Book Review: Good to Great, by Jim Collins
My third book in this book review series is the most recommended. As someone who purposely pursued an MPA rather than an MBA, I don’t usually gravitate toward business books. My passion is for public service, and let’s just say I do not adhere to the belief that government should be run like a business.
Are there great ideas and concepts in business that can be applied to the public sector? Sure! But at the end of the day, if a government is making a profit, they’re doing it wrong.
Despite my reluctance, I took the advice of some very fine people and checked out this title from the library. In short, it’s an eye-opening read.
The Review
Good to Great reads like a college textbook and a how-to guide. It is very data-driven — which I admire — and makes significant use of case studies and analysis to make its arguments.
The book chronicles the transformation of several “good” companies in a myriad of industries as they grew into even more successful “great” ones. Companies like Kimberly-Clark, Gillette, Fannie Mae, Nucor, Circuit City (not so great anymore), Philip Morris, Walgreens, and Wells Fargo (also not so great). Some may disagree with Collins’ definition of what makes a company great (he primarily uses stock and profit growth), but that IS the primary goal of private business. All the while, he identifies the key factors and concepts that made the transition possible.
In the space below, I will highlight a few of those key factors with short descriptions and personal observations.
Level Five Leaders
This is the factor I found most interesting in Collins’ analysis, because it runs so contrary to the popular notion of a great leader. If you ask a random stranger about the personality of a top CEO, chances are they will depict a bombastic, charismatic, and larger-than-life executive. And of course, we see these type of executives everywhere, in both the public and private sectors.
But in Collins’ research, these were not the types of transformative leaders that brought their organizations to greatness. See, the bombastic CEOs are often too focused on their own success, and not on the company’s. Can this type of leader be successful? Yes, of course. However that success doesn’t often last after that leader has moved on.
Collins’ “Great” companies were led by what he coined “Level Five Leaders.” This type of leader combines tremendous personal humility with unwavering professional resolve. They do not seek personal glory, they seek organizational success. They often pass the credit for success to their teams, but take full responsibility for the failures. Some examples of level five leaders I’ve found include 16th President Abraham Lincoln and famed investor Warren Buffet.
Reading this book, I became intrigued by the popular cognitive dissonance about what make a strong leader. So I did what any curious Millennial would do and posted a question on social media. I asked my friends on Facebook and Twitter, “What are the most important qualities in an effective leader?”
Here are some of their responses:
“Awareness. Effective Communication. Dependability.”
“Integrity, Compassion, and Grit.”
“I would say the ability to listen, organized thinker, compassionate, on top of their game. No one wants to follow a leader who isn’t excelling themselves. And humility.”
“Ability to do the job themselves first. Group success over individual credit. Valuing people over numbers.”
“Teachability”. Allowing others to speak into your life allows you to gain a clearer understanding and make more informed decisions. It also keeps one humble.”
“Listening. Encouraging collaboration. Not elevating yourself above the rest of the team — being able to work with a team and not always be the top dog. Taking the heat when something goes wrong, even if it isn’t your fault. Picking up the pieces and helping the team move on, learn and do better next time. Celebrating others.”
I must admit, I was somewhat surprised at how closely my friends’ ideas of effective leadership adhered to the Level Five concept. I’m not saying that my friends list is a representative example of the population, but it makes you wonder about the disconnect between the populace and those who choose CEOs in America’s boardrooms.
Stockdale Paradox
To further illustrate his Level Five Leader concept, Collins tells the story of Admiral Jim Stockdale and his experiences as the highest ranking prisoner of war in the “Hanoi Hilton” during the Vietnam War.
Jim Stockdale is the definition of badass. He was tortured more than 20 times from 1965 to 1973. To prevent himself from being used for Vietcong propaganda films, he once beat himself with a stool and cut himself with a razor. Despite knowing he could suffer torture or death if caught, he included secret codes to pass intelligence information in his letters to his wife. And he developed a method of communication with other prisoners using taps so prisoners could communicate with one another clandestinely. All of this, he did enduring some of the harshest and most dire conditions imaginable.
How did he do it? Here’s how he explained it to Collins in the book.
“I never lost faith in the end of the story… I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade.”
Seems like an inspiring and optimistic answer, right? But remember it’s called the Stockdale PARADOX. When Collins asked who were the ones that didn’t survive, Stockdale had a surprising answer.
“The optimists. Oh, they were the ones who said, ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say,‘We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.”
“This is a very important lesson. You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
Effective leaders then never lose faith in their ability to achieve their objective, but also confront the “brutal facts” of their present reality to reach it.
First Who, Then What
Another characteristic of “Good to Great” companies that Collins observed was their people first approach. Contrary to what organization theorists posited in my public administration courses, they tended to put together a strong team BEFORE deciding things like strategy, vision, and organizational structure.
Collins — a big fan of metaphors and imagery, it seems — coined it as getting “the right people on the bus” and the wrong people off.
After getting the right people on the bus, that’s when you get them in the right seats. From there you can start to determine your organization’s vision and how to get there.
Hedgehog Concept
Good to Great companies, Collins argues, are so successful in part because they keep things simple. Instead of trying to be the best at all things, these companies endeavor to be the best at one thing and stick to it.
Collins calls it a “Hedgehog Concept” and uses a tale about a hedgehog and a fox to illustrate how it works.
The clever fox is always trying to eat the hedgehog, and is always working to find new ways to accomplish his goal. But each time the fox gets close, the hedgehog rolls himself up into a tight, spike-protruding, impenetrable ball. The fox, thwarted once again, leaves to devise another plan of attack.
An organization’s “Hedgehog Concept” lies at the intersection of three concentric circles in a Venn diagram: “What are you deeply passionate about?”, “What can you be the best in the world at?”, and “What drives your economic engine?”
Social and public sector organizations can modify this concept to replace the “economic engine” circle with one for a “resource engine,” i.e. volunteers, finances, materials, etc.
The companies Collins studied found success when they identified and understood what they were the best at doing, and stuck to it. Often times it took them years to finally understand what their concept was, but once they found it they took off.
The Flywheel
The last concept I’ll discuss from Collins’ book is his Flywheel metaphor. Success you see, is not always a sudden occurrence. In most instances, it involves persistent efforts for an extended period of time.
There are no epiphanies or “Aha!” moments. Instead it is the slow and steady building of small success upon small success until the momentum and growth reaches a fever pitch.
Listen to Collins explain it:
Steady and persistent efforts then, focused on the organization’s vision, are the key to greatness.
Conclusions
Though not targeted to my particular career track, I still learned a lot from this book. I learned that the most effective leaders tend to be more humble than egotistic. I learned that who you have on your team is an integral part of your success. I learned that it is better to keep things simple and focus on your strengths than to try and be everything to everyone. And I learned that breakthroughs are not an overnight occurrence, but take prolonged and persistent efforts.
Whether you are in business, public service, or a nonprofit organization, this book can help you better focus your actions to leverage greater success.
