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Book Review: Good to Great

Good to Great by Jim Collins was published in 2001 and it is regarded as a modern classic of management theory. He discussed and identified some key factors that can convert good or average companies into a great company.

Collins selected various companies like Abbott, Well Fargo, Phillip Morris, Circuit City, Kimberly-Clark and many others to show that these companies have sustained their growth as compared to other companies in the market.

He explained through various facts and figures that companies who have transformed from Good to Great are those companies who have followed three main rules. Those three rules are disciplined people, disciplined thought, and disciplined action.

He further stated that one of the main factors that made a huge difference is their leadership which he termed as “Level 5 Leadership”. According to the study, all those good to great companies’ leaders have almost same characteristics that these leaders always put their company’s interest before their own interest.

Companies who have achieved success or became ‘Great’ are those who have a good leadership team. According to the writer success can only be achieved by appointing right person at the right position and fire all those team members who are coming in the way of company’s success.

Collins stated that always deal with problems honestly. He gave a four- step process to deal with problems. These are Lead with questions not answers, Engage in dialogue and debate. Not coercion, Conduct autopsies without blame, and Build ‘red flag’ mechanisms.

He also introduced hedgehog model in his book which describes that companies should adopt those strategies and rules that are easy to understand and must be practical. He gave the following three points criteria:

  • Determine what you can be best in the world at and what you cannot be best in the world at
  • Determine what drives your economic engine
  • Determine what you are deeply passionate about

Hedgehog model can only be followed when there is a culture of discipline in the company because it will enable management to take disciplinary actions. Determination and a sense of responsibility can help in developing a culture of discipline in the company. Team with disciplined members would not require any management because they were hired because of their disciplined characteristics.

Collins argues that great companies use technology as an accelerator not as a momentum. Companies create technology; technology could not create any company. Technology should only be used if it fits with your Hedgehog concept. According to him, the best way to deal with technology is by following this cycle “Pause — Think — Crawl — Walk — Run.”

Collins described in his book that having the basic understanding of ‘Level 5 leaders’ you can easily understand the Hedgehog Model. In order to be in the list of a ‘Great Company’ you should have a responsible team who has the ability to take disciplined actions which should be in consistent with its hedgehog concept.

Sean Coyne

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