Book Review- Good to Great by Jim Collins

This week's reading is Good to Great by Jim Collins. It's an old book, published in 2001 (yes, I feel old) that looked at companies that had 15 years of great success outperforming the stock market. It is interesting that only one is still great and many don't exist. It makes it hard to imagine the advice still applies to the modern world, but I think there is wisdom. A specific type of leader was present at the helm of all the long-term best companies.

The type of leader was humble, stubborn, focused, disciplined, and responsible. They credit their wins to luck and the team, their losses to themselves. The type of leader that always failed eventually, was egocentric, vainglorious, or a genius. Their success never outlasts them because systems relied too much on them. Their failures were luck, and their successes belonged to them alone.

If you ask CEO's what portion of their company's success they are responsible for, the median response is something like 30%. Setting aside that this is a mathematically unlikely answer, the people who built consistently best results from 1980-2000 would NEVER have assumed so much self-worth.

The great leader from these studies focused on putting great people together (tossing out the wrong ones) and figuring out direction with that team, never the reverse. They focused on learning truths and facts and adjusting strategy accordingly. The great leaders created extreme focus. They answered the question of what they can be best in the world at, they focused in on the corresponding profit engine, and they grew passion for those two things alone, even if it meant painful cuts.

For me, the most interesting finding is the nature of discipline. All companies had some version of it, but the great companies had discipline without bureaucracy. The secret is in their definitions. True discipline comes from inside the people themselves. They did the right things right, even without rules. Bureaucracy, or discipline imposed by an outside force, was always seen as compensating for incompetence and a sign that people were wrong for the company.

While well written and an interesting read, the best takeaways from the book are probably what they didn't find in the studies. When they looked at top performing companies, they did not find any correlation to: External leaders, celebrity executives, correlations to compensation, technology, mergers, acquisitions, change management, organizational development, structural patterns, marketing campaigns, or industry tailwinds. 

What they found instead, they call the 'Flywheel,' better paraphrased as devices for sustaining positive momentum. People want to be on a winning team and a leader who creates sustained winning, suddenly has a lot fewer internal problems and the best people are moved to opportunities, rather than fixes.