Review of Good To Great
By Jim Collins

Reviewed by: Kelsey Ebben, Performa Research Associate

Good To Great

Jim Collins, co-author of Built to Last, asked: How does a good company become a great company? He and his team of researchers found eleven companies that demonstrated a significant transition from merely good companies to high-performing, great companies. They then identified a good company in the same industry for comparison purposes and began to see patterns in those that became great. Their findings are synthesized in a framework.

Collins provides an introductory summary of his model (p.12-13). "Think of the transformation as a process of buildup followed by breakthrough, broken into three broad stages: disciplined people, disciplined thought, and disciplined action. Within each of these three sages, there are two key concepts, shown in the framework and described below."

• Level 5 Leadership: Self-effacing, quiet, reserved, even shy - these leaders are a paradoxical blend of personal humility and professional will.
• First Who, Then What: We expected that the good-to-great leaders would begin by setting a new vision and strategy. We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats - and then they figured out where to drive it.
• Confront the Brutal Facts (yet Never Lose Faith): You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, AND at the same time have the discipline to confront the most brutal facts about your current reality, whatever they may be.
• Hedgehog Concept (Simplicity in the Three Circles): If you cannot be the best in the world at your core business, then your core business absolutely cannot form the basis of a great company. It must be replaced with a simple concept that reflects deep understanding of three intersecting circles.

The hedgehog concept is a simple, crystalline concept that emerges from the overlap of these three questions, like a Venn diagram: What can you be the best in the world at? What drives your economic engine? What are you deeply passionate about?

• Culture of Discipline: All companies have a culture, some companies have discipline but few companies have a culture of discipline. When you have disciplined people, you don't need hierarchy. When you have disciplined thought, you don't need bureaucracy. When you have disciplined action, you don't need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance.
• Technology Accelerators; Good-to-great companies think differently about the role of technology. They never use technology as the primary means of igniting a transformation. Yet, paradoxically, they are pioneers in the application of carefully selected technologies.
• Flywheel Breakthrough: The good-to-great transformations never happened in one fell swoop. Rather, the process resembled relentlessly pushing a giant heavy flywheel in one direction, turn upon turn, building momentum, until a point of breakthrough and beyond.

Each of the seven key concepts has a chapter dedicated to further explanation and concrete examples from the eleven Good-to-great companies. A summary is provided at the end of each of these chapters as well. The text is very engaging and the book has received a lot of attention in the business world. In fact, it is still on people's minds three years after publication. The question for private college and university presidents must be: How does a good college become a great college?

Collins discusses the difficulty of business and industry's ability to embrace Level 5 Leadership because Boards think they need a larger-than-life personality to run a major company. The same mistake can be made in higher education, since many of the board members are from business and industry and are bringing that same philosophy into the selection of college president.

Another leadership insight from the book that can be applied to higher education refers to the problem of succession. Often times, Collins suggests, egocentric Level 4 leaders set their successor up for failure, thus demonstrating that they were such great leaders that the place fell apart when they left. Level 5 leaders strive to put the company and the CEO successor in the best possible position as they exit, finding satisfaction in a company that remains great or becomes greater after their tenure. Certainly college presidents and board chairs can learn from this powerful example.

Presidents of colleges and universities might read this book with a special focus on the section on leadership. Collins suggests that Level 5 Leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious - but their ambition is first and foremost for the institution, not themselves. This is directly translatable into the realm of private higher education, where presidents are clearly committed to their institutions. One issue for higher education might be the short average duration of college presidents. A hedgehog concept took four years on average to develop; the average tenure of a college president is 5-7 years.

Key nuggets of information and insight from the seven key concepts:

• Level 5 Leadership: They look out the window to attribute factors of success to something other than themselves but look in the mirror and take full responsibility when things go wrong. Level 4 leaders do the exact opposite.
• First Who, Then What: When in doubt, don't hire - keep looking. When you know you need to make a people change, act. Put your best people on your biggest opportunities, not your biggest problems.
• Confront the Brutal Facts (yet Never Lose Faith): Build red flag mechanisms that turn information into information that cannot be ignored.
• Hedgehog Concept (Simplicity in the Three Circles): Good-to-great companies were like hedgehogs - simple, dowdy creature that know "one big thing" and stick to it.
• Culture of Discipline: On one hand, it requires people who adhere to a consistent system; yet on the other hand, it gives people freedom and responsibility within the framework of that system.
• Technology Accelerators: How a company reacts to technological change is a good indicator of hits inner drive for greatness versus mediocrity. Great companies respond with thoughtfulness and creativity, mediocre companies are motivated by fear of being left behind.
• Flywheel Breakthrough: Those inside these good-to-great companies were often unaware of the magnitude of their transformation at the time; only later did it become clear. They had no name, tag line, launch event or program to signify what they were doing at the time.

Remember:

• People are not your most important asset, the RIGHT people are.
• Good is the enemy of great.
• Ignoring reality is a de-motivator to great people.
• Create a climate where the truth is heard.