Book Summary: Good to Great

Good to Great is an insightful book by Jim Collins recommended by Blair, the MD of Amicus Digital (where I work). It revolves (pun intended) around the concept of the the Flywheel, and consistent factors in organisations that went from mediocre to consistently great.

The Flywheel – Recurrent, margin-generating heart of a business (see here)

The Flywheel contains two parts, with 3 thematic concepts in discipline :

Part 1: Buildup of Good to Great Companies

Level 5 Leadership (Disciplined People)

  • Good to Great organisation have Level 5 leaders
  • A paradoxical blend of personal humility and professional will.
  • Ambitious first and foremost for the company not themselves
  • More a plow horse than a show horse
  • Looks out window to attribute success and towards a mirror for failure

First Who…Then What (Disciplined People)

  • Good to Great companies first get the right people on the bus before figuring where to drive it
  • “A genius with a thousand helpers” is not sustainable
  • Salary should not incentivise the wrong people with the right behaviours
  • Instead it should attract the right people and keep them in the right positions
  • The right person has more to do with character traits and innate capabilities than specific knowledge, background or skills
  • The ultimate bottleneck for growth is not markets, technology, competition or products, but keeping the right people
  • Put your best people on your biggest opportunities, not your biggest problems

Confront the Brutal Facts (Disciplined Thought)

  • The Stockdale Paradox – Retain faith that you will prevail in the end regardless of the difficulties WHILST confront the brutal factors of your current situation
  • Culture of opportunity to be heard – for extracting truth
    • Leading with questions
    • Promote dialogue and debate, not coercion
    • Conduct autopsies without blame
    • Build red flags mechanisms – for information that cannot be ignored
  • Instead of trying to motivate, consider how to prevent de-motivation
  • The right people are naturally motivated

Part 2: Breakthrough and Rapid Growth for Good to Great organisations

Hedgehog Concept (Disciplined Thought)

  • Three circles for the concept, which have focus and drives success for Good to Great Companies:
    • Passion
    • Best in world potential
    • Economic Engine – one metric that has single greatest impact e.g. profit per x
  • The council for an iterative process to reach the concept: Questions –> Dialogue and Debate –> Decision and Execution –> Autopsies and Analysis
    • 5-12 people
    • Each member capable of debating and challenging with respect
    • Range of perspectives with deep domain knowledge
    • An informal standing body that meets periodically
    • Does not seek consensus
  • Took on average 4 years to develop

Culture of Discipline (Disciplined Action)

  • Culture of disciplined people who take disciplined action within the 3 circles
  • Incompetence and lack of discipline breeds bureaucracy
  • A duality of a consistent system that gives people responsibility and freedom within its framework
  • Budgeting is a decision on activities that are either fully funded or not funded at all
  • A stop doing list is more important than a to do list

Technology Accelerators (Disciplined Action)

  • Good to Great companies pioneer in carefully selected technologies that fit within Hedgehog concept
  • Technology is an accelerator of momentum not a creator
  • Great companies respond to technology with thoughtfulness and creativity, and are motivated to turn potential into results whilst mediocre companies react from fear of being left behind