Good to Great - Book Report/Review Example

 Good to Great Introduction Jim Collins opens Good to Great with a very interesting and significant quote ‘Good is the enemy of great’. Collins argues that the major reason why some companies take the leap and become great while others don’t is simply because good is the enemy of great. This basic quote can be used to broadly summarize Collins’ whole book. However, a closer analysis of the book is necessary in this paper. As such, the paper will analyze and discuss three vital ideas highlighted in the book. Subsequently, there will be a critical analysis of the book. Lastly, the paper will evaluate and discuss three applications emanating from the book’s ideas. Body The book is characterized by comprehensible example, precise thinking and information to back up the conclusions. The author and his researchers contrasted and compared on how some companies transformed from being Good to Great while other companies were unable to take the leap. It implies that entrepreneurs, leaders and CEOs should show evidence of the effort and discipline required to transform a good company to a great company. Collins highlights three significant stages, each characterized with 2 key concepts. The six concepts form the basis of his book. He further dedicates a chapter to each of the key concepts in order to offer critical insight about them. The key concepts are; level 5 leadership, confront the brutal facts, first who then what, a culture of discipline and technology accelerators, and the hedgehog concept. To come up with these concepts, Collins did research on some of the Good to Great companies such as Circuit City, Abbott, Gillette, Fannie Mae, Kroger, Philip Morris, Walgreens, Wells Fargo and Pitney Bowes. Contrary to popular belief that people are a companies’ most vital asset, the research illustrated that the right people are the better people. This can be translated to mean that a leader has to first get the right individuals on the bus while dropping the wrong people, and then deciding later where and when to drive the bus to. The three most vital points from the book are; Level 5 leadership This is a concept that separates good firms from great firms or companies. Under this concept, he (Collins) describes leadership in five levels where a level 1 is represented by a very capable person while level 2 is characterized by a team member who is a great contributor. A competent manager is classified under level 3 whereas a leader who is very effective represents level 4. A CEO who injects greatness into the company via a paradoxical blend of professional will and personal humility represents level 5. As such, a level five leader displays a strong sense of modesty while being self-effacing. Leaders possessing gigantic personal egos were the major contributors to the demise or poor performance of two thirds of the companies (Collins, 2001). Level 5 leaders are self-driven. Additionally, they possess an incurable urge to produce sustainable and excellent results. With this urge, they tend to do whatever (no matter how hard or big the decisions) they need to do in order to transform a good company to a great company. According to Collins (2001), the tendency by companies to choose dazzling and flashy celebrity leaders instead of selecting level 5 leaders is one of the most dangerous trends in recent history. This tendency is mostly practiced by the board of directors while selecting a leader. People who can make good level 5 leaders exist all around us. People only need to know what to search or look for. Although the research team was not focused on finding level 5 leaders, the evidence emanating from the collected data implied that they (level 5 leaders) were an integral part in turning a good company to a great company. This finding is not an ideological but rather an empirical finding. This leader has a combination of both personal humility and strong will. Consequently, he/she depicts unwavering resolve in setting the required standards for turning companies from good to great. To achieve this feat, the level 5 leader channels ambition and a direction sense into the company in addition to relying on the set standards. Most importantly, a level 5 leader does not channel ambition and pride into the self. He ‘looks into the mirror and not out of the window’ when dealing with responsibility matters. Additionally, he doesn’t praise himself but rather apportions success credit to others. A level 5 leader is often driven by neither fear nor ego hence his/her energy becomes balanced. They subscribe to the philosophy that ‘the less you control, the more you can do’. To be great leader, an individual has to be an energy conduit rather than an energy generator. In regard to level 5 leadership, Collins posed a significant question; can level 5 leadership be learned or taught? They answers are both yes and no. this signifies that some people are gifted with these great abilities therefore, they possess a head start. However, for most level 5 leaders, they have learnt and hence grown into their roles as level 5 leaders. Unlike the flashy leaders, it is quite interesting to note that most level 5 leaders do not lead extravagant lives. Most of them have good community and family relationships. Subsequently, they had long term and healthy marriages. Lastly, level 5 leaders attributed company achievement to proper seizure of opportunities rather than to the efforts that they have invested in order to achieve the results. Confront the brutal facts Collins focuses on the Stockdale paradox. Through sheer determination, admiral Stockdale survived for a very long time as a prisoner in Vietnam. This paradox compares and contrasts those people who operate by the ‘you can do it if you dream it’ slogan with those individuals who aim at a realistic objective or goal. Regardless of the toil and struggle, retrain your mind that you will succeed in the end while not shying away from your reality’s most brutal facts. This concept states that: first, rather than leading with answers, lead with questions. Second, engage in debate and dialogue but not coercion. Third, conduct autopsies with no blame. Fourth, construct red flag mechanisms that make sure information is not ignored. Another vital attribute of these leaders is that they always surround themselves with courageous hardworking individuals who were not afraid of facing the brutal facts. These leaders possessed faith in their endeavors that they will succeed in the end. The analyzed companies never strayed from their objective but stayed on course by imposing strict standards on the employees. New employees had two choices; either fit into the company or get fired. As such, the companies transformed from Good to Great through sheer determination and perseverance. This step implies that no matter how optimistic an individual is about the future, they have to confront he future regardless of how brutal it is. Although this is a simple concept, its not an easy one. Most people have an idea of this concept. However, very few individuals understand it. A company’s management has to stay focused and calm irrespective of how cruel the reality is. Suffice to say, management considers the brutal reality s a motivation and challenge for them to strive towards success. As such, a great company can be also termed as a brave company.an effective management knows that they cannot make the right decisions at all times. They have to err sometimes. Confronting this reality is pivotal for the success of the company. All great companies took the first step to greatness by facing the brutal facts of their present reality. A company cannot make good decisions while avoiding the brutal facts. For example, a Good to Great leaders do not apportion blame for mistakes committed but rather they take an honest view at the decisions which resulted in the mistakes. Thus, Good to Great companies do not have access to better information than other companies; they just accord their customers and people access to enough opportunities that may sometimes act as an early indicator of existence of deeper problems. In conclusion, in order for a company to from being a good company to a great company, it has to confront its brutal facts. The hedgehog concept This is the value the Good to Great companies possess. In its basic form, this concept can be taken to mean that the great companies continue to operate as hedgehogs no matter the changes occurring in the social and business environment. Therefore, they continue sticking to their concepts and hence being the industry hedgehogs and not foxes. Collins mentions three elements which form the core of the hedgehog theory. Firstly, the company has to know where it can perform best. Secondly, the management has to figure out the economic drive of the company. Thirdly, what is the leadership most passionate about? These are the basic tenets of the hedgehog theory. I find this concept important simply because if a company cannot excel in its main business or endeavor, then its main business cannot be its core business. In order to become great, a company has to surpass other companies by excelling in its core business. Collins defines a core business as a business that a company possesses the potential to outcompete other companies. Additionally, a company’s core business is significant since no company can grow and become great if it does not excel (generate profit) from its core business. Therefore, a company has to generate more revenue than its competitors in order for it to become a great company. As such, the key to success lies in finding a balance between the three ideas of the hedgehog concept. A company has to know where it has potential to succeed followed by what it feels passionate about. Lastly, the company’s profitability must be significant so as to drive its economic success. Critique and applications Collins does a splendid job in analyzing the few chosen companies. However, by generalizing the findings to all companies is the study’s major weakness. His sample size was too small. Out of 1435 companies, Collins trimmed them down to 11 companies. He should have focused on a larger sample size in order to increase the accuracy of his findings. Collins focuses on people, thoughts and action as the vital elements that will take my life and career from good to great. I should find the right people to associate with. People who do not add value in life should be dropped. Positive thoughts are necessary to get a person from good to great. By thinking positively, one can therefore confront he brutal facts head on. This will lead to an individual making the right decisions. Lastly, for me to move from good to great, I have to take action. Making recommendations and staying positive without taking any action is a futile and useless exercise. As such, I have to find the right people, confront the brutal facts and take action in order to move from good to being great. References Collins, J. C. (2001). Good to great: Why some companies make the leap... and others don't. Random House. Read More