Monday, June 19, 2006

Book Review: Good To Great

At the recommendation of my CEO, I read Good To Great by Jim Collins. This is a business book that tries to figure out the elusive question as to why some businesses become great, while others remain good (or good enough).

One aspect of the book that makes it so entertaining is the approach the author took. Rather than starting with a theory of what would make a good company great, he started with a bunch of apparently random great companies. He then mined the data looking for patterns that explain how they managed to become so successful.

This approach leads to a set of novel principles that one wouldn't guess would be the main ingredients for success, but in retrospect make perfect sense.

Take one of the key ideas for example: Get the right people on the bus. This simple idea says that you need to have the very best people working in your organization. If a person doesn't fit in their position, they need to be let go (taken off the bus) or moved to a place where they can be the best (asked to sit in a different seat). The author explains that before you can even think of becoming great you need to tackle this step.

Now, what happens when you've got exactly the right people on the bus? All of a sudden the vast majority of your difficult people-management issues go out the window. After all, the right people want to be there and do their job well.

In other words, by implementing the basic good to great principal, you have no choice but to set the stage to be successful.

Another aspect of the book that I liked was that the great companies weren't the trendy companies. Consider one example - Walgreens. I would hardly think of Walgreens as being a great company. Yet if you look at their stock's performance, they are clearly a great company. In other words, you can become a great company, not by choosing a great industry but by acting great.

One aspect of the book that I found lacking was how to deal with the fact that the good to great transition is a slow one. This isn't a bad thing on its own, but does leave me wondering what a struggling startup with limited runway should make of these principles. Are they simply out of reach? Or, because the organization is smaller, can it implement them far faster than a larger organization? I'm just not sure.

Speaking of startups, the author explained in about two pages how a great entrepreneurial startup can die by growing into a bureaucratic beast. Having been through the process at a previous job of watching the board swap out CEOs to bring in a pro and adding process after process to make the company more like a real company, I really got a kick out of this section. I felt like the author had been able to summarize in words what took years to watch happen.

If you have even a passing interest into what makes a company great, or how your company could become something really special then you should read the book. This holds doubly true if you think that management fads are a waste - as this book pretty much had none of them.

I give the book an 8/10 for being well written, easy to follow and for having lots to learn from.


  1. Totally agree with Good to Great. Love it. Nice pick up.

  2. Anonymous9:28 AM

    Ben, I think your assessment is right on target. GTG has innumerable nuggets of wisdom and business common sense as well as several "Wow, I wouldn't have thought that" moments. When one juxtaposes the traits and track record of the GTG companies against their peer group, the data is even more compelling.

    I think the way we would apply the GTG wisdom in a start up with limited resources would be by choosing the key concepts that provide the biggest, quickest, least expensive road to greatness--hiring well/firing non-performers and aggressively pursuing a hedgehog strategy—if we execute well on those two, the flywheel should follow in time.

    The tactics and strategies aren't labor intensive, but they do take time--a

  3. Anonymous9:31 AM

    Ooops, I meant to say, these strategies and tactics aren't cash intensive, but they do take time --C