GOOD TO GREAT

-BY JIM COLLINS

NAME – BHUMIKA SAWLANI

CLASS – TYBCOM(Hons.)

DIVISION – B

ROLL NO. - 8
The book Good to Great : Why some companies take leap… while others don’t by a very famous
and established author, Jim Collins is not a good book it’s a great book. It was published in the
year 2001 and turned out to be a great success. Even today, after about 20 years since it was
published, many people working as managers still refer to it to make their companies not only
good but great. In this book, Jim talks mainly about Discipline i.e. Discipline in people, Discipline
in thoughts and Discipline in action. He also tells us about analysing and figuring out the
aspects and variables which allows only a few number of companies to turn from merely good
to great. This book does not talk about those companies which have always been great.
Instead, Collins talks about the companies which have remained good for a long time and then
how did they started coming in the list of great companies.

CHAPTERWISE SUMMARY

CHAPTER 1
GOOD IS THE ENEMY OF GREAT
In this chapter he firstly talks about how he got the idea to write this book. He, along with his
research team commenced a five-year research process, an exploration of the inner workings of
good to great. He mentions that any organisation can turn to great if they follow the framework
and ideas listed in the book.  The most significant element in choosing the company was a
period of growth and constant success that outperformed the market or industry average. After
analysing and comparing the companies, Jim concluded “It is possible to turn good into great in
the most unlikely of situations.”
Collins also provided some of the most important conclusions sifted from the research. Many
factors such as CEO compensation, technology, mergers and acquisitions, and change
management initiatives played minimal role in fostering the Good to Great process.
He says that the rest of the book depicts a process of buildup followed by breakthrough,
divided into three main categories : Disciplined people, Disciplined thought, and Disciplined
action. These are the main factors which helped the companies to achieve the level of
greatness.

CHAPTER 2
LEVEL 5 LEADERSHIP
Jim firstly talks about Darwin E. Smith who was the former CEO of the paper company Kimberly-
Clark. Even though Smith was a very tranquil and kind person, he took the company to the
heights of greatness because of his focused and ambitious nature.
In this chapter Collins mainly talk about The Five Levels of Leadership. He describes level 5
leaders as a combination of great personal and professional skill. These leaders work for the
development of their company rather than satisfying their personal needs. After the research,
Jim and his teammates started believing that all the companies which have been transforming
from good to great are run by level 5 leaders. He also talks about some more characterstics of
the 5 level leaders like honesty and bravery.
The level 5 leaders make sure that even after their exit from the company, it survives. These
leaders, before their exit, makes sure that they create a set platform for the successors whereas
others did the opposite.
In his research, Collins notices that while giving the interview for the book, these leaders only
acclaimed others and not themselves for the success of the company. He also found that these
leaders were kind. However, the leaders of other companies were egoistic and only thought of
themselves rather than the company.
In addition, he says that these leaders do not blame their luck when they face failure. Instead
they take full responsibility of it. He also believes that anyone can become a level 5 leader if he
or she follows the guidelines mentioned in the following chapters.

CHAPTER 3
FIRST WHO … THEN WHAT
In this chapter Collins talk about recruiting right people for the organisation to grow. Earlier
Collins and his team of researchers believed that companies first state their aim and then
choose the people. However, after the survey they found out that the case was opposite. The
Good to Great companies first choose the right people and then work towards their vision. He
says that it is like choosing right passengers for bus before deciding where to go.
He describes this with the help of an example of former CEO of Wells Fargo, Dick Cooley. In
1970s ,he already knew that the banking industry will face major challenges. So, he started
recruiting a talented team. Then, when the banking industry faced deregulations only his
company showed better results than the other companies.
He says that it is not about choosing the right people. Instead it is about getting the people first
before implementing any major plans or strategy for company’s growth. It is not necessary that
the leaders chosen should be genius. They will only help the company progress and not sustain
their success. There are some companies who did good under one leader but after his exit they
faced downfall.
In addition, he talks about employee compensation. He says that what matters is to whom you
are paying and not how are you paying.

CHAPTER 4
CONFRONT THE BRUTAL FACTS
The author of the book starts to describe the chapter by talking about two traditional grocery
stores i.e. A&P and Kroger. In the early twentieth century, the former was performing better
than Latter. But after World War I and II, the scenario changed completely. Kroger confronted
the brutal facts i.e. changed its entire working system after the war to compete in the market
whereas A&P followed its old system. Collins says that Kroger is a very good example of a good
to great company as it very easily and actively confronted all the difficult facts.
Kroger rose to great heights. They conducted a research in which they found that
supercombination stores were a better choice than the stores which existed earlier. They also
did few more changes in their organisation based on the facts and not dreams like A&P. Collins
says that all the organisations must make changes according to the industrial facts, no matter
how brutal they are. All the good to great companies acted upon this concept, whereas their
competitors did not.
Jim talks about two more companies; namely Pitney Bowes and Addressograph, which almost
shared the same position in 1970s. After few years, Bowes growth was much higher than
Addressograph. So to get over this, Addressograph appointed Roy Ash as the new CEO of the
company. He stuck to a single strategic Plan even when the research showed the opposite.
Whereas the Bowes focused on the facts even though they were brutal and came in the way of
their success. Collins says even though Ash was a charismatic leader, this behaviour can come in
the way of their growth process.
One more thing that Collin states is that companies which are great focuses on questions rather
than answers. Like the CEO of Circuit City, Alan Wurtzel was famous as he continuously
questioned the members at top management so that he can choose the right path to proceed.
He says that in this style of learning understanding is very important.
Also, the companies which are great believe in debates and communication. Like Alan CEO Ken
Iverson of Nucor became a socratic moderator for their company. He also liked to carry on
debates in the company for taking any important decision. Furthermore, Jim also notes that
these companies focused on conducting autopsies of failed initiatives rather than wasting their
time thinking about the punishments. These companies came up with ‘red flag’ mechanism to
help their employees.
Additionally, he says that the employees of these companies believed that they would survive
in every situation even if it is harsh. According to the research team their belief became the
reality.
Following this further, Collins came up with a framework of Stockdale Paradox to discuss the
psychology of management teams. Jim Paradox was an army officer in U.S. during the war with
Vietnam. He was the leader of the prisoners and helped them survive throughout by motivating
them but did not give them false hopes. Jim Collins describes the Paradox as to never lose hope
for success but along with it do not ignore the Brutal Facts.

CHAPTER 5
THE HEDGEHOG CONCEPT (SIMPLICITY WITHIN THE THREE
CIRCLES)
The next step for a company to turn from Good to Great is the Hedgehog Concept. In this
chapter Collins compares two animals fox and hedgehog. He says that Fox tries many clever
ways to catch the Hedgehog whereas Hedgehog uses his spine to protect himself. This story
describes two type of people: One who tries to discover many strategies or plans and say that
the world is complex. However on the other hand there are people who have just one view and
simplify everything so that they can work on their view.
Collins says that the people who led the good to great companies, all followed the principle of
Hedgehog. They were very clear about their decisions. He explained this by comparing two
companies which belonged to the Pharmaceutical Sector, namely, Walgreen and Eckerd. Where
Walgreen had a very concise mission i.e. to make profits as per customer visit, Eckerd struggled
for the same. So here Walgreen succeeded.
After conducting a research with his research team, Collins came to know that the Hedgehog
Concepts that were used by these companies were based on three major dimensions. These
dimensions were known as the “Three Circles”. The first one is knowing what the company can
and cannot be the best in the world at. Collins says that this factor is not about making a plan
to be the best, instead it is about knowing what is the capacity of the company which can help
it succeed.
Again Collins explains this with the help of an example of two companies i.e. Abbott and
Upjohn. Abbott focused on making the best cost-effective health care products whereas Upjohn
was unable to find a specific Hedgehog Concept which could have helped them succeed. It is
not necessary that the company’s core business should be similar as its Hedgehog concept and
also there is no need to be good at all things instead you should be good at one thing and focus
on that.
The second is finding the key economic engine of the company and carry on the further process
according to it. Collin does not talk about these economic insights in depth but he does tells us
that these good to great companies discovered at least one important economic factor like for
example Profit per Store. Walgreens also preferred the ratio of increasing profit per customer
over per store. However, competitors did not use these denominators.

The third and the final is the requirement of the companies and their leaders is to know about
their passion and work accordingly. The workers of Philip Morris said that they felt very good
and contended working for the company. Good to Great companies always work towards their
passion. This passion can be related to what the company is actually doing or what the
company stands for.

Overall, Collins says that the basic concept of these dimensions is to create a way for
understanding. The competitors of these companies always focused on growth and ignored
these three important questions. Therefore, he says that Hedgehog Concept leads to growth
but growth is not a Hedgehog concept.

CHAPTER 6
A CULTURE OF DISCIPLINE
In this chapter Collins tells a story of the cofounder of the biotechnology company Amgen,
George Rathmann. He always focused on creating a culture of discipline in his company even
after the success of Amgen. He says that he learned this principle while working at Abbot
Laboratories where they constantly and rigorously worked towards their goal.
Each and every employee working in Abbot was held responsible for every item of cost, income,
and investment. This strict system helped the company as well as employees to grow and
achieve success. The company was not always strict with employee, it also gave them freedom
which helped in the transformation of a company from good to great.
Collins talks about the culture of discipline by highlighting four main key points. Firstly, he says
that the companies should build a framework which makes their employees more responsible
in their work. Employees should be aware about what is expected from them and should work
within their boundaries. The decisions should be made within these boundaries. Right people in
every organisation are must so that they can operate easily.
He says that the people working in the organisation must have self-discipline rather than
imposing discipline externally in the organisation. The people are the second most important
part of the culture of discipline. He says that people working in good to great companies are
themselves responsible.
Collins and his team found that the companies which showed a great discipline were
unsustained comparison companies. However, discipline was forced externally in these
companies. The discipline vanished as soon as the leader left the company. Therefore, the third
most important point is to build a strong culture in the organisation, not dictatorship.
Lastly, fanatical adherence to the hedgehog concept is the fourth component of the culture of
discipline. Here, executive team should have the ability to let the hedgehog concept without
getting distracted. However, the competitors mostly did acquisition which had no relation with
the company’s core concept. He also says that many times good to great companies refused
once in a life time opportunity just because it did not match their company’s core concept.
At the end, Collins suggests a method, namely, “stop doing lists”, to achieve these four
components of discipline. He says that all the good to great companies cut out the activities
which were not related to their hedgehog concept. He notices that in these companies
budgeting means putting all the funds in the activities which are related to hedgehog concept
rather than spending on other useless and unrelated activities. Collins says that discipline is
about doing helpful things and not unhelpful things.

CHAPTER 7
TECHNOLOGY ACCELERATORS
Collins starts describing this chapter with a story of an internet pharmacy named drugstore.com
which gained a high market in 1999 as soon as it went public even though there was no surety
of returns to its investors. Most people said that it happened because of its new and exciting
technology. There was always a pressure on Walgreens to enter the world of internet but he
decided to move slowly and methodically. Later, he introduced some web features.
All the good to great companies say that technology is an asset for the company if used
methodically. Collins says that this is not just about internet. It includes all the new technology
which helps in the success of the company. The good to great companies use unique
technology, which are closely related to their hedgehog concepts.
Collins gives the example of the companies which became good to great with the help of
technology. Like, Kroger firstly adopted bar code scanners whereas Gillette succeeded in
manufacturing razors. All the good to great companies firstly developed the hedgehog concept
and then used technology to support this concept.
These good to great companies were the first to use the technology for hedgehog concept.
However, the competitors could not become the pioneers in technology and those who did
were not able to sustain their results.
Moreover, the executives of these good to great companies did not consider technology as the
reason for their success but it helped in the transformation of the company. They give the full
credit to the culture and consistency. Technology did support them but was not the cause for
their success. He says that the competitors failed because they completely relied on the
technology which should not be the case.
Collins states that some of the members in his research team were not in the favour of
including a chapter on technology in this book because it was like a subset of disciplined action
which was covered in the early chapters. But then the team decided to include it as they
considered it as a very important part of the excellence of the good to great companies. He says
that the comparison companies were working on technology because of the fear of being left
behind rather than creativity. He, along with his research team noted that the good to great
companies acted vey calmly and slowly towards the changes keeping in mind the hedgehog
concept whereas the competitors always acted fearfully and that’s why could not succeed.

CHAPTER 8
THE FLYWHEEL AND THE DOOM LOOP
Collins starts this chapter by describing the symbol of the flywheel as the metal disk which
should be pushed slowly and steadily, again and again to create momentum under the force of
its own weight. Even though the results can be great it is very difficult to find out which push
caused the momentum. It is the combination of all the small actions. Collins says that this
process of buildup and breakthrough is visible in the conversion of the companies from good to
great.
All the success of these companies was because of this Flywheel Model. However, the success
did not start until the flywheel was moving fast. Collins says that the public thinks that the
theses transition to greatness is very fast but the case is actually different. It takes gradual
effort to reach the heights of success. Like, media said that the success of Circuit City is
overnight however it took decades for this.
He says that he and his team repeatedly tried to find out the one big thing which led the
momentum of breakthrough of these companies. However, their results showed that it was a
process of continuous efforts and not a single moment for breakthrough. There were no names
or taglines or launch events for these transformations. They happened very steadily. These
companies focused on long term goals rather than short term which were dire.
This slow and steady process which creates tangible result was known as “the flywheel effect”.
This increased momentum generates the feeling of excitement and enthusiasm in internal
employees as well as external investors. With this flywheel and correct people, a feeling of
motivation and commitment is generated among the employees without being forced by the
management. These good to great companies used the tool of steady gains of flywheel for
their success.
In contrast, Collins along with his team found a pattern in the competitors named as Doom
Loop. These companies always introduced new motivational programs and jumped directly to
breakthrough phase. This lack of consistency created a resistance in building slow momentum
required by flywheel. These competitors appointed new leaders which also prevented
momentum. Collins notes that the competitors acquired companies to establish momentum
whereas the good to great companies made acquisitions after creating momentum with
flywheel and also after defining the hedgehog concept.

CHAPTER 9
FROM GOOD TO GREAT TO BUILT TO LAST
In this last chapter Collins tries to bring together the concept of this book along with his
previous book i.e. Built to Last, which examined companies long term greatness. He with his
research team decided to conduct a good to great research so that the results should not
overlap with that of previous book.
After completing the research he finds out several relationships between them. He says that
Good to Great is a prequel to Built to Last. One of the relationship that the leaders discussed in
Built to Last followed the principle of Good to Great companies.For example, Hewlett Packard
and other Built to Last companies often followed the principle of Level 5 Leaders for their
success.
He also notices that both the books talk about the idea of core ideology. Many Built to Last
companies had the mission of making money. Collins says that these ideologies are related to
good to great companies passion.
Collins relates the concept of Built to Last with those of Good to Great. He mainly focuses on
the connection between Hedgehog (Good to Great) and Big Hairy Audacious Goal (Built to Last).
The previous book failed to explain the concept of BHAG. Collins says that the key foundation of
good BHAGs is the three circles while bad BHAGs are not based on insight. Example of good
BHAG is Boeing entering into commercial aircraft production. The company will always rely on
these three circles.
Collins concludes that a great company requires the understanding of all the key concepts from
both the books. But the only requirement of each and every principle is the consistent
application without any gaps. He says that achieving greatness is easy but its maintenance is
difficult.

CONCLUSION
Overall, Collins is trying to say is that it is possible to build something which is great rather than
something good. He says that good organisations just waste their money, time and energy.
Collins says that commitment to greatness relieves burden. If the organisation focuses on
becoming great it keeps the employees motivated whereas if they just want to become good
then they are really careless and not at all focused.

CRITICAL REVIEW
The book Good to Great by Jim Collins is incredibly well researched and also documented
nicely. All the details are given about the research methods clearly. It is a classic book on
business development. After a meticulously researched study, he and his team answered the
question: What common characteristics are shared by companies that made the change from
good to great?
Jim is full of enthusiasm and curious and made his rigorous research so easy to read. He
conducted a research in which his and his team found out all the GTG companies. In the book
along with the GTG companies, he also mentioned their competitors which lacked behind in
this race of transforming from good to great. In this book he also mentioned some of his Eureka
Moments. He gave a proof of each research he conducted which was backed up by data
analysis.
Earlier people used to think that leader is everything. However this is not the case. They have
ambition for the company more than themselves. He also talks about hiring right people at
right place. Once the people are in place, the facts faced and the questions debated,
breakthroughs can be achieved and good can turn into great.
One takeaway idea I liked was a “Stop Doing List”. Keep your regular lists but also start thinking
about what needs to stop, what’s holding you or your company back. He always said that we
should face the truth no matter how much harsh it is.
Good to Great is a book which is filled with examples of different companies and so it is very
appealing and attractive. It is okay to flip or skim your way through, as Collins has thoughtfully
highlighted essential ideas in every chapter so nothing is missed. If you have a business, you
must definitely go through this book as it will be of great help. This book tells us that we should
not always look for competence instead we should work towards the greatness of the
organisation.