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

by Jim Collins

Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great.

Few people attain great lives, in large part because it is just so easy to settle for a good life. The vast majority of companies never become great, precisely because the vast majority become quite good—and that is their main problem.

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 (you can’t just be lucky for fifteen years) and would exceed the average tenure of most chief executive officers (helping us to separate great companies from companies that just happened to have a single great leader). We

What did the good-to-great companies share in common that distinguished them from the comparison companies?

What systematically distinguishes gold medal winners from those who never won a medal?

we developed all of the concepts in this book by making empirical deductions directly from the data. We did not begin this project with a theory to test or prove. We sought to build a theory from the ground up, derived directly from the evidence.

always asking, “What’s different?”

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.

Technology and technology-driven change has virtually nothing to do with igniting a transformation from good to great. Technology can accelerate a transformation, but technology cannot cause a transformation.

The good-to-great companies paid scant attention to managing change, motivating people, or creating alignment. Under the right conditions, the problems of commitment, alignment, motivation, and change largely melt away.

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

it was an iterative process of looping back and forth, developing ideas and testing them against the data, revising the ideas, building a framework, seeing it break under the weight of evidence, and rebuilding it yet again. That process was repeated over and over, until everything hung together in a coherent framework of concepts. We all have a strength or two in life, and I suppose mine is the ability to take a lump of unorganized information, see patterns, and extract order from the mess—to go from chaos to concept.

Think of the transformation as a process of buildup followed by breakthrough, broken into three broad stages: disciplined people, disciplined thought, and disciplined action.

Self-effacing, quiet, reserved, even shy—these leaders are a paradoxical blend of personal humility and professional will. They are more like Lincoln and Socrates than Patton or Caesar.

We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats—and then they figured out where to drive it.

People are not your most important asset. The right people are.

You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, AND at the same time have the discipline to confront the most brutal facts of your current reality, whatever they might be.

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.

Yes, the specific application will change (the engineering), but certain immutable laws of organized human performance (the physics) will endure.

That good is the enemy of great is not just a business problem. It is a human problem.

You can accomplish anything in life, provided that you do not mind who gets the credit.

man who carried no airs of self-importance,

He never cultivated hero status or executive celebrity status.

His awkward shyness and lack of pretense was coupled with a fierce, even stoic, resolve toward life.

“I never stopped trying to become qualified for the job.”

Level 5 leader—an individual who blends extreme personal humility with intense professional will.

they were self-effacing individuals who displayed the fierce resolve to do whatever needed to be done to make the company great.

Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious—but their ambition is first and foremost for the institution, not themselves.

To use an analogy, the “Leadership is the answer to everything” perspective is the modern equivalent of the “God is the answer to everything” perspective that held back our scientific understanding of the physical world in the Dark Ages.

Similarly, every time we attribute everything to “Leadership,” we’re no different from people in the 1500s. We’re simply admitting our ignorance. Not that we should become leadership atheists (leadership does matter), but every time we throw our hands up in frustration—reverting back to “Well, the answer must be Leadership!”—we prevent ourselves from gaining deeper, more scientific understanding about what makes great companies tick.

All the good-to-great companies had Level 5 leadership at the time of transition.

Level 5 leaders are a study in duality: modest and willful, humble and fearless.

patrician

His placid persona hid an inner intensity, a dedication to making anything he touched the best it could possibly be—not just because of what he would get, but because he simply couldn’t imagine doing it any other way. It wouldn’t have been an option within Colman Mockler’s value system to take the easy path and turn the company over to those who would milk it like a cow, destroying its potential to become great, any more than it would have been an option for Lincoln to sue for peace and lose forever the chance of an enduring great nation.

ambition first and foremost for the company and concern for its success rather than

for one’s own riches and personal renown.

Level 5 leaders want to see the company even more successful in the next generation, comfortable with the idea that most people won’t ev...

we were struck by how the good-to-great leaders didn’t talk about themselves.

“I hope I’m not sounding like a big shot.” Or, “If the board hadn’t picked such great successors, you probably wouldn’t be talking with me today.”

“Did I have a lot to do with it? Oh, that sounds so self-serving. I don’t think I can take much credit. We were blessed with marvelous people.”

“There are...

of people in this company who could do my job be...

quiet, humble, modest, reserved, shy, gracious, mild-mannered, self-effacing, understated, did not believe his own clippings;

They were seemingly ordinary people quietly producing extraordinary results.

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.

Level 5 leaders are fanatically driven, infected with an incurable need to produce results.

If you didn’t have the capacity to become the best executive in the industry in your span of responsibility, then you would lose your paycheck.

The quiet, dogged nature of Level 5 leaders showed up not only in big decisions,

the window and the mirror.