Book Summary: Good To Great

Even though Good to Great was published many years earlier, and I would claim that the rules of the game have changed since then, Collins (if he would answer my calls) would undoubtedly respond that these ideas are timeless, even if the businesses themselves aren't.

The 6 Things That Will Make a Company Great

This post is about the six ingredients that make a company successful.

Level 5 Leadership

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You'd be correct if you claimed, "Hey, if Level 5 is the finest, then levels 1 through 4 must exist." They're right here.

You are a Level 1 if you are a highly capable person. You are a Level 2 if you contribute to your team. You are a Level 3 if you are a competent manager. You are a Level 4 if you are an effective leader.

Ultimately, if you create a contradictory mix of humility and professional will, you are a Level 5 executive.

Still undecided about whether you're a Level 5 or not? Here are a few hints.

• You are a Level 5 if your desire is for your company instead of for yourself.
• You are a Level 5 if you have a strong sense of humility.
• You are a Level 5 if you have an unshakeable determination to complete the task at hand.

This book is not for you if you discover you aren't a Level 5 leader or don't want to be.

First Who, Then What

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Who always comes before what in the Good to Great language. It would help if you first had the proper people in your company before establishing a purpose, plan, framework, or methods.

Collins cites the bus as an example. Before you know where you're going to drive that bus, you need to get the appropriate people in the correct seats.

For the record, I believe that the bus should be driven straight for the bank - right where the money is.

As it turns out, Level 5 executives are hell-bent on bringing the proper individuals on board.

One of the reasons they do this is because they know that, like Morgan Freeman and Jack Nicholson in that horrible movie, they will die one day, and then who will guide the ship?

Of course, the passengers on the bus. Collins refers to Level 4 leaders as "genius with a thousand assistants" because they rely on their talents and pure genius to get things done.

Here's how to make people decisions with rigor:

1. If you're unsure, don't hire. Limit your expansion based on your ability to recruit the proper individuals.

2. Take action when you need to make a difference. But first, double-check that they aren't in the wrong seat. You'll frequently discover that some of your employees are better suited for different positions within your firm.

3. Put your best people in charge of your most ambitious tasks. It's all too easy to assign your best people to your most challenging problems. That is not something you should do.

4. If you're going to sell off your problems, don't do it at the expense of your greatest employees.

Confront the Brutal Facts.

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It's fantastic to have a vision, but successful companies continue to blend vision with the harsh realities of life.

Consider the United Kingdom during World War II. Churchill had this to say while being bombed to oblivion by the Nazis and with most of Europe and North Africa under Nazi occupation.

"We shall fight in France; we shall fight on the seas and oceans; we shall fight with growing confidence and growing strength in the air. We shall defend our island, whatever the cost may be. We shall fight on the beaches; we shall fight on the landing grounds and fight in the fields and streets. We shall fight in the hills. We shall never surrender."

Churchill saw that if he sugarcoated the issue, everyone would realize he was a liar. It's almost as if he's saying, "So, here's how it works. Things are at an all-time low right now. And they may get a little worse. But here's how we're going to deal with it. Here's how we're going to pull it off."

Collins, a Vietnam soldier, and POW coined the term "Stockdale Paradox." Here's his problem: You must maintain hope that you will succeed in the end and face the harsh realities of life, whatever they may be.

Having unshakable faith without the hard facts, on the other hand, isn't going to help you much. So, here's how you create a culture where the unpleasant realities that no one wants to discuss are front and center:

1. Instead of giving answers, start with questions. "Why?" "Why?" "Why?" "Why?" "Why?" you should ask a thousand times.

2. Instead of using compulsion, engage in conversation and debate. Don't act as though you're an expert on everything. You don't have it. If you welcome individuals to contribute and ask for their thoughts, you'll be surprised at how much you can learn from them.

3. Carry out autopsies without assigning guilt. Examine your mistakes whenever you make them. Look into it. Learn everything there is to know about it. Most importantly, avoid laying blame. Instead, concentrate on what you can do better the next time.

4. Include red flag techniques that transform "data" into "data that can't be ignored."

So, we are in the middle of one of the largest economic crises that we've seen. Are you talking about the tough stuff?

The Hedgehog Concept

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Is it a hedgehog or a fox that you are? Here's a hint: the hedgehog knows one big thing, whereas the fox knows many things.

Foxes are multitasking creatures who perceive the world in all of its complexities. Hedgehogs, on the other hand, reduce a complicated environment to a single, unifying concept. Everything is guided and united by a single premise.

Here are a few hedgehog ideas, in case you believe hedgehogs are stupid and slow.

• Einstein's equation, E=mc^2
• Adam Smith's Invisible Hand and Pin Factory

Hedgehogs were, in one way or another, genuinely outstanding businesses.

Now, I'd say that we're on the verge of a massive shift in the corporate world and that everyone should be thinking about it. Even if you went through this procedure two years ago, it's time to revisit it.

What is the meaning of the hedgehog concept? It's a clear, straightforward notion that stems from a thorough grasp of the following three factors:

1. What you can be the world's finest at

This is not the same as a core skill, and it challenges you to be completely honest with yourself. With this one, you'll almost certainly have to face some harsh realities.

A hedgehog notion, according to Collins, is not a desire to be the best, a strategy to achieve that goal, an intention to achieve that goal, or a plan to achieve that objective. It's a realization of what you're capable of.

2. What powers your economy

The denominator in this equation, Profit per X, is the most important item in your engine. Profit per shop, profit per visit, and a variety of other factors might be considered.

As we emerge from the recession, this is an important topic to consider. Spend some time thinking about this; it's a crucial point.

3. What you are devoting your life to

Even though the hedgehog notion appears to be a hedgehog concept, don't expect to figure it out overnight. The Good to Great businesses took an average of four years to get at their hedgehog concept.

Collins also discusses forming a council to assist your organization in moving through and toward the hedgehog concept.

Instead of forming a council, you should gather as many clever individuals as possible (ideally smarter than you) and try it out. Just remember to pay attention. When someone gives you the truth, pay attention.

Culture of Discipline.

We won't spend much time on this because it's clear. Essentially, you'll need a group of self-disciplined individuals who perform while remaining fanatically constant inside the three rings.

People, attitudes, and actions are disciplined.

Getting this done needs the application of a seemingly conflicting rule. People should operate within the limits of a system, but they should have the freedom and flexibility to accomplish what has to be done inside that system.

Technology Accelerators

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Here's what you'd like to know about technology, according to Collins. When deployed correctly, technology becomes a momentum booster rather than a source of it.

For the simple reason that you can't develop good technology before you know which technologies are relevant, the Good to Great firms didn't start their journey with pioneering technology.

Which ones are they?

Those, and only those, that point straight to your hedgehog concept's three intersecting circles. Given that we are in the midst of a massive shift in how technology is used in business, I believe this is a timely perspective.

Someone has most likely advised you that you should be on Twitter or upload a video to YouTube.

Remember, fear of being left behind should not inspire you.

Take the time to consider how this new technology might help you reach business goals. But keep in mind that new technologies provide a great potential to transform the way you do business.

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