Good to Great

“Can a good company become a great company, and, if so, how? Or is the disease of ‘just being good’ incurable?” 

This is a genuine question that Collins seeks to answer in this book, as this inquiry leads to the research that defined the qualities of a company that transcends “goodness” and moves into “greatness.” Collins defines “just being good” as a disease, casting a company’s lack of greatness (as he has defined it) in highly negative terms.

“There is nothing I find more exciting than picking a question that I don’t know the answer to and embarking on a quest for answers.” 

This passage serves as Collins’s own explanation for the motivation behind the book. The journey of discovery and answers here refers to the inquiry behind the central premise of the book: whether there are common factors that unite companies that underwent a transformation from good to great.

“We all have a strength or two in life, and I suppose mine is the ability to take a lump of unorganized information, see patterns, and extract order from the mess—to go from chaos to concept.” 

Collins speaks to his own ethos here, justifying his credibility by means of his own strength as a researcher and data interpreter. He claims to have the ability to make sense of the chaos of raw data, putting it to meaningful, even didactic application. Though he doesn’t say so explicitly, this talent serves as a kind of Hedgehog Concept for him—a specialized area in which he can pursue excellence.

“That good is the enemy of great is not just a business problem. It is a human problem.” 

Collins expands the scope of the book, suggesting that the search for greatness and the complacency that leads to “just being good” exist beyond the realm of the business world. Instead, as Collins says, these are human problems with implications that reach into our personal daily lives in the form of education, religion, government, etc.

“Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company.”

In his argument about the effectiveness of Level 5 leaders, Collins emphasizes the importance of letting go of egocentrism. The most effective leaders in the good-to-great companies were able to realize that their own pride and reputation were unimportant in the context of a company’s success. Rather than being heroes or saviors, these kinds of leaders are facilitators.

“The good-to-great leaders never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extraordinary results.” 

Collins again emphasizes the notion that Level 5 leaders let their actions and results speak for themselves. These leaders are not motivated by fame or industry praise, but by the idea that they could be instrumental in elevating results at their respective companies.

“The great irony is that the animus and personal ambition that often drive people to positions of power stand at odds with the humility required for Level 5 leadership.”

Leaders who become CEOs of major companies whose stock is publicly traded must possess a certain degree of ambition. The differentiating factor of Level 5 leaders, however, is that their ambition rests in what the company can accomplish, versus the individualistic ambition that characterizes leaders who may have charisma or celebrity, but who do not put the company’s goals above their own.

“I believe—although I cannot prove—that potential Level 5 leaders are highly prevalent in our society.” 

As Collins concludes his chapter highlighting the case studies and key qualities of Level 5 leaders, he suggests that Level 5 leaders are actually quite common, but that companies tend to overlook these types of leaders when recruiting for CEO positions. Since Collins views his book’s findings as broadly relevant, he may also be alluding to people outside the corporate world who nevertheless act as Level 5 leaders in other areas.

“To be rigorous, not ruthless, means that the best people need not worry about their positions and can concentrate fully on their work.” 

Collins juxtaposes two types of company cultures. A ruthless culture, which is toxic by nature, relies on firing and layoffs without much consideration, and employees are constantly fearful of what may happen next. By contrast, good-to-great companies possess a rigorous culture where discipline and high standards are expected, but where consistency and focus give employees the ability to concentrate on what they need to accomplish rather than on whether they will still be employed the next day.

“It might take time to know for certain if someone is simply in the wrong seat or whether he needs to get off the bus altogether. Nonetheless, when the good-to-great leaders knew they had to make a people change, they would act.” 

Collins emphasizes the importance of making strategic personnel decisions, which require patience and a series of keen observations. Good-to-great leaders don’t impulsively fire or downsize, but instead are precise and objective in their assessment of personnel. To cultivate a culture of discipline, cohesion and consistency amongst employees are essential.

“Members of the good-to-great teams tended to become and remain friends for life.” 

Here, Collins observes that relationships on highly effective teams transcended the purely professional, as these teams often built long-lasting friendships. Within a culture of shared goals and meaningful work, these friendships were genuine, authentic bonds formed between people who were not preoccupied with an unhealthy work culture (which often negatively affected relationships at direct comparison companies).

“Leadership is equally about creating a climate where the truth is heard and the brutal facts confronted.” 

Collins argues that confronting the “brutal facts” is necessary for truth within a company. Without the transparency that comes with confronting a company’s most significant challenges and hurdles, the truth becomes elusive, which in turn negatively affects a leader’s ability to be effective.

“Leading from good to great does not mean coming up with the answers and then motivating everyone to follow your messianic vision.” 

Here, Collins suggests that highly effective leaders start with questions, welcoming dialogue in pursuit of answers rather than individually solving their company’s problems and then trying to rally the troops. Level 5 leaders are humble by nature, committed to efficiency and results over individual glory, so the pressure to be a messianic hero doesn’t serve as a distraction.

“In a world overrun by management faddists, brilliant visionaries, ranting futurists, fearmongers, motivational gurus, and all the rest, it’s refreshing to see a company succeed so brilliantly by taking one simple concept and just doing it with excellence and imagination.”

In this passage, Collins is alluding to the immense success that Walgreens experienced simply by adhering to its Hedgehog Concept. Walgreens uncomplicated its goals by focusing on one thing: to be the best in the world at convenient drugstores, which in practice meant increasing profit per customer visit. This was not a revolutionary idea or marketplace fad, but a simple idea that Walgreens was able to execute exceptionally well.

“To go from good to great requires transcending the curse of competence.” 

Good-to-great companies are able to reach greatness by discovering what they can be best in the world at rather than contenting themselves with doing things in a manner that is merely “good enough,” This intense focus on being better than anyone else at one thing is a necessary ingredient in reaching greatness. The negative connotations of Collins’s language here (e.g., “curse") echo his earlier description of “just being good” as a disease.

“Most of us lead busy but undisciplined lives. We have ever-expanding ‘to-do’ lists, trying to build momentum by doing, doing, doing—and doing more. And it rarely works.” 

Here, Collins acknowledges that most people know how to work hard, or at least how to keep busy, but that this constant “doing” doesn’t generate results on its own. He then argues that instead of only making “to-do” lists, the process of making “stop-doing” lists is actually more important. By removing aspects of your work that are not central to your core priorities, you become more efficient, thereby increasing your capacity to focus on what truly matters.

“Technology-induced change is nothing new. The real question is not, What is the role of technology? Rather, the real question is, How do good-to-great organizations think differently about technology?” 

In this passage, Collins emphasizes that technology itself is not enough to elevate a company from good to great. Every industry in history has changed by means of new technologies, but the difference between good and great companies lies in how each company approaches technology and its role as an ally to the company’s goals.

“When used right, technology becomes an accelerator of momentum, not a creator of it.” 

A close analysis of the research findings on the good-to-great companies led to the conclusion that technology accelerated momentum, but that in isolation new technology produced only negligible results. New technologies are useful tools—ingredients in a well-functioning company’s operations—but technology alone cannot create the momentum required to take a company from good to great.

“Those who built the good-to-great companies weren’t motivated by fear.” 

Here, Collins exalts the commitment that good-to-great companies demonstrated in pursuing excellence for its own sake. This pursuit of excellence on their own terms allowed these companies to achieve greatness, leaving fear by the wayside. In the specific cases of Pitney Bowes or Kimberly-Clark, for example, greatness happened because of an uncompromising commitment to their own vision, regardless of how others within their industries perceived them.

“We’ve allowed the way transitions look from the outside to drive our perception of what they must feel like to those going through them on the inside.” 

Transformations at good-to-great companies happen gradually through persistence and repeated efforts. To the outside observer, however, these transitions seem to happen overnight. This results in a distorted understanding of what makes breakthrough possible—for instance, an individual genius’s epiphany rather than the prolonged collaboration of many people.

“When I look over the good-to-great transformations, the one word that keeps coming to mind is consistency.” 

Good-to-great companies are in the business of playing the long game, each generation building upon the next in a continuous cycle of improvement instead of constantly trying to reinvent themselves with every change in leadership or new industry fad. This persistence is key to what Collins calls the momentum flywheel.

“This notion of preserving your core ideology is a core feature of enduring great companies.” 

Collins argues that the preservation of core values, regardless of what the values actually are, is vital in the successful transition from good to great. At the same time, stimulating progress is also important. For good-to-great companies, the challenge is how to balance preserving the core values while constantly reexamining current practices in order to maximize efficiency and results.

“Perhaps your quest to be part of building something great will not fall in your business life. But find it somewhere.” 

Collins shifts his emphasis from the business world to personal advice. The key concepts of the good-to-great transition can apply to other contexts, such as in churches, schools, community organizations, or nonprofits. Collins also loosens his definition of greatness—previously a pragmatic profits-based definition—in order to encourage people that they don’t need to be a high-profile CEO to apply these concepts to their lives.