In Good to Great, Jim Collin analyzes the factors that distinguish the great companies from the good ones. He identified key principles and practices that explain why some companies make the leap and others don’t.
1. Level 5 Leadership: The research showed that the good-to-great companies were led by Level 5 leaders. These are executives who are both humble and willful, who display a powerful resolve to do whatever it takes to make the company great.
2. First Who, Then What: The good-to-great companies started by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. They were then free to move the bus in the right direction.
3. The Hedgehog Concept: The good-to-great companies were clear about three things: 1) What they could be the best in the world at; 2) What drove their economic engine; and 3) What was their emotional or spiritual purpose.
4. A Culture of Discipline: The good-to-great companies had a culture of discipline, which helped them stay focused on their goals and resist the temptation to pursue the latest fad.
5. Technology Accelerators: The good-to-great companies used technology as an accelerator, not a driver, of their success. They were disciplined about which technologies to adopt and when to adopt them.
6. The Flywheel and the Doom Loop: The good-to-great companies built momentum by starting with small wins and then using that momentum to achieve larger wins. The companies that failed, on the other hand, tended to get stuck in a doom loop of decline.
7. The Stockdale Paradox: The good-to-great companies faced the brutal facts of their situation, but they never lost faith that they would eventually prevail. This combination of realism and optimism is what Collin calls the Stockdale Paradox.
8. The Importance of Preserving Core Values: The good-to-great companies were clear about their core values and were unwilling to compromise them, even in the face of adversity.
9. The Big Hairy Audacious Goal: The good-to-great companies had a clear and inspiring goal that focused their efforts and helped them persevere through difficult times.
10. BHAGs and Change: The good-to-great companies didn’t just set big goals, they also made sure that their goals were aligned with their core values. This helped them to resist the temptation to pursue unrelated goals that would have taken them off course.
Conclusion:
The good-to-great companies had a clear and inspiring goal that focused their efforts and helped them persevere through difficult times. They were also clear about their core values and were unwilling to compromise them, even in the face of adversity. These factors helped them to resist the temptation to pursue unrelated goals that would have taken them off course.