Going from Good to Great

By Haig on December 29, 2010 — 3 mins read

This year I read the bestseller book “Good to Great” by Jim Collins. Along with a fair share of buzzwords and hype are some great bits of advice for entrepreneurs. Here’s a summary of the book broken down by chapter.

Chapter 1: Good is the Enemy of Great



The profound point that Collins makes is that, paradoxically, “good” can be the enemy of “great”, insofar as if your goal is to simply be good at something, you will make decisions based on that and may miss some of the key opportunities or be afraid to take some of the crucial risks required to become great.

Chapter 2: Level 5 Leadership


Level 5 Leaders embody a paradoxical mix of personal humility and professional will.

Collins begins the process of identifying and explicating the unique factors and variables that differentiate good and great companies. One of the most significant differences, he asserts, is the quality and nature of leadership in the firm. Collins goes on to identify “Level 5 leadership” as a common characteristic of the great companies assessed in the study. This type of leadership forms the top level of a 5-level hierarchy that ranges from merely competent supervision to strategic executive decision-making.

Chapter 3: First Who, Then What


Get the right people on the bus

First one needs to get the ‘right’ people on the bus
Then figure out the best path to greatness.

Collins states that the process of securing high-quality, high-talent individuals with Level 5 leadership abilities must be undertaken before an overarching strategy can be developed. With the right people in the right positions, Collins contends that many of the management problems that plague companies and sap valuable resources will automatically dissipate.

Chapter 4: Confront the Brutal Facts (Yet Never Lose Faith)


Another key element of some companies’ unique ability to make the transition from Good to Great is the willingness to identify and assess defining facts in the company and in the larger business environment. In today’s market, trends in consumer preferences are constantly changing, and the inability to keep pace with these changes often results in company failure.

Collins outlines a four-step process to promote awareness of emerging trends and potential problems:

  1. 1) Lead with questions, not answers;
  2. 2) Engage in dialogue and debate, not coercion;
  3. 3) Conduct autopsies without blame;
  4. 4) Build red flag mechanisms that turn information into information that cannot be ignored.

Chapter 5: The Hedgehog Concept


In this chapter, Collins uses the metaphor of the hedgehog to illustrate the seemingly contradictory principle that simplicity can sometimes lead to greatness. When confronted by predators, the hedgehog’s simple but surprisingly effective response is to roll up into a ball. While other predators, such as the fox, may be impressively clever, few can devise a strategy that is effective enough to overcome the hedgehog’s simple, repetitive response.

In order to help expedite this process, Collins suggests using the following three criteria:

Chapter 6: A Culture of Discipline


Another defining characteristic of the companies that Collins defined as great in his study was an overarching organizational culture of discipline. He is quick to point out that a culture of discipline is not to be confused with a strict authoritarian environment; instead, Collins is referring to an organization in which each manager and staff member is driven by an unrelenting inner sense of determination. In this type of organization, each individual functions as an entrepreneur, with a deeply rooted personal investment in both their own work and the company’s success.

The author asserts, it is important that within this overarching culture of discipline, every team member is afforded the degree of personal empowerment and latitude that is necessary to ensure that they will be able to go to unheard-of extremes to bring the firm’s envisioned objectives into existence.

Chapter 7: Technology Accelerators


Collins contends that the good-to-great companies approach the prospect of new and emerging technologies with the same prudence and careful deliberation that characterizes all of their other business decisions. Further, these companies tend to apply technology in a manner that is reflective of their “hedgehog concepts” — typically by selecting and focusing solely upon the development of a few technologies that are fundamentally compatible with their established strengths and objectives. Collins characterizes the ideal approach to technology with the following cycle: “Pause — Think — Crawl — Walk — Run.”

Chapter 8: The Flywheel and the Doom Loop


In this chapter, Collins describes two cycles that demonstrate the way that business decisions tend to accumulate incrementally in either an advantageous or a disadvantageous manner. Despite the popular misconception that business success or failure often occurs suddenly, Collins asserts that it more typically occurs over the course of years, and that both only transpire after sufficient positive or negative momentum has been accrued.

Posted in: Business, Education, Life

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