Good to Great Book Summary with Important Factors for Being Great
This book is a management book by Jim C. Collins. These genre books are generally for investors, managers, or businesspersons and for those who want to build their own businesses.
In this book, the author formulates how companies change from being good companies to great companies and how most companies fail to make the transition.
The book was a bestseller, selling four million copies and going far beyond the traditional audience of business books. That book was published on October 16, 2001
So, here’s a summary of this wonderful book Good to Great
Best Quote From Good to Great book:
Good to Great examines what it takes for ordinary companies to become great and outperform their adversaries by evaluating 28 companies over 30 years, that managed to make the growth or fell prey to their bad habits.
Good is the enemy of Great
Being good rather than great is wrong, so the book is about being great. Good is the enemy of great because it’s easy to stay good but hard to work for being great, many companies don’t even try to be great. There’s not striving to be the best in the industry, this opens the door to a competitor.
So, the author gives us an example of Kimberly Clark companies, who was manufactured paper-based products in 1971 stock of this company decreased by 36% and they faced a big loss in their marketing but in that year Darwin Smith joins the company as a CEO post and he makes this company a best leading company because he follows level 5 leadership strategy.
6 key principles for being good to great
Principal 1: First who then what
In this principle good to great leaders never make strategies before hiring the people they first hire and then they plan what to do.
It’s not just a quality of leadership that is important to be great. The quality of all other people in the team is equally important.
What does first who then what mean?
It’s very opposite of what we normally think of planning as being. it means that you don’t decide what you want to do and then get the people you need to do it instead, you start by getting the right people into the organization and the wrong people out.
“It doesn’t make sense to hire smart people and then tell them what to do. We hire smart people so they can tell us what to do” said by (step jobs.)
There’s 3 advantage of this principle:
- You will be able to choose a better direction.
- No need to motivate employees.
- Without the right people, you can’t make a great company.
The author said that “the right people are our most important asset”.
Good to great company always follow three rules:
- When in doubt, don’t hire to keep looking.
- When you know you need to make a people change act.
These two questions will help you to understand this:-
1. Would you hire that person again?
2. If that person tells you that he is leaving would you be happy or upset?
- Put your best people on your biggest opportunities, not your biggest problem.
Good to great companies also hire their best people in their best places with more potential.
Principle 2: confront the Brutal facts
This principle tells us to face the facts and accept them.
If you have level 5 leadership, and you have the true people then the whole organization is able to settle company accomplishments ahead of their own ego. This facilitates you to contradict the brutal facts, without forfeiting faith that the company will be profitable.
Great results can only be attained when you make a lot of good decisions and then enforce well. To sort good decisions you need to contradict the facts, even if those facts are brutal and uneasy. To avoid impairing the facts you need an environment where the truth is approved.
Principle 3: The Hedgehog Concept
In this principle, leaders have a simple understanding.
“What your company is doing and can be the best in the world at”.
Good to great companies behave in a similar way to a hedgehog. They stick to doing what they are best at and avoid getting distracted with, with even great companies having to fight to stop this from happening.
How to find the hedgehog concept
- What you can be the best in the world?
- What drives your economic engine?
- What are you deeply passionate about?
Principal 4: A Culture of Discipline
This principle tells us how to fulfill their obligations, freedom to talk respectfully and do the task at their right time.
To go from a good company to a great company, you need disciplined people, disciplined thought, and disciplined action.
A culture of discipline means having the organization full of people who will take action consistent with the hedgehog principle. Don’t make the mistake of many executives mistake control for discipline.
Create a stop doing list
Create a list of things you will stop doing so you can better focus on your hedgehog concept.
Change the way you plan. Rather than thinking which programs should get which people, think which project favors your hedgehog concept. Those that do get more allocation. Those that don’t support the hedgehog concept get less funding or are ditched.
Principal 5: Technology Accelerators
Good to great companies think about technology in a different way. They will invest in new technology only if it serves their hedgehog concept.
This principle says if the technology doesn’t match your hedgehog concept you can ignore it
Principal 6: The Flywheel and the Doom Loop
The flywheel affects a quiet and deliberate process of figuring out what needs to be done for best future results and taking those steps one by one, pushing the flywheel in a consistent direction until it achieves a breakthrough point.
Great company achievement is not sudden action it continuous action, consistent action took time.
The Doom Loop
The doom loop is the opposite and it is how bad companies do things.
They begin with a great idea or a flicker of brilliance. But then they work on it, intermediate lending only periodic big pushes. These huge efforts are tiring. Over time their intermittent essences lead to poor outcomes.
This turn results in the firm switching to a modern idea because the last one didn’t work out the way they wanted. Each time they swap ideas momentum is lost.
These corporations completely stop striving to build momentum instead they are concentrated on having a breakthrough and never succeed.
The ultimate key to recall in this flywheel analogy is that each push on the flywheel builds on all the last thousands of pushes and shifts you one step near to going from good to great.
Altogether good to great is an ultimate classic business book and one that we recommend to you and every entrepreneur. So read it and understand it.
Sourabh Sharma is a hobbyist book reader, Entrepreneur, and a literature student at Delhi University. A blog writer by day and a book reader by night, he is oathed to discuss himself in a third person but can be persuaded to do so from time to time.