Good to Great - Jim Collins

Good to Great - Jim Collins

Are you interested in transforming the level of your organization? Understand why some companies make the leap to success, while others remain in mediocrity.

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Have you ever had the feeling that your company is stagnant? Or that you can't differentiate yourself in the market competition?

If any of these perceptions are part of your reality, the book “Good to Great” can help you. It says that some aspects inside your strategic planning can be optimized in order to change this scenario.

Here, the author Jim Collins basically looks forward to answering the question: “What makes a company stop being a good company to become an excellent company?”.

Keep reading and save your business!

About the book “Good to Great”

The book “Good to Great”, published in 2001, presents the results of a five-year study conducted by the author, Jim Collins and his team.

They have identified companies that have achieved lasting success after years of poor performance and have isolated the factors that differentiate these companies from their competitors.

Based on this, a model was developed to make a medium company stand out in its market. This model is explained in detail throughout the 9 chapters of the book.

Who is Jim Collins?

Consultant Jim Collins is author and co-author of a variety of books that, in total, have sold more than 10 million copies around the world.They are: “Built to Last”, “Great by Choice” and “How the Mighty Fall”.

Nowadays, Collins is currently giving lectures and consulting to executives from the corporate and social sectors.He also contributes with publications to the Harvard Business Review and Businessweek.

For whom is this book indicated?

The book's content is indicated for executives, investors, and managers interested in improving their organization.

It can also help entrepreneurs who already want to start their business by applying management and strategy best practices.

Finally, people with an interest in corporate culture, leadership practices and strategic planning techniques can benefit greatly from this work.

Main ideas of the book “Good to Great”

  • Success depends on the joint performance of three factors: disciplined people with disciplined thoughts taking disciplined actions;
  • Leaders play a fundamental role in the transformation of a company;
  • The foundation of success is putting the right people in the right places;
  • It is necessary to find the ideal activity of the company for it to follow a clear path to excellence. This is what the author calls "The Hedgehog Concept";
  • A well-established corporate culture is essential.

In this summary we will explain the 3 aspects that the author defines for a great company: disciplined people, disciplined thoughts and disciplined actions.

So, how about going to what matters? Let's go!

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[Book Summary] Good to Great - Jim Collins

First Aspect - Disciplined People

In this initial part of the book, the author explains the importance of people in the transformation of a company. This segment is divided into two topics: “Leadership Level 5” and “First Who, Then What”, let’s see them:

Leadership Level 5

Contrary to what you imagine, not every leader capable of transforming a company is that extroverted manager, with a strong personality and known to everyone, almost a celebrity.

In fact, the author's research team was shocked when they realized that the best leaders can be discreet, reserved and even shy.

Collins defines the main characteristics that successful leaders share, forming what he calls "Level 5 Leadership":

  • They are modest and humble;
  • They focus more on the success of their team than on their own success;
  • They are unshakable;
  • Their ambition is focused on the company's objectives, not on their personal growth.

According to the author, a level 5 leader is "an individual who combines extreme personal humility with intense professional will".

First Who, Then What

You've probably heard the sentence "people are a company's greatest asset". It makes a lot of sense, since valuing employees is essential to the success of an organization.

However, the author believes that this sentence is incomplete. Therefore, he makes a small - but fundamental - change: according to him the right people. actually, are the greatest asset of a company.

The research conducted by Jim Collins revealed that the companies that raised their standards could set up their dream team (who) before making strategic decisions (what).

The author makes a metaphor with a bus: first, you have to put all the right people inside the bus, then take out those who don't fit and then start driving the vehicle.

Second Aspect - Disciplined Thoughts

With the ideal team on board, the next step to make an excellent company is to work the mindset of the employees.

This segment of the book “Good to Great” talks about the need to be realistic and explains what the author calls "The Hedgehog Concept".

Let’s check what it means!

Be realistic, but never lose hope

Collins emphasizes the importance of being "brutally" honest when facing a difficult situation. According to him you have to accept reality to be able to overcome the challengesthat arise.

Thinking about it, the author suggests some tips to deal with difficult situations:

  • As a leader, involve your employees with questions;
  • Use dialogue as the main strategy to analyze the problem;
  • Listen to the opinions of everyone involved;
  • Build alert mechanisms capable of identifying emerging problems;
  • Never give people false hope, it will only discourage them.

The Hedgehog Concept

Based on a Greek fable, Collins defines excellent companies as hedgehogs: they are simple creatures who know how to do just one thing and focus on that.

Companies that do not reach this level of excellence are defined by the author as foxes: full of dexterity and capacity, but without consistency and focus. Do you prefer your company to be a fox or a hedgehog?

In other words, successful companies focus on what is essential and ignore everything that does not bring sustainable results.

To apply this teaching, the author suggests using the three-circle diagram. The circle shows that the "ideal activity" must balance three things:

  1. That what awake passion;
  2. That what moves its economic engine;
  3. That what you can be the best in the world at doing.

The Hedgehog Concept

Source: book “Good to Great”

Third Aspect - Disciplined Actions

Finally, the last aspect of the model tells about how actions should be carried out within a company aspiring to success.

This section of the book is divided into two topics, named “Discipline Culture” and “Technology Accelerators”, and they are what we’re gonna see next:

Discipline culture

Jim believes that building a culture makes disciplined people to take disciplined actions, always with the goal of keeping the company excellent in its core business.

A well-trained team facilitates the creation of an excellent corporate culture, as members are better aligned with the organization's vision and values.

To create a culture, the author suggests some practices:

  • Avoid bureaucracy;
  • Allow freedom and responsibility, this inspires the creativity and greater effort of employees;
  • Focus on The Hedgehog Concept, the ideal activity is the key to success;
  • Create a list of what should not be done, this ensures that people do not waste time on irrelevant activities.

Technology Accelerators

Nowadays, it is impossible for a company to be successful without the help of technology. But that doesn't mean that you should adopt any novelty and innovation that comes to the market.

Collins explains that the best organizations know how to study recent technologies and look for those that fit their main activity (once again, The Hedgehog Concept comes into play).

According to the author, after identifying the innovation, an excellent company can be a pioneer in the application of this new technology, creating a new market trend.

Other books about successful organizations

In the book “The Lean Startup”, the author Eric Ries, complements Jim Collins' idea about the technological accelerators. In the concept of Lean Startup it is possible to use technological resources to validate ideas and only then verify their viability.

The Hedgehog Concept can be understood and applied together with the concept written in “The Effective Executive”. For Peter F. Drucker, instead of doing several things at once, the company should focus intelligently on one goal at a time.

The book “The Secret to Peak Productivity”, from Tamara Myles, you can learn how to organize your workplace and choose the priority of your company. This way you can increase your companies’ productivity by focusing on a main goal.

Okay, but how do I apply Jim Collins' teachings in my company?

With the analysis of “Good to Great”, you can see some insights to apply in your daily life:

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Book 'Good to Great' Jim Collins