Good to Great: Why Some Companies Make the Leap . . . and Others Don’t
REVIEW BY FABRIZIO BALESTRI
© 2001, Jim Collins
(From the book jacket): Based on a five-year research project, Good to Great answers the question: “Can a good company become a great company, and, if so, how?” True to the rigorous research methodology and invigorating teaching style of Jim Collins, Good to Great teaches how even the dowdiest of companies can make the leap to outperform market leaders the likes of Coca-Cola, Intel, General Electric, and Merck.
WHO SHOULD READ THIS BOOK:
Leaders of companies large and small who wish to transform their organizations from good ones to great ones. Business owners who wish to manifest real change within their organizations and reach new heights of success and productivity.
WHY THEY SHOULD READ THIS BOOK:
There are countless books on how to build a better business or create a smarter team. None have the research, insight and clear-sighted vision of Jim Collins’ groundbreaking work, Good to Great. The book breaks down what companies did to transform themselves from good companies into great organizations. Good to Great provides multiple case studies and examples of how some were able to make this extraordinary transition, and others were not. In every situation, it came down to leadership. Most interestingly, it was not always about the guy at the top, but it had to start with the guy at the top, for real change to be possible. All the great companies defined in the book had one thing in common; they all had level five leaders. According to the book (and Collins’ site, www.jimcollins.com), “level five leaders channel their ego needs away from themselves and into the larger goal of building a great company—their ambition is first and foremost for the institution, not themselves.”
At the time I read the book, I was leading a very successful subsidiary of a financial services company that had recently been acquired. The acquiring company wanted us to transform our business into a top five company within five years, in a market occupied by industry giants like Sallie Mae and Citibank. The company motto became “Top five in five”. Sounds like a wonderful goal to strive for, but when one is sitting at number 22, the task can be rather daunting.
The first thing we set out to do was to bring the leadership team together and brainstorm on a strategy that would lay the ground work or plan to achieve this lofty goal. One of the members of my leadership team had given me the book Good to Great as a Christmas gift a few months earlier, but it wasn’t until I found myself on a lengthy cross-country flight that I decided to forgo the in-flight movie and begin reading the book. I found myself so riveted that I was highlighting something on every page. I was particularly struck by the very consistent attributes that good companies possessed, how they made their decisions, and how they viewed their employees.
I immediately set off on a quest to transform our very good company into a great one. Within one week of reading the book, I had an outline and a plan. First, I acquired a copy of the book for every member of my leadership team and gave them two weeks to read it and be prepared to discuss how we could use the lessons to take our organization to the next level. Next, I scheduled a three-day offsite meeting with the group to build a plan that would get us on the track to accomplish the goal of “Top five in five”.
Our first order of business was to do some inner searching and honestly see what we had to do to become level five leaders. Next, we had to closely review our entire organization to ensure that we, as Jim Collins put it, “put the right people in the right seats on the bus”. It is not enough to have the best people; they have to be doing what they are best suited for to help the organization. If they are not, as a leader you must find another seat for them or get them off the bus. The exercise proved to be invaluable as we were able to identify many talented employees who simply were not in the right seats on the bus. We were able to re-align ourselves to take full advantage of the talent we had. The most significant change was with one of the members of my leadership team. I had known for some time that the person was not best suited for management, but had put off making a change. Nearing the end of our offsite, the person approached me and volunteered that they had not been happy in their management role and wanted to move back to being a sales representative—in reading this book, they were able to reach that decision on their own. At that point, I knew we were on to something. As a leadership team, we argued and debated ferociously, but once we reached agreement and had a plan to execute, we got on the same page and began our quest.
Jim Collins got it right. After the first year, we moved from 22nd to 16th position. By the third year we had broken through the top ten, and became the eighth largest player in the student lending industry with two years left to achieve our goal of “Top five in five”.
KEY TAKEAWAYS FROM THE WORK:
- There are five levels of leadership—and all the great companies had “Level Five” leaders.
- Great companies’ leadership teams argue and share dissenting views, but once consensus is reached and a decision is made, they are all on board to execute the final plan.
- It’s not just about getting the right people on the bus; it’s about getting the right people in all of the right seats on the bus.