Good to Great

The study

Jim Collins' team analysed Fortune 500 companies over several decades and identified 11 that, after a period of average results, outperformed the market by a wide margin for at least 15 years. They were compared with companies in the same industries that did not make the leap. The findings appeared in Good to Great (2001).

Main findings

1. Level 5 leadership - humility combined with fierce resolve; see Level 5 leadership.
2. First who, then what - first the right people “on the bus” and in the right seats, then the decision where to drive.
3. Confront the brutal facts (the Stockdale Paradox) - named after Admiral James Stockdale, a prisoner of war in Vietnam: unwavering faith that you will prevail and, at the same time, facing the most brutal facts of reality.
4. The hedgehog concept - focus on the intersection of three circles: what you can be best at, what drives your economic engine (in social organisations, resources and mission) and what you are deeply passionate about.
5. A culture of discipline - disciplined people, thought and action, without excessive bureaucracy.
6. Technology as an accelerator, not a cause of success.
7. The flywheel - great change does not come in one move but through persistently pushing the “flywheel” in one direction.

Criticism

The study's methodology was criticised: companies were selected on outcomes, and some “great” companies later failed or weakened (Collins addressed this in How the Mighty Fall, 2009). The book nevertheless remains a valuable source of practical inspiration.

For social organisations

In Good to Great and the Social Sectors (2005) Collins showed how to apply these principles in non-profit organisations, where success is measured by mission and leaders often have little formal power. See Jim Collins.