The Business Book That Holds Up 21 Years Later

Book review by Stuart Fitzgerald.

“Indeed, the real question is not, “Why greatness?” but “What work makes you feel compelled to try to create greatness?” If you have to ask the question, “Why should we try to make it great? Isn’t success enough?” then you’re probably engaged in the wrong line of work.”

One of the most successful business books ever written, Jim Collins’ Good To Great – which, written in 2001, turns 21 this year – preceded the dot-com bust, when C-Suite leaders who’d been following the changing narrative of internet culture soon hungered for the common sense wisdom Collins and many others used before them. This same sort of shrewd, common sense is as important now as it was then, and perhaps even more so, given the distraction of technology and Instagrammable moments in a world where simple ideas generally work best. 

Here’s what Stuart thought of it:

“Good To Great’s ideas are plentiful, including impressively succinct mottos to remember such as ‘good is the enemy of great’. What our Managing Partner Stuart liked was its many interesting findings, such as the fact that great companies tend to have CEOs who came from within the company and revolutionary processes do not create revolutionary results, only evolutionary processes do.“

Stuart’s Key Takeaways

1. Level 5 Leadership is key

As per Collins, Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious— but their ambition is first and foremost for the institution, not themselves. It is very important to grasp that Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great.

2. Confront the brutal facts (yet never lose faith)

The good-to-great companies infuse their thinking with the brutal facts of reality. Start with an honest and diligent resolve to find the truth and the right decision will often become self-evident. Saying that there is nothing wrong with following a bold vision of greatness but the good-to-great companies continually refine the path to greatness with the brutal facts of realities, by remembering that facts are better than dreams. 

3. The hedgehog concept

Are you a hedgehog or a fox? The fox knows many things but the hedgehog knows one thing extremely well. Hedgehogs take a complex world and simplify it relating it to one core idea. More precisely, a Hedgehog Concept is a simple, crystalline concept that flows from a deep understanding of the intersection of the following three circles: 1) what you are deeply passionate about 2) what you can be the best in the world at, and 3) what best drives your economic or resource engine. 

4. A culture of discipline

Innovation is key but stay within your hedgehog. In summary: Build a culture around the idea of freedom and responsibility within a framework, fill that culture with self-disciplined people who are willing to go to extreme lengths to fulfil their responsibilities, don’t confuse a culture of discipline with a tyrannical disciplinarian, adhere with great consistency to the hedgehog concept exercising an almost religious focus on the intersection of the three circles, complete a “stop doing list” and unplug anything extraneous. It takes discipline to say no to great opportunities that don’t fit in your three circles – that something is a once in a lifetime opportunity is a fact, it is not a reason – so “stop doing” lists are important. 

5. Make use of technology accelerators, when it makes sense

Walgreens’ pioneered use of technology was all about improving patient convenience. Before injecting tech into the business, ask yourself: does this fit into my three circles? Technology by itself is neither a cause of greatness nor decline. Leaders who deliver greatness are motivated by a creative urge and excellence for its own sake, those who achieved mediocrity were motivated by fear of being left behind. 

First Who, Then What

Having the right people in the right jobs matters most. The right people are self-motivated and will adapt to any circumstances Wells Fargo & Co Bank built one of the best, most talented teams in the industry back in the 70s and 80s. Rather than focussing on change strategies, they focussed on injecting an endless stream of talent into the company. They hired outstanding people whenever and where ever they might find them, often without any specific job in mind. Lots of them went on to become CEOs of other companies. Wells Fargo’s strategy was simple: recruit the best talent, train them better than anyone else and accept that some of them will leave. The right people will deliver results regardless of the incentive system as they are motivated by more than money. People aren’t your greatest asset, the right people are. 

Summary 

Good To Great examines what it takes for ordinary companies to become great and outperform their competitors by analysing 28 companies over 30 years, who managed to make the transition or fell prey to their bad habits.

The research showed that all the Good to Great transformations happened with the consistent application of all the mentioned phases––showing that great companies did not emerge due to a dramatic or a revolutionary event, but rather years of adhering to their core tenets.

Indeed, the point of Collins’ book is not that we should add his findings to what we are already doing, the point is to change your mindset and redirect your focus in the best way possible. By organising the majority of our work time around applying these principles, our lives would be simpler and our results vastly improved. Pick up Good To Great online or in any good bookstore now. 

Financial advisor to the Irish community pharmacy sector, food & beverage, SME and retail.

We at Fitzgerald Power have spent thirty years offering creative solutions to a diverse range of clients across Ireland, and the UK, and we’re pretty proud of what we’ve helped our clients to achieve. We enable and empower businesses to reach any and every goal. Whatever the job, we don’t offer anything less than the best. We work across a range of sectors, including pharmacy, food & beverage, SME and retail. Please get in touch today if you would like to speak to any of our experts.

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