The book " Good to Great " starts at a dinner table. The author Jim Collins and Bill Meeham ( MD of Mc Kinsey & Co, San Francisco) discuss about his previous book "Built to Last". Bill opines that the book was very well written, he loved it; but the book was "useless". Bill terms it as useless due to the reason that the book dealt with were great companies that for most part, they were mostly great.
The base of the research for the book are the publicly traded companies in the US in the years 1985-2000.
The examples that have been selected are companies that have an average cumulative stock return value of 6.9 times the market in 15 years. Few companies yielded this kind of results. To name a few of the selected ones: Abbott, Gillette, Wells Fargo and Kimberly Clark.
These companies were measured against two sets of companies:
1. Direct Comparison: Those that had same resources, same opportunities and belonged to the same industry. Ex: Wells Fargo and Bank of America
2. Unsustained Comparisons: Those that did rise and failed to sustain the growth.
Few black box research points, that was common in all the companies:
1. No larger than life / Genius CEO's.
2. Pay was not the criteria.
3. Strategies were not too different.
4. Focus was on "Do what was important and immediate - you will be doing the impossible".
5. Technology can accelerate a transformation, but cannot create a transformation.
6. Mergers and Acquisitions - do not create great companies.
7. Concentrated on creating right conditions. Not on motivating people, managing change and alignment.
8. No launches or hung-ho about transformation. Revolutionary leap in results; not necessarily by a revolutionary process.
9. These companies did not belong to an industry that sky-rocketed in this period.
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Brief of the figure: Concept from Chaos
- Level 5 Leadership: Quiet, reserved and even shy. For example: Lincoln and Socrates kind.
- First Who Then What: Select the right people and then the direction.
- Confront Brutal facts: Stockdale Paradox:- Relates to unwavering faith and an eye for reality.
- The Hedgehog Concept: If the core business is not the best, the company cannot be one.
- The Culture of Discipline: Hierarchy, Bureaucracy and controls are not needed in this environment.
The flywheel and doom loop: No single defining action, no grand program, no killer innovation, no miracle moment; but relentless push of the flywheel turn after turn building momentum was the key.
These are some points. The next chapters will deal with the topics touched in "Concept from Chaos".
Happy reading ... I shall share as I read.
Source: Good To Great - Jim Collins
