Good to Great by Jim Collins | Book Summary & PDF

The classic book Good to Great, authored by Stanford Business School professor Jim Collins shows us why some companies make the leap while from Good to Great, while other companies don’t. 

Key Ideas: 3 Disciplines of going from Good to Great

If Good to Great by Jim Collins were to be summarized in just 1 word, it would be DISCIPLINE. It is the one word in this book, shown in 3 major aspects:

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1. Discipline of PEOPLE

The kind of people you have in the business will determine how successful your business is.

Jim sheds light on this through the different types of leadership.

The 5 Levels of Leadership

  • 1 – The highly capable individual. This is the starting level for many, the stage where the person uses his talent, knowledge, skills, and good practices at work.
  • 2 – The contributing team member. At this higher stage, the person contributes his individual capabilities for the benefit of the group he belongs to and for the achievement of shared goals.
  • 3 – The competent manager. Moving further up, the person now organizes people and resources in pursuit of their objectives.
  • 4 – The effective leader. This is the person who makes it happen. At this level, the person enables the pursuit of the vision and motivates the people to aim for better work performance.
  • 5 – The great leader. Here, the person, or the executive, is focused on making the business not just good but great, through humility, a fanatic drive, and willpower.

Most Important Question: First who, then what

This question is another important concept under this discipline. It emphasizes the importance of getting the right people into the organization and the wrong people out of it. This is where you start as a leader, where you have to be very rigorous in your decisions.

The old adage “hire slow, fire fast” is the same thing as what Jim says: “when in doubt, don’t hire, keep looking.”

Your Best People on Your Biggest Opportunities

Good to Great pdf
Keep your best people with you
  • Put your best people on your biggest opportunities, not your biggest problems.
  • Never sell off your best people
  • Sell off only your biggest problems.

Discipline of People key point: Keep your best people with you.

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2. Discipline of THOUGHT

This discipline is broken down into 2 components.

First component: Confronting the brutal facts

You need the discipline to confront the brutal facts while maintaining faith in order to achieve greatness.

This is not so much about one great Herculean effort. The media is fascinated with the idea that one great effort can result in great outcomes, which is not at all the case.

Great results come from good decisions diligently executed and accumulated on top of one another.

When it comes to confronting the brutal facts, we have to be able to create an environment where truth prevails.

4 concepts that lead to the creation of a climate where truth prevails:
  • Lead with questions, not answers
  • Use dialogue and debate, not coercion
  • Conduct autopsies without blaming people
  • It’s not always about how much information a company has but how quality the information isDialogue

Engage in dialogue

The Stockdale Paradox

This concept comes from Admiral Jim Stockdale who was a prisoner of war in Vietnam. It shows the overall idea of confronting the brutal facts.

Stockdale described the attributes of prisoners of war who survived, as follows:

  • POWs were not necessarily just the ones who were optimists
  • They were also the ones who had the faith that they would prevail no matter what
  • Believed they would come out of that whole ordeal
  • At the same time, they were able to confront the most brutal facts as they were right there in that moment.

The Stockdale Paradox simply revolves around knowing that you will come out strong, that you will come out of any difficulty, but also confront the brutal facts that exist today.

Second component: The Hedgehog Concept

The hedgehog concept originates from comparing a fox and a hedgehog in terms of reaching for success. Companies that implement the hedgehog concept have more focus and are able to efficiently get things done.

Below are the main differences between the fox and the hedgehog.

The fox:

  • Scattered and diffused
  • Tries many different things
  • Lacks consistency
  • Sees the world in all its complexity

The hedgehog:

A hedgehog
Be as focused as a hedgehog.
  • Has a piercing insight
  • Does not get bogged down by all the complexity
  • Simplifies the world into a simple organizing idea
  • Delivers

Discipline of Thought key point: Simplify

You want to spend the most energy, resources, and time of the company on 3 intersecting circles:

  • Passion – What is it that the company is deeply passionate about?
  • Being the best – What is it that you can be the best in the world at (not what you want to be the best at)?
  • An area where money can be created – What drives your economic engine?

If the company is working in the intersection of all these 3, then it is highly likely that the company will be successful because it has got the focus.

It is now like a hedgehog — simplified and focused on one thing, making sure that particular thing is what gets done.

Again, discipline of thought entails confronting the brutal facts and leading with the hedgehog concept.

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3. Discipline of ACTION

This discipline is a rather simplistic concept: it is all about getting down to the smallest level of details and just executing to the best you can, with ultimate discipline.

Here are the ways:

‘Rinse Out Your Cottage Cheese’

Consider a triathlete or an Ironman athlete with immense discipline. Even though he has spent 2,000 or 3,000 calories in the morning with his workout, when he is eating he has immense discipline of rinsing out the cottage cheese because every little bit counts. Jim calls this the rinsing your cottage cheese factor, as in that athlete rinses out his cottage cheese of all the fat so that he gets the highest quality of protein in his diet.

  • Stay in the intersection of the 3 circles discussed in the hedgehog concept.
  • Again, it is about is having the discipline to not get defocused.
  • Have a “Stop Doing” List of the things that you don’t need to do.

Do only the things that are the most important. Most companies die not because of lack of opportunity but because of too much opportunity. This is a critical approach.

Push the Flywheel one step at a time to create momentum.

A flywheel
Momentum makes a flywheel almost unstoppable

The flywheel concept is another way of understanding Discipline of Action. Here’s what it’s all about:

  • If you want a giant 5,000-pound steel flywheel to rotate, you’re going to have to start pushing it one step at a time.
  • Keep on doing it and you’re going to create momentum.
  • As you create momentum, keep running behind it and pushing it. A​​t some point it catches speed and then it is almost unstoppable.

Now if someone were to come to you and asks you — hey, how did you get this flywheel to rotate so fast? What was that one major push you gave or what was the one major thing you did?  You will not be able to answer it because there is no one major push.

There is no one major thing. You only know you kept on doing it until it finally caught momentum and started going so fast that you couldn’t even stop it.

So the key here is — do it every day, create that momentum, and understand that no matter how big a single effort is, it is just a very small fraction of the entire cumulative effect. You have to work with the entire cumulative effect.

Avoid the Doom Loop

In contrast to the flywheel, the doom loop is when failed companies start with this one grand idea, one killer innovation, one miracle moment, that everything comes together. But just like getting a flywheel to rotate, there is never that one great moment.

Yet this is what the failed ones believe — that there is one great moment when everything comes together, when there is this one killer innovation.

What the failed ones tend to do, which does not work:

– Not doing the daily discipline

– Ceasing to create momentum

– Opting just for one great breakthrough

– Going through misguided acquisitions

– Trying to make a leap without going through the creation of momentum on the flywheel.

Discipline of Action keyword: Consistency

You have to maintain consistency over time. Each push of the flywheel builds on all the previous thousands of pushes. It’s not like one giant push can make it all happen, but as you continue to push in a consistent direction, you will get momentum.

However, if you push in one direction and one way in another direction, and in another direction, again, by the third day or so you will have no momentum and you will be stuck.

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Conclusion

That “One Miracle Moment” is an illusion

  • No matter how great the results, the transformation never happens in one giant step. There is no single defining action, no grand program, no amazing revolution, no one breakthrough that defines the overhaul of the company.
  • The media is obsessed with the idea of overnight greatness. It often skews our perception of what really is possible by giving us the illusion of an overnight success, when there is no real concept of such.
  • The truth is that it’s always one single step at a time. It’s a cumulative step by step, action by action, decision by decision, turn by turn on the flywheel until it has already turned a thousand rotations per minute that add up to the amazing results. It leads to the build-up of momentum until finally it’s a breakthrough.

Visit www.jimcollins.com to learn more about the book’s author.

Related Readings:

  1. Built to Last by Jim Collins
  2. ​​​​​​​The Magic of Thinking Big by David J. Schwartz
  3. The Lean Startup by Eric Ries
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