Good to Great
By Jim Collins
HarperCollins Publishers, 2001

    This book is about a set of companies that were selected and researched because they were able to turn good performance into sustained great performance, primarily as measured by stock market returns.  The companies were systematically selected based on a specific set of criteria that characterized them as turning from “good” to “great”. A total of 11 companies were determined to fit the criteria and then were carefully studied in order to determine what practices they used to make them “great”.  Each company was also compared against companies that were in similar industries and of similar circumstances but that did not make the transition from “good” to “great”.  Another six companies that wavered between “good” and “great” over a period of time, but never sustained “greatness” were also studied.  A total of 28 companies participated in this study which led the research team and author to conclude that there are some very specific things that “good to great” companies do that facilitates their success.

    In general, the key things that characterize a “good to great” company can be described as disciplined people, disciplined thought, and disciplined action.  Specifically, these are outlined in the book under the following categories:

1. Level 5 Leadership – specific characteristics and behaviors of leaders
2. First who… then what – getting the “right” people in the company and the “wrong” people out of the company
3. Confront the brutal facts – never lose faith in your strategy, but deal with things truthfully
4. Hedgehog concept – simplicity that comes from understanding your core business, understanding what you can be best in the world at, what you are deeply passionate about, and what drives your economic engine
5. Culture of discipline – great performance by disciplined people, thoughts, and actions without needing a lot of bureaucracy and controls.
6. Technology accelerators – including new technology in the transformation process

     Although the author hesitates to identify it as the most important aspect of a “good to great” company, Level 5 Leadership is the first area that the book addresses and its ideas are strong influences throughout the rest of the book.   The descriptor “Level 5” implies a carefully constructed hierarchy of leadership levels; however, it is a term which was simply adopted by the researchers involved in this project as a way of describing a leader who is both humble and strong-willed.  The researchers came up with the following hierarchy of leadership as a way of expressing the uniqueness of the level 5 leader:

                                 Level 5 Executive
                        Builds enduring greatness through a paradoxical
                        blend of personal humility and professional will.

                         Effective Leader 
            Catalyzes commitment to and vigorous pursuit of
            a clear and compelling vision, stimulating higher
            performance standards.

                             Competent Manager
                        Organizes people and resources toward the effective
                        and efficient pursuit of predetermined objectives.

                        Contributing Team Leader
                        Contributes individual capabilities to the achievement
                        of group objectives and works effectively with others
                        in a group setting.

                        Highly Capable Individual
                        Makes productive contributions through talent, knowledge,
                        skills, and good work habits.

                                                                     Level 5 Hierarchy (page 20)

    The key defining characteristics of a Level 5 leader are humility and will.  Humility is one of the competencies found in the self-management dimension of the leadership competency model.  It is defined in the model as “being able to have a realistic perspective of one’s worth and ability to admit to one’s mistakes,” which is very consistent with the meaning that Collins and his research team have assigned to Level 5 leadership.  In the companies studied, the top executives of each “good to great” organization were described as modest, shy, quiet, self-effacing, understated, and humbled.  They gave credit to others rather than taking credit for their own accomplishments, and a number of examples of selfless acts were described by the author.  This is contrasted by the super-egos of a number of the top executives from the comparison companies. 

    The idea of will to perform is the other part of the Level 5 leadership equation.  By this, the author is referring to a strong drive to make sure the company is successful in producing results.  It includes the ideas of work ethic, energy, effort, goal orientation, personal resiliency, and adaptability from the self-management dimension of the leadership competency model.  In addition, a few other descriptors of professional will include catalyst, setting standards, unwavering resolve, and taking responsibility, which are compatible with two competencies from the social responsibility dimension, including being accountable and courage of convictions.

~ Contributed by Cathy Bush

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