Good to Great by Jim Collins (Why Some Companies Make the Leap…And Others Don’t)

The Study:
This question preoccupied Jim Collins for years: Can companies that start out mediocre or even worse rise to sustained greatness? If so, what are the key factors that distinguish those companies that make the leap from good to great?

The Standards:
Collins and his research team set rigorous benchmarks to identify a group of companies that not only made the leap to greatness but sustained their success for at least 15 years. How great? After making the leap, these companies generated stock returns that were seven times higher than the general market over 15 years—more than double the performance of a composite index of global giants like Coca-Cola, Intel, General Electric, and Merck.

The Comparisons:
The team contrasted the “good-to-great” companies with a carefully selected set of companies that never made the leap. What set them apart? Why did one group achieve extraordinary performance while the other remained merely good?

Over five years, the team analyzed the histories of 28 companies, sifting through data and conducting countless interviews. The result was a set of findings that uncovered the essential factors behind why some companies make the leap to greatness while others do not.

The Findings:
The results of the Good to Great study will challenge conventional wisdom and offer fresh insights across management strategy and practice. Some of the surprising findings include:

• Level 5 Leaders: The research revealed the unexpected type of leadership required for greatness.
• The Hedgehog Concept: Great companies simplify their strategy by focusing on the intersection of three critical factors.
• A Culture of Discipline: Combining discipline with entrepreneurial spirit leads to remarkable outcomes.
• Technology Accelerators: Good-to-great companies use technology differently than others.
• The Flywheel and the Doom Loop: Radical, disruptive change programs are almost guaranteed to fail—sustained greatness requires a more disciplined approach.

As Collins notes, many of these findings will contradict the popular ideas of modern business culture. Some may even be uncomfortable to hear—but in a world where results matter, these insights are hard to ignore.