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Good to Great is the result of about 5 years of research by a team of ~20 researchers. They first identified companies they felt had gone from 'good' to 'great', then identified comparison companies that had not made the transition, and then attempted to identify characteristics of the 'good to great' companies.
I would sum up the 'good to great' path as presented in this book as: Management hires the right people, creates a culture of discipline and focus on the core business and it competitive advantage, lets ideas percolate up to management, and leadership implements them, reviewing success and path frequently, and changing course as necessary.
THE PROCESS
The researchers first culled a list of ~1,500 public companies to find those that had gone from 'good' to 'great' by looking at performance over time (a period of average returns, followed by a transition period, followed by a period of above-average returns). (Of course, it was more difficult than that, for example, controlling for companies in industries that were experiencing industry-wide growth).
They ended with a list of eleven companies and comparison companies. Next was the arduous task of reviewing publicly available data on each of those companies - press releases, newspaper clippings, interview, and the like to understand what was going on within each of the companies during this time period. Did they have a change in leadership? Were they actively pursuing a new strategy?
THE RESULTS
Some sample characteristics of a 'good to great' company:
- led by 'level 5 leaders' - leaders who are humble, who think the company's success is more important than his own success, more 'plow horse' than 'show horse'.
- focused on getting the right people onboard and using those people to collectively find the path to greatness rather than dictating a strategy and using whoever's available to fulfill that strategy.
- determined what the company is passionate about and what the company can become the best at.
MY TAKE
As with many books in this genre, I was disappointed overall. Maybe I'm disappointed by the messiness of the real world or maybe I expect too much. But even with a sample size as small as eleven, I felt as though some of the characteristics were forced on some of the companies.
And, as is almost always the case, this book is not a how-to, it's a way of thinking. As the author states many times, the companies didn't realize they were in transition until it was complete. If this is so, can a company attempt to make the leap from good to great based on the path of the example companies? Does knowing that you're trying to transition impact the effectiveness of the transition? And even if it doesn't, implementing the steps will be difficult. How can a company determine what its competitive advantage is, what it can be the best at? Who are the right people?
GOOD IS THE ENEMY OF GREAT
The most powerful piece of the book, for me, was the statement 'good is the enemy of great'. I hadn't thought about it that way, but I find it very telling. It's just another way of saying that there's diminishing returns on the level of effort you put into something, but phrased that way I find it very powerful. How often do I settle for 'good' when I could have 'great'? And, when does it make sense to settle for 'good'?
CIRCUIT CITY, FANNIE MAE
I was quite skeptical of this book and its processes - perhaps because, reading it a few years after its publication, I have a vantage point that the author didn't. Two of the companies included in the eleven 'good to great' list no longer exist. Circuit City has gone bankrupt and Fannie Mae was bailed out by the government. Within less than 10 years of its 'greatness', these two companies got into serious trouble.
This certainly gives rise to some questions over the methods and results.
