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Jim Collins

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

by Jim Collins (Author)

3,764 ratings

Book 1 of 6: Good to Great

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The Challenge:
Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the verybeginning.

But what about the company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness?

The Study:
For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?

The Standards:
Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies, including Coca-Cola, Intel, General Electric, and Merck.

The Comparisons:
The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to make the leap from good to great. What was different? Why did one set of companies become truly great performers while the other set remained only good?

Over five years, the team analyzed the histories of all twenty-eight companies in the study. After sifting through mountains of data and thousands of pages of interviews, Collins and his crew discovered the key determinants of greatness -- why some companies make the leap and others don't.

The Findings:
The findings of the Good to Great study will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include:

Level 5 Leaders: The research team was shocked to discover the type of leadership required to achieve greatness.
The Hedgehog Concept: (Simplicity within the Three Circles): To go from good to great requires transcending the curse of competence.
A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results. Technology Accelerators: Good-to-great companies think differently about the role of technology.
The Flywheel and the Doom Loop: Those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap.

“Some of the key concepts discerned in the study,” comments Jim Collins, "fly in the face of our modern business culture and will, quite frankly, upset some people.”

Perhaps, but who can afford to ignore these findings?

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Editorial Reviews

Amazon.com Review

Five years ago, Jim Collins asked the question, "Can a good company become a great company and if so, how?" In Good to Great Collins, the author of Built to Last, concludes that it is possible, but finds there are no silver bullets. Collins and his team of researchers began their quest by sorting through a list of 1,435 companies, looking for those that made substantial improvements in their performance over time. They finally settled on 11--including Fannie Mae, Gillette, Walgreens, and Wells Fargo--and discovered common traits that challenged many of the conventional notions of corporate success. Making the transition from good to great doesn't require a high-profile CEO, the latest technology, innovative change management, or even a fine-tuned business strategy. At the heart of those rare and truly great companies was a corporate culture that rigorously found and promoted disciplined people to think and act in a disciplined manner. Peppered with dozens of stories and examples from the great and not so great, the book offers a well-reasoned road map to excellence that any organization would do well to consider. Like Built to Last, Good to Great is one of those books that managers and CEOs will be reading and rereading for years to come. --Harry C. Edwards

From Publishers Weekly

In what Collins terms a prequel to the bestseller Built to Last he wrote with Jerry Porras, this worthwhile effort explores the way good organizations can be turned into ones that produce great, sustained results. To find the keys to greatness, Collins's 21-person research team (at his management research firm) read and coded 6,000 articles, generated more than 2,000 pages of interview transcripts and created 384 megabytes of computer data in a five-year project. That Collins is able to distill the findings into a cogent, well-argued and instructive guide is a testament to his writing skills. After establishing a definition of a good-to-great transition that involves a 10-year fallow period followed by 15 years of increased profits, Collins's crew combed through every company that has made the Fortune 500 (approximately 1,400) and found 11 that met their criteria, including Walgreens, Kimberly Clark and Circuit City. At the heart of the findings about these companies' stellar successes is what Collins calls the Hedgehog Concept, a product or service that leads a company to outshine all worldwide competitors, that drives a company's economic engine and that a company is passionate about. While the companies that achieved greatness were all in different industries, each engaged in versions of Collins's strategies. While some of the overall findings are counterintuitive (e.g., the most effective leaders are humble and strong-willed rather than outgoing), many of Collins's perspectives on running a business are amazingly simple and commonsense. This is not to suggest, however, that executives at all levels wouldn't benefit from reading this book; after all, only 11 companies managed to figure out how to change their B grade to an A on their own.

From Booklist

Collins is coauthor of Built to Last: Successful Habits of Visionary Companies (1994), the widely heralded book that was the result of a six-year research project conducted by Collins and Jerry Porras. They identified 18 companies that met their rigorous standard for long-term performance. They looked for companies that had outperformed the stock market by a factor of 15 starting from 1926. Then they went about the task of identifying what these companies had in common. Now Collins turns his attention to companies that have made the transition from "good to great." This time the findings are backed by five years of research and data analysis. Starting with every company that ever appeared in the Fortune 500, Collins identifies 11 companies that had 15-year cumulative stock returns at or below the general stock market when, after a transition point, they then demonstrated cumulative returns of at least three times the market over the next 15 years. Collins then looked for similarities among the companies. What he found would both surprise and fascinate anyone involved in management. David Rouse
Copyright © American Library Association. All rights reserved

Review

One of the top ten business books of 2001 (Business Week)

About the Author

Jim Collins is a student and teacher of what makes great companies tick, and a Socratic advisor to leaders in the business and social sectors. Having invested more than a quarter-century in rigorous research, he has authored or coauthored six books that have sold in total more than 10 million copies worldwide. They include Good to Great, Built to Last, How the Mighty Fall, and Great by Choice.

Driven by a relentless curiosity, Jim began his research and teaching career on the faculty at the Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. In 1995, he founded a management laboratory in Boulder, Colorado.

In addition to his work in the business sector, Jim has a passion for learning and teaching in the social sectors, including education, healthcare, government, faith-based organizations, social ventures, and cause-driven nonprofits.

In 2012 and 2013, he had the honor to serve a two-year appointment as the Class of 1951 Chair for the Study of Leadership at the United States Military Academy at West Point. In 2017, Forbes selected Jim as one of the 100 Greatest Living Business Minds.

Jim has been an avid rock climber for more than forty years and has completed single-day ascents of El Capitan and Half Dome in Yosemite Valley.

Learn more about Jim and his concepts at his website, where you’ll find articles, videos, and useful tools. jimcollins.com

Item Weight : 1.1 pounds
Hardcover : 400 pages
ISBN-10 : 9780066620992
ISBN-13 : 978-0066620992
Dimensions : 6.13 x 1.05 x 9.25 inches
Publisher : HarperBusiness; 1st edition (October 16, 2001)
ASIN : 0066620996
Language: : English

Best Sellers Rank: #1,390 in Books (See Top 100 in Books)
- #1 in Strategic Business Planning
- #2 in Systems & Planning
- #3 in Company Business Profiles (Books)

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Carey J.

Time has given this book a black eye

Reviewed in the United States on October 2, 2018

Verified Purchase

Overall the content is decent, but Time has given this book a black eye. Some of the companies touted as models to follow are in dire straits now or went out of business. Fannie Mae, praised as one of the banks to go Good to Great, has fallen into the trash heap since 2008 and has never recovered. This happened 7 years after the book was written. Circuit City, another Good to Great, doesn't even exist anymore, at least by name and as a brick-n-mortar store. Wells Fargo, a good to great awardee, aren't so noble anymore given their recent scandals. In the 2010's, Wells Fargo perpetrated some of the poor behaviors the book claimed they avoided through the 80's and 90's which led them to Great. The book is VERY well researched in its time frame, but a lot of it in my opinion is antiquated. 90% of the data is taken from the pre-Internet era, the ball field is much different now. Some of the points are valid and helpful, some are senseless. I did glean a few nuggets from the book that made it worth my time, but 1/3 of the way through this book I dreaded finishing it. You'd be better reading Simon Sinek's Start With Why.

253 people found this helpful

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science_mom

Great companies turned out to be cheating...

Reviewed in the United States on June 25, 2018

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It's hard to know what to say about this book. People love it, and love what it says, but several of the companies profiled turned out to be cooking their books, cheating customers, etc... Wells Fargo, Sallie Mae, GE... So I'm left wondering, were these companies extraordinarily successful because of the processes and ideas presented in the book, or was their extraordinary success based on cheating. I just can't take the book's advice seriously given the track record of several of the companies studied. Maybe if you're passionate about being the best, and you want to be the best in the world, and make tons of money doing it [your hedgehog]- you break the rules to get ahead?? Not the advice I'm looking for....

91 people found this helpful

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Frost

Fundamentally flawed, don't buy.

Reviewed in the United States on May 7, 2019

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This is a Fad book that criticizes Fads...

The companies this book glorifies...have virtually all FAILED spectacularly following their business models since publication.

Fannie Mae is praised constantly for gambling in the capital markets with Wallstreet...how did that work out in 2008?!

Walgreens gained market share as a "hedgehog"...then became a bloated celebrity-obsessed Leftist corporation and enabled THERANOS!

Wells Fargo abandoned the safe banking model after deregulation... "hedgehog"...then started robbing their customers, and engaging in massive fraud...then the executive class threw local managers under the bus and escaped with their parachutes..

Circuit city focused on quality delivery experience..."hedgehog"...then they sat there and rotted away and were obliterated by the internet.

The list goes on. Don't buy this book.

28 people found this helpful

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Windows 98

but I enjoyed this. I am not interested in being a ...

Reviewed in the United States on October 16, 2017

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This is the first business book I've ever read, so I'm not very famillar with the genre, but I enjoyed this. I am not interested in being a CEO or anything like that, but I liked this book because many of the concepts talked about can be applied to my own life. I saw this as more of a general self improvement book that used businesses as examples of concepts, rather than a book solely about business.

43 people found this helpful

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Chris J.

Intersting Read Not Just For Those In Management

Reviewed in the United States on May 17, 2017

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Jim Collins presents many interesting business concepts throughout Good to Great. The research conducted for this book is complicated however Collins simplifies the process to more clearly explain why some things were included or omitted. Through the research, many concepts are presented and then emphasized using comparisons between two similar companies. At times the transformation of a specific company solely based on use of the concepts seems hard to believe. However Collins does give enough evidence to support the importance of the concepts to be used as tools to help the company transition from good to great. The concept being the most important in my opinion was having upper management to be brutally honest. Many companies fail to face the facts and it's easy to see in this book the consequences. The book was published about 15 years ago and since then one of the “great” companies has gone out of business (Circuit City) and another one is currently in trouble (Wells Fargo). So it is interesting to analyze what concepts the companies stopped implementing that made them so successful years ago. Overall this book was an interesting and easy to understand read that appeals to not just those in upper management, but also to those who want to know what can make a company great.

17 people found this helpful

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richard e whitelockTop Contributor: Children's Books

THE NEXT STEP: GREAT TO GREATER

Reviewed in the United States on July 15, 2017

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A wonderful anthology on the right and necessary steps a growing concern must continue to take if they are to remain viable in todays society and ready for the future.. As a CEO, you must be above the fray of everyday operations and keep a keen eye on the future and potential innovations. For example, when Sears gave up the catalog in the early 1990's, the potential of the internet was just beginning to raise its capacity to greatly influence a new way of doing business. If the Sears executives had not been so busy trying to save a buck and give up the catalog, maybe it could have retained its millions of dedicated shoppers and innovated along the lines of the internet that we know today as Amazon.

Bezos, of Amazon, was a hedge fund manager in the late 1980's. How did he become some a relevant whole seller with a revolutionary way of delivery in the late 90's. This is the clear message that I got from Good To Great. You must be willing to boldly assault the future and at the same time question if this is the right way to go. That way your organizations will not become complacent and our managerial core will be a group of activists and futurists. That's how you keep going from Great To Even Greater. Good To Great is fine. But now you must take the next step.

9 people found this helpful

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Top reviews from other countries

The Salary Coach

9/10: Useful lessons to improve your business

Reviewed in the United Kingdom on July 17, 2017

Verified Purchase

Good to great summarises the findings from extensive research into what makes certain high performing companies outperform their peers. The findings are both interesting and capable of being replicated by any company that wishes to improve performance.

This book is very concise and full of interesting case studies. It was one of the few occasions when I wished the book could have been a bit longer.

Well researched, well written, well done!

Here are some of the learnings I will be taking away from this book:
• All Good to great (“GTG”) companies had a Level 5 leader
• Level 5 leaders consistently exhibit humility, modesty and an ability to reign in their ego.
• Many companies are drawn towards outgoing egocentric leaders and this is often the wrong choice.
• Level 5 leaders are more interested in something larger and more lasting than their own career
• GTG leaders concentrate on hiring the right people before deciding on strategy
• Don’t compromise when hiring. If you’re not confident then keep looking
• When someone needs to leave the company act quickly
• Give your best people the best opportunities and not your biggest problems
• GTG management teams have rigorous debates and aren’t afraid to share their views. But when a decision is made they act as one
• GTG companies ensure information flows give management the right facts to manage the business effectively
• GTG companies foster a culture where employee’s views are heard and acted upon
• GTG companies review failures without negative consequences for the people involved
• Figuring out how to motivate people is a waste of time. If you hire the right people they will motivate themselves.
• Good to great companies did one thing exceptionally well and stuck to it (the hedgehog process)
• GTG companies developed their strategy from a deep understanding of what they could be world class at. This was not a goal or intention but an understanding of reality
• GTG companies typically focussed on one KPI e.g. profit per customer
• GTG companies were incredibly disciplined and did not waste time and money on unrelated activities and acquisitions
• GTG companies used technology as an accelerator of, not creator of, momentum
• Careful consideration should be given to whether a given technology fits with your hedgehog concept
• GTG companies often looked like an overnight success from the outside but in reality they were long in the making and a result of persistent action over a long period of time.
• Preserve core values and purpose while strategies and practices endlessly adapt with the changing world

64 people found this helpful

Jeff Duval

Five Stars

Reviewed in the United Kingdom on December 22, 2016

Verified Purchase

Incredibly valuable and easy to read piece of work!
A stunningly enlightening study of winners and losers

As Exec Chairman of a pan-European SME, the easy read of this book has refuelled my determination to (try and) get it right. Unfortunately, bad companies managed by Rambo like individuals remain the norm on this side of the pond... Still very refreshing read about what works and what doesn't...

4 people found this helpful

Amit Shrivastava

The print quality is horrible as its printed in India

Reviewed in India on March 23, 2019

Verified Purchase

I always try and buy books not printed in India, I thought this was printed in USA and when saw pathetic fonts , low quality ink and thinner fonts immediately looked for as to where it was printed and to my horror it was in India , as no other option is available I will make do with this terrible printed in India edition

18 people found this helpful

Ann Hardy

Solid work: veers off into slightly obscure metaphors

Reviewed in the United Kingdom on July 17, 2009

Verified Purchase

Spectacularly good. Unlike many books of this type, this isn't just one person's opinion. The book opens with a discussion of the research methodology (10 person-years of it) underlying the book. That alone makes it worth a dozen airport-departure-lounge management books.

It was also an easy listen (I had it on CD, listened to much of it 3 hours straight on a long car journey and wished I had a few more miles to go)

However I gave it four stars rather than five because it tended to veer off into excessive use of analogies/metaphors (three circles, hedgehog concepts and the rest) which for me made it harder to get at the detail, and more difficult to judge the strength of the evidence, than an unvarnished description of what they found.

Definitely, definitely read it if you are involved with management; and if you don't have time to read it all, read the first three chapters

9 people found this helpful

M. Ahmed

Charismatic CEO's led the good to great companies - Totally wrong perception!

Reviewed in the United Kingdom on July 20, 2010

Verified Purchase

I read this book with great interest as it's selection criteria for the finally selected 11 companies was strict and the author does not withold any information on the selection process either. The end of the book lists its selection criteria, complete with a comprehensive FAQ section.

The final selection consists of 11 good to great companies (Selected from 1435 Fortune 500 companies) and 17 comparison companies that could not qualify. The primary selection process consisted of baselining the 'good to great' companies at three times the market for fifteen years including 15 years of good performance (1.25 time the general stock market) preceding the transition while the company had to be an established, on going company, not a startup.

Pretty strict criteria that has led to some eye opening findings. Most of the findings can be browsed by reading the reviews on the Amazon .co.uk and .com sites.

A MUST READ BOOK for all aspiring and current leaders.

2 people found this helpful

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