BOOK REVIEW
Ghazala Anbreen
Book Name:
Good to Great
Book by James C. Collins
This book was written by Jim Collins in 2001. Jim Collins, a consultant and a speaker from United States and was born in 1958. It is an influential business book and discovers the underlying variables that enable any type of organization to make the leap from good to great and also explores the reason why other organizations remain only good. This book examines what it takes for ordinary companies to become great and outperform their competitors, what it takes to build something that is world class organization and how to turn a good organization into an organization with sustained great results. This book is duly supported by evidence.
The concept of the book can be described in one word, “Discipline. Disciplined thought means to be aware of the facts. This book is about those companies which were good and then acquired the proportions of great companies afterwards. Wells Fargo is such an example which for fifteen years remained the best in the arena of finance. Part of the book focuses on enterprises and teaches us how to become better leaders. The basic concept of a leader is examined in detail and the book grabs the concept of a good to great leader as well.
The framework the writer suggests to enable organizations to move from good to great are in three stages.
Stage one: Disciplined people
Level One Highly capable individual
Level two Contributing team member
Level 3 Competent manager
Level 4, Effective leader
Level 5, Executive leaders (Their predominant attributes are humility and personal will). These leaders are always modest and down to earth.
According to author in order to become a great leader all these five qualities should be there. They take responsibilities for failures. They take tough decisions for the benefit of company’s benefits. Their whole ambition is for the growth of the companies not for their personal reasons.
First who then what
It means first to choose right people and then giving them the right role.
If a level four leader is given a bus and is asked for ten people in the bus and takes them somewhere then first he will think where he has to go. However, a level five leader if asked to take 10 people with him in the bus then first he will choose the ten right people and put them on the right seat. If some wrong person boards the bus, then he will remove him and take the right person and then all will collectively decide where they have to go. After going ten kilometers if they need to change the direction then the team will not be facing any problem. Right people are self- motivated people. In like manner if the wrong persons are there in your life then you will not be able to achieve anything in life. This level five management was there in every company which was a great company in the world. Author says that he interviewed all those leaders who belonged to good to great companies and all of them shared a commonality that they attributed the success to their team.
Stage Two: Disciplined thought
Stage three: Disciplined action
Jim Collins’ earlier book “Build to Last” was published in 1994 which raised some important questions. His book “Good to Great” answers these question that contribute to making the visionary leaders. This book helped the companies to stay visionary over decades. During the period of forty years 1435 companies were scrutinized and examined and then 11 companies were listed out. The answer to finding out the question as to what made these companies great was the answer to find the disciplined people, disciplined thought and disciplined action.
The Key Takeaways of the book
This book gives us an outline of the habits and practices that can help a company transition from good to great including:
1. Finding the hedgehog concept: The hedgehog with its simple defense strategy of curling up always comes on top and becomes untouchable as compared to the clever fox and snake who use different strategies.
To find your hedgehog concept, good to great companies must find out the answer to three questions.
1. What can we be the best in the world at?
2. Which things can we be passionate about?
3. What is the key economic indicator that we must concentrate on?
2. Success comes from many tiny incremental pushes in the right direction. The success of the companies revolves around many transformative processes. Success of the companies is because of their simple strategy and small steps combined together and these small steps lead to the results which help the companies to go ahead.
3. New technology should be taken as an accelerator towards the goal not as a goal itself. The writer advises to only adopt new technology if it helps to accelerate your momentum. Anchor, Musical.ly, Tick tock, snapchat, Instagram and twitter are the examples of innovations that flood the market with an incredible technology every year. But it is a fact that not all of them really benefit us. The implied lesson is that you may experiment with the new technology but do not jump without having a clear strategy. For example, Wall Greens very carefully crafted their online strategy to achieve the goal of becoming the best online pharmacy store and they offered online prescriptions for in-store pick up.
4. Leaders drive successful transformation from good to great. Collins discovered through his research that every company which went from good to great, its leadership was of level 5. Level 5 leaders are the best team members with single modality ambition. They are oriented towards results and are modest, understanding and always find the opportunity for appreciating their team members and for any negligence accept the responsibility instantly.
5. The right people in the right place is the foundation of greatness. Collins found that focus should be on finding good people with a good character. They can always be trained and educated and such people are helpful in creating an atmosphere where industrious people prosper and slow people are left behind.
6. Success requires confronting reality. Good to great companies have the ability of facing the hard realities and have a conviction about their victory.
7. During management meetings leaders should play the role of charismatic leaders and must create such an environment where the team members can communicate the unpleasant facts or mistakes without any hesitation.
The important lessons from the book can be enumerated as follows:
Lesson 1
The companies that go from good to great always go for consistently pushing the strategies which eventually make them come on the top. Some of the examples are Zappos and Walgreens.
Lesson 2
Always confront uncomfortable truth head on but never lose the faith that you work it out.
Realistic optimism is a habit which is shared by good to great companies. They do not ignore hard facts and do not despair. The book teaches us that when you are just not profitable enough to make it or your latest market campaigns do not work, accept it and deal with it. For example, when Procter and Gamble entered the paper goods market the situation looked pretty tough for the incumbent Scott Paper and Kimberly Clark. But while Scott Paper gave up the battle even before they began, Kimberly Clark on the other hand, took it as an opportunity. It rallied up the opportunity to compete. Twenty years later Kimberly Clark not only owned Scott Paper but they also outperformed the P&G in six out of eight categories.
There are some other real examples which help us in understanding the writer’s message. For example, he points out that great companies face the brutal facts. In US market both A&P and Kruger companies are two examples which used to operate low-cost general stores. The market share of A&P was more than 70 percent in early years of 1970. But when later the lifestyle of Americans started improving, the Kruger realized the changing lifestyles of the Americans and went with changing aspirations of the middle-class people. They introduced the barcode concept their stores. Eventually, in some years Kruger became a big company and A&P was on the verge of bankruptcy.
In 1960s Philip Morris and RJ Reynolds were two big tobacco companies in America. When in 1964 it was discovered after researches that tobacco causes cancer, it went for diversification and expanded in shipping and oil and became bankrupt but Philip Morris went on with their addictive business, like soft drinks and chocolate business and gave 4 times returns than before.
In short, this book is the output of the best research and teaches us how we can use the principles of great people in our personal live and is therefore, strongly recommended for reading.
