December 6, 2013

Good to Great by Jim Collins (Business Book Summary)

I'm taking a different approach with this one and providing a summary below instead of my usual review.  I used this sample in my application to write summaries of business books and figured I'd make it public - both for people interested in an overview as well as for future freelance opportunities.


Key Concepts


Formulas for significant company change are generally myths.  It takes more than stock options, fear, or technology to product great results.  Jim Collins and his research team studied 1,435 companies to determine qualities that made them great.

  • Start with the “who” rather than the “where”.  The right people should be on board before direction is determined.  Once the right people are on the team, issues surrounding motivation take care of themselves.


  • Discipline needs to be a priority.  Discipline is even more important than having the right people or determining a direction.


  • Good-to-great leaders are those who can focus on one main idea. This sharp focus helps people become great in a specific area.


  • Everyone should have a stop-doing list. People need to eliminate tasks that are not bringing them to greatness.


  • Greatness comes from diligence rather than an instant moment.  Success does not happen overnight, but rather as a result of effort and time.

Overview

Company change is not something that happens overnight which contradicts the story often portrayed in the media.   It takes discipline, effort, and focus rather than one defining moment.  


David Maxwell, who became the CEO of Fannie Mae in 1981, reached greatness with the people who surrounded him.  His efforts were on hiring the right people to help turn the company around from the troubled state it was in when he stepped into this role.

Wells Fargo is another company that did not move from good-to-great overnight.  It happened once they defined their most important goal which was to “run the bank like a business”.  Once this simple idea became their focus, their bottom line improved, but it did take time.

In addition to building momentum and having the right people on board, business leaders should also create a stop-doing list.  For example, Darwin Smith of Kimberly-Clark knew much of his revenue was from traditional paper mills.  Although the company had a secure business model, they believed their shot at greatness was to become a paper-based consumer company which meant traditional paper mills would move to their not-doing list.  They had plenty of critics as a result of this decision, but eventually became the top paper-based consumer products company.  It took time and effort, but with this mindset, they eventually reached the top spot in their industry.

Final thoughts


Good to Great shows leaders how to build a great company over time.   The book includes real world examples of companies who have succeeded by changing their thinking on leadership and discipline.


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