Good to Great: Why Some Companies Make the Leap and Others Don't Hardcover – Unabridged, October 16, 2001

Jim Collins uses a systematic approach to look in depth into these companies and see what really makes them great. With that said, there are a couple companies that should either be reevaluated or may have not “keep up with the times”. Case in point, Circuit City & Fannie Mae. Though business is volatile and anything can happen but with as much analysis as his team should have done, there should have been some sort of “take away” from this. The book has many one liners that make remembering key points easier. Using his criteria for the “good to great selection process” makes his data and analysis much more substantial then someone just spouting what they “feel” makes a great company.

This is still, form my point of view, a great book to read as there are many things that are very useful. Jim references the UCLA bruins winning a NCAA championship and remarking that even though their coach John Wooden was a legend he had coached the team for 15 years before their first championship. Greatness takes time to mold and create and doesn’t happen over night. What I took as some of the best advice, “…every good-to-great transformation followed the same basic pattern – accumulating momentum, turn by turn of the flywheel – until buildup transformed into breakthrough.” The book is filled with many motivational and good forms of advice to follow which can in fact help drive a good company to greatness.

Jim Collins’s Good to Great- Shows how American companies struggle to get out of the “B zone” of mediocracy and become the best. He compares and analyzes good companies against the great ones with data, charts, and graphs and even from the viewpoints of Admiral Stockdale, “Where life is unfair, and what matters is how we deal with life’s difficulties.” Shows how level five leaders respond to chaos when monopolies become exposed to competition, by using their paradoxical mix of personal humility and professional will towards their company not themselves. I was not totally sold on his “flywheel” concept, where consistency and more importantly coherence to me just seems obvious especially with the fact that results always build momentum. His analysis does not manifest in the discovery of numbers that overlap and expose a secret sauce to me, however it does provide good insight of what it takes to improve a company. What is interesting is that he does touch upon finding meaning and or passion somewhere in your life, if not in the corporate world your greatness maybe somewhere else, but to find it.

This book was written and researched during the roaring 1990s when profits piled up faster than leaves in the autumn where I live. Jim Collins, who wrote another book thousands have read, led the research team that set out to find out why the highest performing companies outperformed their competition. He did this by saying it was the result of a laundry list of characteristics from having humble CEOs recruited from inside the company to not particularly paying attention to technology to hiring the right people to get the job done.

While all these attributes may contribute to succeess, the falure of this book was presaged in its first chapter, on pages 14-15 of the hardcopy version, where it asks and answers the mock question: "Will your findings continue in the new economy? The truth is, there's nothing new about the new economy." Anyone that had money in the stock market in September 2008, especially those that held stock in General Motors, knows the "new" economy is much different than the one anyone's seen going back to 1930. And all Collins' exemplars in this book bit the dust -- most doing so long before 2008.

Collins proof is in the pudding exemplars are 11 corporations whose stock values shot up at twice the rate of their competitiors during his period of research in the bamboozled economy of the 1990s that burned white hot. Today, less than two decades later, two of those companies are out of business, one has been liquidated, another had been bought by a bigger corporation, and all but one of the 11 had serious stock value declines by 2006, before the market meltdown of autumn 2008. Wells Fargo, the hero of chapter three, saw its stock value decline so greatly in the 2008 market meltdown that it became the poster boy company for federal bank bailout money the next year.

This chapter, and this company, are highlighted as successful leaders that bought out a similar bank, then got rid of all its employees. While such work was commonplace in the takeover mania of the 1980s, it was rarely heralded as find business practice anywhere but in this "study." Collins crew says Wells Fargo handled it properly because the people from the other bank wouldn't fit into the new company's business culture. The expeditious departure of long-time employees reminded me of Jimmy Hoffa's line in the movie of the same name Hoffa. Once elected international Teamsters president, Hoffa (nee Jack Nicholson with a bad haircut) turned to his assistant and told him, You're going to fire half these yokels tomorrow. Don't put it off so the other half will be secure and stay loyal." While this happens in business all over the world, there's no reason to suggest it is a good practice.

The bigger failure of the book is what actually happened to Collins' 11 exemplars of rising stock markets values. I looked at the stock values of each of the companies (the ones still in business) and all went backwards less than 15 years after this famous book -- and its recipe for success -- were written. Maybe the research team would say the management teams changed; otherwise, how can this book still be relevant as a model of business success in 2010? I think probably because the advice given is superficial, contradictory, and be can interpreted differently enough by any reader that is can be germane in the post-9/11, post 2008 recession world.

Fortunately, you don't have to read this book to understand what these are. The precepts of success in business are the same today as they were in the earlier days of the free market -- hard work, market segmentation and differentiation, effective capitalization, high risk/reward ratio, and dedication to customer service. Most of those values and practices aren't cited herein and you can largely ignore the ones that are.