Book Summary By Bud Roth

Good To Great By Jim Collins

Jim Collins co-authored Built to Last. Both books have a great deal of credibility because of the depth of research. Good to Great took 5 years of research. Jim Collins identified these eleven companies as great. They are compared with their closest competitors.

Is that all there are? I think there are many more great companies out there; especially medium size businesses that have sustained steady growth over 20-year period.

I will only be able to cover the key principles of “great” companies in this quick summary.

Principle-
Disciplined people
The very first thing to growing a great business is to identify and place the right people in the right roles. “Leaders of good-to-great companies start by getting the right people on the bus, and the right people off the bus, and the right people in the right seats.” “The right people are your most important asset.” A variety of types of leaders are needed to succeed. The Level 5 Leaders, executives, build enduring greatness through a paradoxical blend of personal humility and professional will. Leadership must be the catalyst to implement the actions that fulfill the vision. Leaders are overlooked at every level including individual contributors. You need a rigorous selection process to place the right people in the right spots. The combined talent sets the vision, not the CEO alone.

Principle-
Disciplined Thought
Seek the truth and confront the brutal facts. You need to consistently do this to find the path to greatness. Four basic practices to remember are:
1) Lead with questions.
2) Engage frequently in collaborative dialogue and debate.
3) Conduct autopsies without blame.
4) Build red flag mechanisms so information can’t be ignored.

Great companies have a simple and clear focus about who they are and where they are going. The “Hedgehog Concept”, comes from the Greek parable “The Hedgehog and the Fox”. The fox knows many things and the hedgehog knows one big thing. All good to great leaders are hedgehogs. They know how to simplify a complex world into a single focused mission. The company’s purpose is at the heart of how they operate. They know what they are passionate about. They know what they can be the best at. And, they know the economics of what drives the business, the “economic engine”. The Hedgehog Concept is an understanding of what you can be the best at. Simply put, leverage your gifts, measure progress and be deeply passionate about what you do.

Principle-
Disciplined Actions
Leaders must discipline themselves and the organizations to stop doing anything that doesn’t fit the Hedgehog concept.

George Rothman of Amgen understood that the company needed to avoid bureaucracy and hierarchy and instead create a culture of discipline. When you combine a culture of discipline with an ethic of entrepreneurship, you get a magical alchemy “of superior performance and sustained results.” The good-to-great companies built systems with clear constraints, but they gave people freedom and responsibility within the framework of the system. First get self-disciplined people who are engaged in very rigorous thinking, who take disciplined action within the framework.

Good to great companies used technology to accelerate business momentum, not to create it. Never begin a business transition with pioneering technology. You need to make the technology relevant to the purpose of your business and profit. Good technology only works well when it’s placed in the hands of good people.

Principle-
Cumulative Processes Lead to Success
“Good to great” comes about in a step by step fashion, action by action, decision by decision that adds up to sustained and spectacular results. The business pushes a “flywheel” slow and steady, gaining, momentum on the journey to grow and by profitable. There is not magic. Acquisitions are rarely the answers used for great companies. While you can buy your way to growth, you absolutely can’t buy your way to greatness. Two big mediocre companies joined together never make one great company. Rather, the successful companies chose sustainable transformations that followed a predictable pattern of buildup and break through.

“The real path to greatness it turns out, requires simplicity and diligence. It requires clarity, not instant illumination.”

This summary is compliments of Roth Consulting Group

Roth Counsulting Group, LLC
5914 Silas Moffitt Way, Suite A, Carmel IN 46033
ph: 317-843-9521 webmaster@rothcg.com

Best viewed in MS Internet Exployer and 800x600 or 1028x768 resolution

Creation and programing by