Posted in Our Blog on November 7, 2017
Good to Great: Why Some Companies Make the Leap… and Others Don’t by Jim Collins is an excellent book that does a great job of describing how the author and his university team scientifically studied companies that went from “good” to “great” (hence the title) and stayed great for at least 15 years. These great companies managed to do so without being dependent upon any single charismatic leader (e.g., Lee Iacoca, Bill Gates) nor on any particular product or service that, for most vendors, everyone did great (e.g., computers) over a sustained 15-year period.
Collins uses such criteria as consistently extraordinary stock returns over the years (at least 4.3 times the average market returns) as the yardstick for gauging a company’s greatness. Over the 30-year period studied, only 11 companies “made the grade.” This team of researchers studies what the company management did to go from good or average stock performance to become great, including by interviewing the leaders and many others involved in each company, and many other factors, and came up with a short list of clear, and clearly defined, principals, that every one of these best of the best performers all did.
As someone fascinated by this topic, this book has impressed me more than any other I’ve read, and taught me more than any other, to the significant benefit of both me and my company. Of note also are the excellent comparisons in the book, and detailed analyses, of “control group” parallel companies – basically “on par” – average performance-wise – with each of the other companies that turned that proverbial corner, but that themselves failed to become great.
I’ve read (and listened to on audio book) Good to Great several times, so I can and do highly recommend it to anyone, especially business owners.