Written By: Jim Collins
Read By: Jim Collins
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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?
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?
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 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 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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Good to Great: Norman Jim Collins
Audio Book Summary
About the Collins philosophy.
Business guru Jim Collins suggests entrepreneurs do some things that drastically improve their businesses.
- Have the people listed in the key places. The selection process should be done carefully, there should be a single driver but several seats occupied as in a bus.
- Once a quarter, it holds a meeting about the decisive facts. Be careful who attends the meeting, as you will be discussing strong issues.
- Set ambitious goals for the next 15 to 25 years. This is a concrete and ambitious goal to guide your company’s progress over the next few years.
- Commit to a “20-kilometer walk” you will achieve a large and ambitious goal. Collins makes the analogy that If you find yourself on a 20-kilometer walk, you do not stop at 2 when things go well. You are still 15, and when the weather is bad, do not stop and complain, you still have 5 kilometers to go
- Place at least one big bet for the next three years. Collins makes an analogy of targeting. No entrepreneur has unlimited resources, as no weapon has unlimited gunpowder.
- Practice productive paranoia. Collins recommends getting ahead of bankruptcy. Make a plan that will allow you to survive if you have no income.
- Get a high profit on your next success event. It shows that in every business there are ups and downs, good and bad spins, but that the good stretch must be exploited to the maximum to take the bad.
- Make a list of obligations. Prioritize means to clarify your goals and reach the culmination of objectives that will strengthen your company.
About Good to Great
It speaks of a level 5 leadership in which leaders and CEOs put forward the companies for which their personal egos work.
Business leaders from good to great, focus first on getting the right people to the position they need to occupy, before devising a vision or strategy.
Many executives confuse control by discipline; They believe that discipline can be achieved through rigorous employee control which only serves to discourage.
If you feel that you can not be a great company for lack of technological resources, you think that a business does not need the latest technology to win. Technology, by itself, has never made a great company.