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

by Jim Collins

The good-to-great examples that made the final cut into the study attained extraordinary results, averaging cumulative stock returns 6.9 times the general market in the fifteen years following their transition points.

That is amazing

First, a company had to demonstrate the good-to-great pattern independent of its industry; if the whole industry showed the same pattern, we dropped the company. Second, we debated whether we should use additional selection criteria beyond cumulative stock returns, such as impact on society and employee welfare. We eventually decided to limit our selection to the good-to-great results pattern, as we could not conceive of any legitimate and consistent method for selecting on these other variables without introducing our own biases.

Fannie Mae

In the audiobook this company was changed to Gillette

“unsustained comparisons”—companies that made a short-term shift from good to great but failed to maintain the trajectory—to

this gave us a total study set of twenty-eight companies: eleven good-to-great companies, eleven direct comparisons, and six unsustained comparisons.

Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated with taking a company from good to great. Ten of eleven good-to-great CEOs came from inside the company, whereas the comparison companies tried outside CEOs six times more often.

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.