Good to Great: Why Some Companies Make the Leap...And Others Don't

by Jim Collins

The good-to-great companies did not focus principally on what to do to become great; they focused equally on what not to do and what to stop doing.

Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice.

When you have disciplined people, you don’t need hierarchy. When you have disciplined thought, you don’t need bureaucracy. When you have disciplined action, you don’t need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance.

It is very important to grasp that Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great.

One good-to-great executive said that his best hiring decisions often came from people with no industry or business experience. In one case, he hired a manager who’d been captured twice during the Second World War and escaped both times. “I thought that anyone who could do that shouldn’t have trouble with business.”

“The only way to deliver to the people who are achieving is to not burden them with the people who are not achieving.”38

To be rigorous in people decisions means first becoming rigorous about top management people decisions.

Practical Discipline #1: When in doubt, don’t hire—keep looking.

Practical Discipline #2: When you know you need to make a people change, act.

Letting the wrong people hang around is unfair to all the right people, as they inevitably find themselves compensating for the inadequacies of the wrong people. Worse, it can drive away the best people. Strong performers are intrinsically motivated by performance, and when they see their efforts impeded by carrying extra weight, they eventually become frustrated.

People either stayed on the bus for a long time or got off the bus in a hurry. In other words, the good-to-great companies did not churn more, they churned better.

First, if it were a hiring decision (rather than a “should this person get off the bus?” decision), would you hire the person again? Second, if the person came to tell you that he or she is leaving to pursue an exciting new opportunity, would you feel terribly disappointed or secretly relieved?

Practical Discipline #3: Put your best people on your biggest opportunities, not your biggest problems.

The moment a leader allows himself to become the primary reality people worry about, rather than reality being the primary reality, you have a recipe for mediocrity, or worse. This is one of the key reasons why less charismatic leaders often produce better long-term results than their more charismatic counterparts.

What separates people, Stockdale taught me, is not the presence or absence of difficulty, but how they deal with the inevitable difficulties of life.

What I got from Abbott was the idea that when you set your objectives for the year, you record them in concrete.

They talked in terms of what they were trying to create and how they were trying to improve relative to an absolute standard of excellence.