Good to Great: Why Some Companies Make the Leap, and Others Don’t

To find the keys to greatness, Collins’s 21-person research team read and coded 6,000 articles, generated more than 2,000 pages of interview transcripts, and created 384 megabytes of computer data in a five-year project. The findings will surprise many readers and, quite frankly, upset others.

The Challenge
Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into an enterprise’s DNA from the very beginning.

But what about a company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness?

The Study
For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?

The Standards
Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world’s greatest companies, including Coca-Cola Intel, General Electric, and Merck.

The Comparisons
The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to leap well to great. What was different? Why did one set of companies become truly great performers while the other set remained only good?

The Findings
The Good to Great study findings will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include:
Level 5 Leaders: The research team was shocked to discover the type of leadership required to achieve greatness.

The Hedgehog Concept (Simplicity within the Three Circles): To go from good to great requires transcending the curse of competence.

A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results. Technology Accelerators: Good-to-great companies think differently about the role of technology.

The Flywheel and the Doom Loop: Those who launch radical change programs and wrenching restructurings will almost certainly fail to leap.

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