companies and good to great companies is how they look at technology and its role in what the company does best, in what the company's economic engine is, and what the company is passionate about.
Technology as an Accelerator, Not a Creator of Momentum
Then, Fannie Mae CEO Jim Johnson hired a firm to launch a technology audit. The purpose of the audit was to see whether the company was keeping with the latest standards in a grading scheme of 1 to 4. Four meant they were using cutting-edge technology, while the score of one meant they were clearly at the Stone Age. The findings indicated that they were a mere two miles away from Wall Street. At the time, the audit's lead consultant, Bill Kelvy, advanced Fannie Mae's technology from 2 to 3.8 in just five years. His team changed how the company worked with sophisticated programs that dramatically reduced manual effort at clerical jobs. What Collins wants to point out here is that Fannie Mae, like other good to great companies, had to adapt to technology much later than the advent of such technology. Walgreens had to study how the internet worked for them, and same is the case with Fannie Mae. In essence, they did not use technology to create their own momentum; they used it brilliantly as an accelerator to the things they did best and were passionate about.
The Technology Trap
At the time of Collins's research, there was indeed much hype about science and technology. *Time* Magazine even picked Albert Einstein as Person of the Century, which surprised a lot of people considering the wide array of personalities that could easily be construed as game-changing in the 20th century. *Time* editors answered this controversy by telling his readers that while the 20th century could be clearly associated with the politics of leaders and their cultural contributions, nothing beat the advances humanity has made in the field of science and technology, which led them to picking Einstein as Person of the Century. According to Collins, *Time* Magazine's choice reflects the human psyche and society's obsession with technology. However, in a series of interviews with good to great company executives, the research team was surprised that none of them even mentioned technology as a crucial factor in the transition from being good to great. Even when some cases alluded to technology, it was only mentioned ranking at fourth. Therefore, Collins had to pose the obvious question: If technology was so important, why was it that good to great companies seldom talked about it? Collins replied that blind reliance on the internet or any form of technology is, most of the time, a disadvantage. It only works in your favor when it is used in the right way, aligned with the simplest and clearest ideas, and founded on a comprehensive understanding of the company.
Technology and the Fear of Being Left Behind
Collins begins with a debate the research team once had on
Whether to include a technology chapter or not, the debate was eventually settled when a curious question popped up on why Good to Great companies had such an objective view on tech technology compared to comparison companies that responded in a reactionary way with technology came to the fray. The research team finally agreed that the answer to this intriguing question was that Good to Great companies had the right motivations, propelled by their desire to excel in what they are best at doing. Compared to comparison companies, non-level five leaders are motivated by fear, the fear of being left behind.
The Flywheel and the Doom Loop. In this chapter, Collins speaks of the flywheel, wherein leaders are led to push with great force in order to create momentum. After 100 pushes in the same direction, the flywheel suddenly works on its own momentum, getting faster and faster by the second. When asked which big push led to the flywheel spinning so fast, Colin says it becomes irrelevant. The reason why the flywheel turned in such a speed was precisely because of the cumulative effort the leader gave in trying to make it turn on its own energy, build up, and break through. Collins explains that the flywheel symbolizes the experience that Good to Great leaders went through when they were transitioning from good to great. He further tells us that greatness did not come from one big push, and that there was no defining moment to think of in the advent of transformation. In essence, Collins emphasizes that success is a cumulative process, made up of steps and decisions teams and leaders make towards a certain direction or directions.
Collins provides a commentary on how the media portrays Good to Great companies, citing the fact that the media only covers companies that are already successful, with a flywheel that turns a thousand rotations per minute. The media never really tells its viewers how it got there, leading most of us to think that there was some miraculous breakthrough moment that defined success for the company. The way the media tells this story offers an insight on why it looks like when we watch from the outside. From the inside, however, the experience is totally different and resembles more of a gradual, nonchalant moment, not just a luxury of circumstance.
A lesson that must be learned from the flywheel model is the elements of buildup and breakthrough. In contrasting how comparison companies reacted to the pressure of the stock market compared to how Good to Great companies such as Fannie Mae reacted, it was pretty clear that Good to Great companies had the patience to go on in the same direction until they had built their own momentum, their own breakthrough.
The Flywheel Effect. The flywheel effect teaches us that the road to success is a series of incremental changes brought upon by an accumulation of efforts pointing to the right direction until such time that the flywheel has generated enough of the incremental changes. Doing greatness dawned upon companies who had the sheer discipline and understanding to make this concept work. These incremental changes, however, take a tremendous amount of patience, commitment, and willpower, even at times when companies don't see ahead where they're going.
According to Collins, the main difference between comparison and Good to Great companies is the aspect of managing change. Once companies learn how to manage these incremental changes, only then do the problems of commitment and motivation evaporate as the flywheel effect takes place. Collins makes an example of a Level Five leader, Jim Herring, who was responsible for making Kroger great. According to Herring, he consciously avoided efforts to spark motivation; instead, he brought all of his attention and effort to turning the flywheel until people could see tangible results that the plan was working. According to Collins, the reason why most executives seldom communicate their corporate goals is because they let the flywheel do the talking. Collins further suggests that as the flywheel turns faster, building up on its own momentum, people will begin to see the impact that it has on the company. That phenomenon in itself is proof enough to motivate everyone.
The Doom Loop. On the other side of the coin, while the flywheel effect speaks of so much positivity and persevering towards a single direction, some companies fall into what is called the Doom Loop. In an effort to try to skip the buildup phase in the flywheel, some of the comparison companies tended to establish new programs aiming to motivate people, only to end up with fluctuating results. The purpose of their efforts was to seek a single defining moment that would bring them straight to the breakthrough phase. Talking in analogies, what they were doing resembled turning the flywheel from one direction to another, stopping, and then turning it again to the opposite direction. After years of doing this inconsistent method of trying to break through, comparison companies ended up in the Doom Loop.
The perfect example is the case of Warner Lambert, a competitor of Gillette. Warner Lambert declared in 1979 that it wanted to be the top company in consumer products. Exactly one year later, the company turned to the other direction and went on to the healthcare line, but now with a different purpose: to beat the likes of Smith Kline. Another year went by, and Warner Lambert yet again returned to its previous orientation to consumer products. By 1987, management felt another change of heart, trying to be more like Merck, spending crazy amounts of money on advertising. By the time of the Clintons in the early 1990s, it went back again to consumer brand diversification. The problem with Warner Lambert was that every time there was a change in CEO, the direction pushed through by the predecessor was thrown away in favor of a new program. The result of this inconsistent driving of the flywheel was a moment of spectacular results, followed by a moment of stagnation, and then decline. Such a business approach was unsustainable. This is the Doom Loop.
The Misguided Use of Acquisitions. In this section, Collins's team looked into the role that mergers and acquisitions played in the transition of companies from good to great. Their findings indicate that Good to Great companies used acquisitions and mergers at a time when they had built enough momentum on their flywheel and at the time when they had figured out their own Hedgehog Concept. In essence, they did not use acquisitions to create their own momentum. What made acquisitions successful was that it was being used to accelerate momentum that was already there in the first place.
Leaders Who Stopped the Flywheel. Another Doom Loop pattern that the research team observed was how new leaders would tend to stop a flywheel that was already gaining momentum, throwing it into the opposite direction. Take, for example, the case of the Harris Corporation. Harris Corporation practiced the Good to Great methods even in the 1960s, which led to a marked buildup and breakthrough. The company already had a Hedgehog Concept in place, thanks to George Diely and Richard Tois, driving the company to a vision where it became best in the printing and communications technology industry. However, in 1978, a new CEO, Joseph Boyd, stepped in and stopped the flywheel momentum to a total halt. His first decree as CEO of Harris was to move headquarters to Florida. This resulted in the divestment of the company from the printing industry, especially at a time when Harris was already one of the leading companies in the world that produced printing devices. In other words, the production of printing devices was the company's economic engine, and by divesting from that practice, Boyd effectively threw the company into shambles.
The Flywheel as a Roundabout Idea. In this section, Collins reinforces the idea of the flywheel as an accumulation of results and efforts directed at a single, clear, and tangible objective. Furthermore, Collins points out that in any system or framework, all the parts and processes that operate within that system play a role in accumulating a great number of results that is greater than the sum of its parts. Collins then discusses some of the signs to tell the difference whether the company is in the Doom Loop or in the flywheel. According to Collins, Level Five leaders naturally feel more comfortable with the flywheel, more interested in continuously pushing towards an objective rather than formulating spectacular programs that aim to skip the build-up phase. Collins even recalls the "First Who" principle: specifically, placing the right people in the right places and removing the wrong people from the fray is crucial in creating the initial buildup. After selecting the right people for your team, Collins suggests that the next step is to understand the company along the three circles of the Hedgehog Concept. Once the Hedgehog Concept is solidly founded on the company's overall efforts and operations, a continuous and diligent application of these principles will lead to a spectacular breakthrough of results.
From Good to Great to Built to Last. Collins starts his last chapter of his book by revisiting the lessons of his previous book, Built to Last. He wanted a way to reconcile the two research studies and eventually found out that it was best to build the research from scratch rather than starting with Built to Last as a point of reference. Therefore, the research team decided that it was more fruitful and objective to begin the Good to Last project thinking as if Built to Last was not yet written. The purpose of the research team was to avoid their biases from meddling with the findings of the research. Collins then takes a step back and looks at his two masterpieces from a more objective point of view, comparing how each book relates with the other without compromising their individual integrities.
Collins found out four conclusions from his reflection:
1. When compared, Built to Last companies also followed the Good to Great methods described in this book. The only difference was that Built to Last companies did it in small steps, early stages, just to get to stand up on their own feet.
2. Collins shares that he sees Good to Great as a prequel to Built to Last. He suggests his readers to use the Good to Great principles to get a successful momentum and then apply the Built to Last principles to create an enduring corporation.
3. Collins further suggests that for companies who have already reached a sustained success but are not yet at the peak of becoming an iconic corporation, it is advisable to use the concept from Built to Last, telling companies to have a deeper understanding of the company's core values.
4. In Built to Last, Collins posed a question that was not exactly answered until Good to Great was released. The question revolved around knowing the difference between a good and a bad goal, or what they called BHAG (Big, Hairy, Audacious Goal).
Good to Great in the Early Stages of Built to Last. When Collins revisited his study from Built to Last, he found out that the enduring companies they studied in Built to Last also went through the Good to Great transition. They weren't able to spot it that quickly because these companies applied the Good to Great principles during their early years. He shares a classic example with Walmart. Founded by Sam Walton, in 1945, Walton first had a small store, only to have a second store 7 years later. Walton made incremental changes with his company until he achieved a stature of greatness, building on a Hedgehog Concept and applying the first two principles and understanding the company along the three circles. Other examples include Hewlett-Packard, applying the Good to Great principles in its formative years.
Core Ideology: The Extra Dimension of Enduring Greatness. If any company embodied what it meant having a core ideology, it was definitely Hewlett-Packard. Co-founder Bill Hewlett would often say during his interviews how he was most proud of the legacy of a core ideology left with HP. It became known as the HP Way, referring to a set of core values that the company stood by, such as:
1. Technical contribution
2. Respect for the individual
3. Responsibility to society
According to Collins, the best Built to Last companies were adept at preserving their core values over time while at the same time artfully adapting to an ever-changing world. These core ideologies helped HP go from being good to great to a company that was built to last.
Good BHAGs, Bad BHAGs, and Other Conceptual Links. In this section, Collins presents how some of the concepts that were introduced in Built to Last would not be possible without the methods described in Good to Great, as follows:
1. Clock Building, Not Time Telling. Described in previous chapters were leaders who had the tendency to stop the flywheel and bring the company to bankruptcy. In this concept, Collins tells of a way for companies to foster a culture within an organization that can adapt through generations and generations of leaders.
2. Genius of AND. Another secret of Built to Last companies was the creative way of finding about how to get the good results A and B without having to choose one at a time. Conversely, any company that can do this also has the following traits: purpose and profit, continuity and change, freedom and responsibility.
3. Core Ideology. A core ideology is composed of core values that guide a company's operations and decisions for a strategic amount of time. Built to Last companies all had their core values intact before arriving at the point of iconic stature.
4. Preserve the Core, Stimulate Progress. Once a core ideology becomes operational, it becomes more crucial to preserve that core but with enough flexibility to stimulate progress and adapt to change.
Why Greatness? In this section, Collins enlightens readers on the question of why choose greatness when one could settle to just becoming successful. He further tells us that one can have a small but great company. Greatness, he adds, is more than just the size of the company and the amount of profit you're making. He then tells readers that the purpose of the entire book is not to add burden to people who are already overworked towards contributing to a company's effort to become great. Instead, the purpose of the book is to enlighten everyone that a large part of what we do is a waste of time without the right methods and the principles that work. Applying the principles described in this book will make life much simpler and more bearable. Then he focuses on the motivations behind greatness. The simple fact that a person even asks such a question means that that person is not at the right kind of work, not in the kind that he or she is passionate about.
Frequently Asked Questions. In addition to the identified Good to Great possibilities in the book, are there examples that did not make the publication? Collins answers that the 11 companies served as examples from an initial study of Fortune 500 companies.
Why were there only 11 companies mentioned in the book? The reason behind the fact that only 11 companies were revealed in the book, despite the 500 total number of cases, is that there was a tough screening process that was done to extract the best lessons out of the companies that exemplified it the most. Another reason is that the measure of sustainability set at 15 years is quite a high standard to meet, which led to a great number of companies falling off the table.
How do you reconcile statistical significance given that only 11 companies made it to the cut, while there was a total size of 28 companies, including a comparison group? To answer this question, Collins and his team consulted with the University of Colorado's statistician, Jeffrey T. LTI, who told them that there was really no problem. The concept of statistical significance, according to LTI, applied only when the research methodology was designed to sample data. In the case of the team's research, the approach was a purposeful selection of the case studies based on a predetermined criterion.
Why limit the research to companies that are publicly traded? The research team chose publicly traded companies because of:
1. Ease of access to data
2. Widely accepted definition sets
Why is the research limited only to US-based corporations? Selecting companies outside of the US could mean undermining the consistency of the selection and procedure the research team had agreed upon.
Why aren't there high-technology companies in the study? A primary criterion for selecting Good to Great companies was the length of time of existence. Since most high-technology companies didn't exist 15 years prior to writing the book, it did not meet the research criterion.
How can great companies make use of Good to Great principles if they are already great? Reading the book will give them, even the greatest companies, some form of understanding on why the company became great in the first place.
How do you view the current challenges faced by Good to Great companies? All companies, even the greatest ones, are not immune to difficulties and challenges. No company ever studied in this research had an unblemished record. Every single company had their moments of ups and downs, but what differentiated them from others was their ability to stand up again, even after tremendous failures.
Why is Philip Morris a great company if it sold tobacco? The reason why Philip Morris was included is not because of what particular product type it sells. Philip Morris was included both in Built to Last and Good to Great because it outperformed all other tobacco companies that got in its way.
Can a company adhere to a single Hedgehog Concept and still have a diverse product offering? While it is possible for companies with diverse portfolios to be great, the study suggests that they rarely produce sustained results.
How does the board of directors figure in the transition of any company from good to great? Board members have the official duty to pick company leaders, and it becomes their responsibility to pick Level Five leaders they see fit to become CEOs. It's also important for the board to understand what makes a Level Five leader.
Why? Can the current number of young high-tech companies have Level Five leaders? Yes, Collins answers with John Morage, a meek, shy man who stepped into Cisco Systems and turned the company for the better.
Can the "First Who" principle be applied when there is a shortage of the right people? Like what has already been discussed in previous chapters, a company should practice the discipline of not hiring a person until they found the right one for the position.
How can you exercise the concept of taking out the wrong people on the bus when the wrong people are pretty difficult to get rid of? You can still apply the concept, but it will probably take up more time than usual.
I'm a startup entrepreneur, how are these ideas relevant to me? Read chapter nine, where Collins discusses how Good to Great ideas apply for companies in their early stages.
What use do I have with these findings if I'm not a CEO? There are plenty. Read the story at the end of chapter nine.
Where and how should I start? First, take it all in and take the time you need to comprehensively understand what the book is trying to tell you. Then, work your way to the process, starting with the first two principles all the way to developing yourself into a Level Five leader.
As a teacher at heart, Collins's passion has always been in the business of sharing the lessons he has to give. In his book, the lessons he shares are invaluable, not just for CEOs but also for common people who strive to be extraordinary. At the core of this book is the coherent description of what it takes to be a great leader: having the vision to foresee and adapt to changes, and having the guts to make drastic changes amid crisis. The book shares some of the most valuable insights on how good companies turn to greatness. Not only does it help good companies that are on their way to breakthrough, but it also shares some vital lessons that even the greatest companies need to learn. His method of sharing his research team's findings captivates the reader's imagination and yet objectively synthesizes the lessons that can be drawn from the experience of the most successful leaders in their respective industries. Indeed, it was Collins's gift to make the complex understandable and to explain the sophistication behind the things we often deem as simple. He demystifies most misconceptions we have about successful businesses and how they operate. He differentiates between the faux leaders and the real ones and, more importantly, gives advice on how to become a real leader, a Level Five leader at that. In addition, the book provides clear-cut instructions on how to pursue a single, clear, and vivid objective that can bring any company from good to great. Collins never ceases to amaze with his analogies that teach important points, such as the analogy with the hog and the fox, the flywheel, and the Doom Loop, among others. Because he writes in such a relatable way, the book appeals to a variety of audiences, even those beyond the field of business and management. Despite the fact that the book was released in 2001, Collins and his team had the foresight to tackle the issue of technology and how it could be utilized toward the journey to greatness. He provides the most detailed examples that make his lessons more lively and imaginative to readers' minds.
In conclusion, the book is a successful simplification of some of the most complex theories in the field of business studies. In more ways than one, Collins writes to be understood. The book serves as an easy-to-understand manual on how to succeed in organizational development. It gives premium to the role of leaders in the industry but also gives equal amount of attention on how external factors and the vital role of the right people play in the success of any organization in transitioning from good to great.