What's the secret behind the enduring success of some of the best companies the world has known?
In this summary of his best selling book, Good to Great, Author Jim Collins has this to say:
Greatness is not a function of circumstance. Greatness, in turns out, is largely a matter of conscious choice, and discipline."
"The good-to-great companies made a habit of putting their best people on their best opportunities, not their biggest problems. The comparison companies had a penchant for doing just the opposite, failing to grasp the fact that managing your problems can only make you good, whereas building your opportunities is the only way to become great."
Who should read this?
CEOs, executives, business owners, managers, and anyone who wishes to know what it takes to take the company to the next level and remain successful for a very long time.
Good to Great Main Ideas
Quick Summary of Good to Great
A Hedgehog Concept is essential in finding the true path to success for any company.
To determine what you're Hedgehog Concept is, you need to identify the following:
- What you (and your company) is passionate about.
- What can you be world-class level at.
- Which economic indicator should you focus on.
The author told about the story of the drugstore chain Walgreens as a prime example of a Hedgehog Concept in action.
By focusing on being the most convenient drugstore with a high customer profit, they were able to buckle down, get laser-focused in obtaining this goal. They didn't do anything else that will not contribute to this game plan. Each move and action must clearly satisfy this one true goal. And because of that, they became a market leader and achieved true success.
Success doesn't happen overnight.
It's a product of small, incremental steps that happens over a long period of time. In order to gain momentum, the people must be disciplined enough to stay on course and execute based on their Hedgehog Concept.
Companies should realize that new technology is only to be utilized if it serves the sole purpose of accelerating the momentum of their small steps towards their goal.
Walgreens realized that having an online presence (during the e-commerce boom era) would greatly accelerate them towards their goals since it ticks the boxes of their Hedgehog Concept (makes it more convenient for their customers while generating a healthy profit). While other competitors jumped the bandwagon of the ecommerce wave simply because it was the "hot" thing back then, Walgreens knew that it actually would help them speed up their pace as it aligns with their Hedgehog concept.
Level 5 leaders play a crucial role in building a lasting and successful business.
A level 5 leader is defined as someone who excels in managing people and at the same time sincerely trusts and believes the company's mission and vision and will take the significant steps (no matter how big or small, easy or difficult) towards it.
And while these level 5 leaders are uber-valuable, they understand that they merely serve as a vessel in realizing the company's hedgehog concept. They remain humble and shy away from any recognition. In other words, they are not vain nor seek to do these things for the sake of being famous and popular.
The polar opposite of a level 5 leader is the CEO who have egos the size of football fields. Individuals who think they are above everyone else. Who think that the company exists to serve them, not the other way around.
Hiring the right people at the right time is necessary.
Companies who exhibited potential to go from good to great made it a priority to hire people with the right mindset, matching traits that align with the company's hedgehog concept. These companies believe that a person's commitment and belief to the vision is more important than professional skills. Skills can be learned, but it's difficult to find someone willing to go the distance with you when the going gets tough.
Good-to-great companies know how to confront brutal realities as it knows it is essential to its success and survival.
To be realistic yet at the same time keep the faith is hard. But it's one of the traits that separates good companies from the greats.
In order to cultivate a culture of brutal honesty, leaders should not shy away from confrontations and remind its members that they should not hesitate nor feel scared to voice out there opinions.
In order to realize and act upon the company's hedgehog concept, its people must be disciplined enough to stay on course and commit themselves fully in the process.
A company's hedgehog concept might be simple, but it will require tremendous amount of discipline and effort to execute. It's critical that the people are on the same page and follow the same beliefs. Only when their vision is unified and discipline present will they be able to achieve their ultimate goals.
My Personal Takeaways
Finding your hedgehog concept is the first step.
Hiring the right people who will fully commit to this concept and have the discipline to adhere to whatever it takes is the next step.
Cultivating a culture of honesty and not shying away from difficult realities and confrontation while still remaining faithful to the mission is important.
My Favorite Quotes from Good to Great
“Will you settle for being a good leader, or will you grow to become a great leader?”
“A culture of discipline is not a principle of business, it is a principle of greatness.”
“Consider the idea that charisma can be as much a liability as an asset. Your strength of personality can sow the seeds of problems.”
“Core values are essential for enduring greatness, but it doesn’t seem to matter what those core values are.”
“Bad decisions made with good intentions, are still bad decisions.”
“Expending energy trying to motivate people is largely a waste of time… if you have the right people on the bus, they will be self-motivated.”
“For, in the end, it is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work.”
“Good is the enemy of great.”
“Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice and discipline.”
“It is not the content of a company’s values that correlates with performance, but the strength of conviction with which it holds those values, whatever they might be.”
“The best students are those who never quite believe their professors.”
“Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious–but their ambition is first and foremost for the institution, not themselves.”
“Smart people instinctively understand the dangers of entrusting our future to self-serving leaders who use our institutions, whether in the corporate or social sectors, to advance their own interests.”
“The good-to-great companies made a habit of putting their best people on their best opportunities, not their biggest problems.”
“The moment you feel the need to tightly manage someone, you’ve made a hiring mistake. The best people don’t need to be managed. Guided, taught, led–yes. But not tightly managed.”
“The purpose of bureaucracy is to compensate for incompetence and lack of discipline–a problem that largely goes away if you have the right people in the first place.”
“We found that for leaders to make something great, their ambition has to be for the greatness of the work and the company, rather than for themselves.”
“You can be passionate all you want, but if you can’t be the best at it or it doesn’t make economic sense, then you might have a lot of fun, but you won’t produce great results.”
“Your status and authority in Nucor come from your leadership capabilities, not your position.”
“Take advantage of difficult economic times to hire great people, even if you don’t have a specific job in mind.”
“A magazine is simply a device to induce people to read advertising.”
“Create the idea, You Are Never Alone.”
“Every responsibility you get make it a pocket of greatness.”
“It is not position. It is not rank. It is not power.”
“It is very difficult to have a meaning life without meaningful work.”
“Leadership is not personality.”
“Most great leaders do not start as great leaders. They grow into great leaders. Will you do whatever it takes to scale your leadership as the demands of your enterprise grows?”
“True leadership is only when people follow when they would have the option not to follow.”
“When you are suffering at the end of the race, you are not running for you.”
About the Author Jim Collins
Jim Collins is an author, consultant, lecturer, rock climber, and contributor for some of the most popular magazines (Fortune, Businessweek, etc.,). His prior book, "Built to Last", has sold several million copies worldwide.
Books similar with The Magic of Thinking Big
- The One Thing
- Built to Last
- Start with Why
- Zero to One