Good To Great – Jim Collins

The book Good to Great focuses on how both small and exceptional businesses can transcend their unchanging status quo and grow into great companies.

The Premise

Few people succeed in being great because they give up too soon for a comfortable life. The same is true for businesses. The vast majority of businesses reach a level of functional sufficiency, but instead of developing further, they simply remain at this point. They remain good but do not progress to greatness.

Leading with truth

Don’t assume you already know the best course of action; instead, lead with questions.
Discussion and debate only; no coercion.
Perform autopsies without assigning blame
Build “red flag” mechanisms: If you raise your hand with your red flag, the meeting room will stop for you.

The Hedgehog Concept

The Hedgehog Concept is a simple, crystalline concept similar to IKIGAI that stems from a profound understanding of the intersection of the three circles:

What you can be the best at (and, equally important, what you cannot be the best at).
What is the driving force behind your economic engine?
What you are extremely passionate about.

Having a core ideology

A great, long-lasting organization will have core values and a core purpose that go beyond simply using money to inform decision-making.

While adhering to the core values, make room for change and innovation as well.

Being ruthless or rigorous

Start with the right people, ask them the right questions, and engage them in spirited debate. This is the secret to greatness.

Being rigorous means always upholding exacting standards, especially in upper management. Being rigorous, but not ruthless, allows the best individuals to focus entirely on their work without having to worry about their positions.

Manage systems, not people

Good-to-great companies created a consistent system with clear constraints, but they also gave people freedom and responsibility within that system.
They hired self-disciplined people who didn’t need management and then managed the system rather than the people.

Confront the facts but don’t lose faith

A company’s recipe for mediocrity, or worse, is created the moment a leader permits himself to replace reality as the main reality that people worry about.

This is one of the main explanations for why less charismatic leaders frequently outperform their more charismatic counterparts in terms of long-term results.

Motivating people is useless

It is a waste of time and energy to try to “motivate” people. The correct people will be motivated by themselves, so the real question isn’t “How do we motivate our people?”

The key is to keep them motivated. Ignoring the harsh realities of life is one of the main ways to demotivate people.

The verdict: authenticity

You don’t need hierarchy when you have disciplined people.
You don’t need bureaucracy if you have disciplined thought.
You don’t need excessive controls when you take disciplined action.
Great performance results from the magical alchemy of a disciplined culture and an entrepreneurial ethic.

The path to great: level 5 leadership

Level 5 leaders direct their ego needs away from themselves and towards the larger goal of creating a great company. Ambition for Level 5 leaders is primarily for the institution, not for themselves.

The qualities of Level 5 leadership go beyond modesty and humility. It is also about having an almost stoic resolve to take whatever steps are necessary to make the company great.

Clock building, not time telling

Create a company that can withstand multiple product life cycles and leaders. This ensures that a company is not based on a single charismatic individual or a static, singular product idea. All seasons are welcome.