Good to Great

Good to Great, published in 2001, serves as both a follow-up and thematic prequel to author Jim Collins’s 1994 best seller, Built to Last. Comprehensive in the scope of its research, Good to Great is an examination of the defining qualities of greatness in companies that have made a pivotal transition from “good” (performing relatively consistently) to “great” (performing exceptionally). In making his arguments, Collins brings his expertise as a faculty member at the Stanford University Graduate School of Business, as well as his time at the helm of his own research laboratory in Boulder, Colorado.

Plot Summary

Good to Great is the product of a five-year research project, led by Jim Collins and executed by a team of 20 people, in response to a central question: “Can a good company become a great company and, if so, how?” (3). In the opening chapter, Collins sets the foundational framework for the book, explaining that part of the impetus for writing it was a piece of constructive criticism about his previous book, Built to Last. The unanswered question in Built to Last, which focused on companies that had always been great, serves as the premise of Good to Great. As Collins concludes the first chapter, he identifies sheer curiosity as the motivation behind the tremendous research that resulted in the book, and then articulates the four phases that framed his work: “Phase 1: The Search,” “Phase 2: Compared to What?,” “Phase 3: Inside the Black Box”, and “Phase 4: Chaos to Concept.”

In Chapter 2 (“Level 5 Leadership”), Collins defines the qualities of a leader who turns a good company into a great one, naming this type of leadership “Level 5 Leadership.” Rather than relying on charisma or a big personality, a Level 5 leader “builds enduring greatness through a paradoxical blend of personal humility and professional will” (20). Without a Level 5 leader at the helm, companies seldom achieve greatness.

Chapter 3 (“First Who…Then What”) emphasizes the need to recruit and retain the right people, to remove the wrong people, and to set a mission-driven course once the right people have bought into the idea. The subsequent teams, characterized by a rigorous work ethic, debate constantly in search of consensus. Together, these teams contribute to a company’s greatness thanks to “their character traits and innate capabilities” rather than an impressive list of specific skills (64).

In Chapter 4 (“Confront the Brutal Facts (Yet Never Lose Faith)”), Collins argues that every good-to-great company must undergo a rigorous process of facing its most glaring issues. In order to acknowledge these “brutal facts,” companies must first cultivate and maintain a culture of openness where stakeholders across the organization can voice their perspective in a free and authentic manner. Adversity is common across all companies, regardless of their greatness or lack thereof, but a highly effective response to adversity requires this head-on confrontation.

Chapter 5 (“The Hedgehog Concept (Simplicity Within the Three Circles)”) draws on Collins’s research to suggest that a good-to-great is like a hedgehog—simple, seemingly unimpressive, but highly consistent. The hedgehog image serves as the basis for the three intersecting circles that combine to create greatness: what you are deeply passionate about, what drives your economic engine, and what you can be the best in the world at. According to Collins, good-to-great companies generally take four years to arrive at their Hedgehog Concept.

In Chapter 6 (“A Culture of Discipline”), Collins emphasizes the importance of a company culture where self-disciplined people are free to work within a framework shaped by high expectations and clear communication. This type of culture thrives when people at the company are self-motivated, eager to improve the company and even to suggest innovation, and not fearful that a tyrant at the helm of the company will personally discipline their wrongdoings. According to Collins, companies can only achieve this type of culture by strictly adhering to the Hedgehog Concept.

Chapter 7 (“Technology Accelerators”) focuses on using technology as a means of accelerating success, rather than creating success simply by adopting a new technology. According to Collins, applying cutting-edge technological practices is not enough to transform a company from good to great. Technology is important in a company’s constant evolution and growth, but it cannot make or break a company on its own. Furthermore, good-to-great companies strategically select new technologies that align with the core tenets of their Hedgehog Concepts, rather than simply jumping onto the bandwagon of the latest fad.

In Chapter 8 (“The Flywheel and the Doom Loop”), Collins compares how momentum builds in good-to-great companies to how it builds in others. Good-to-great companies build momentum in the same way that a flywheel does, growing over time through persistence and repetition. Comparison companies, on the other hand, often fall into what Collins calls the “doom loop”—a pattern that results from trying to skip steps along the way, ignoring the benefits of gradual momentum in an effort to achieve breakthrough as quickly as possible.

Finally, in Chapter 9 (“From Good to Great to Built to Last”), Collins contextualizes Good to Great by juxtaposing it with Built to Last. He argues that Good to Great acts more as a prequel to Built to Last, even though he conducted the research for Good to Great years after publishing Built to Last. Both books center on a question that Collins deems essential to any organization: Why do we want to be great in the first place? Collins concludes by arguing that the concepts these books lay out are relevant not only in the context of companies and organizations, but also in the context of our individual daily lives.