Good to Great: Why Some Companies Make the Leap... and Others Don't is a 2001 management book by James C. Collins

James C. Collins

James C. "Jim" Collins, III is an American business consultant, author, and lecturer on the subject of company sustainability and growth. Jim Collins frequently contributes to Harvard Business Review, Business Week, Fortune and other magazines, journals, etc...

 that aims to describe how companies transition from being average companies to great companies and how companies can fail to make the transition. "Greatness" is defined as financial performance several multiples better than the market average over a sustained period of time. Collins finds the main factor for achieving the transition to be a narrow focusing of the company’s resources on their field of competence.

Seven Characteristics of Companies that went from Good to Great

• Level 5 Leadership: Leaders who are humble, but driven to do what's best for the company.
• First Who, Then What: Get the right people on the bus, then figure out where to go. Finding the right people and trying them out in different positions.
• Confront the Brutal Facts: The Stockdale paradox - Confront the brutal truth of the situation, yet at the same time, never give up hope.
• Hedgehog Concept: Three overlapping circles: What makes you money? What could you be best in the world at? and What lights your fire?
• Culture of Discipline: Rinsing the cottage cheese.
• Technology Accelerators: Using technology to accelerate growth, within the three circles of the hedgehog concept.
• The Flywheel: The additive effect of many small initiatives; they act on each other like compound interest.

Great companies

Collins finds eleven examples of "great companies":

• Abbott Laboratories
  Abbott Laboratories
  Abbott Laboratories is an American-based global, diversified pharmaceuticals and health care products company. It has 90,000 employees and operates in over 130 countries. The company headquarters are in Abbott Park, North Chicago, Illinois. The company was founded by Chicago physician, Dr....
  
  
• Circuit City Stores (bankrupt in 2009)
• Fannie Mae (involved in major home mortgage scandal)
• Gillette Company
• Kimberly-Clark
  Kimberly-Clark
  Kimberly-Clark Corporation is an American corporation that produces mostly paper-based consumer products. Kimberly-Clark brand name products include "Kleenex" facial tissue, "Kotex" feminine hygiene products, "Cottonelle", Scott and Andrex toilet paper, Wypall utility wipes, "KimWipes"...
  
  
• Kroger
  Kroger
  The Kroger Co. is an American supermarket chain founded by Bernard Kroger in 1883 in Cincinnati, Ohio. It reported US$ 76.7 billion in sales during fiscal year 2009. It is the country's largest grocery store chain and its second-largest grocery retailer by volume and second-place general retailer...
  
  
• Nucor
  Nucor
  Nucor Corporation , a Fortune 300 company headquartered in Charlotte, North Carolina, is one of the largest steel producers in the United States, and the largest of the "mini-mill" operators...
  
  
• Philip Morris
  Altria Group
  Altria Group, Inc. is based in Henrico County, Virginia, and is the parent company of Philip Morris USA, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., Philip Morris Capital Corporation, and Chateau Ste. Michelle Wine Estates. It is one of the world's largest tobacco corporations...
  
  
• Pitney Bowes
  Pitney Bowes
  Pitney Bowes Inc. is a Stamford, Connecticut-based manufacturer of software and hardware and a provider of services related to documents, packaging, mailing, and shipping, collectively referred to as mailstream. The company has approximately 36,000 employees worldwide. It is one of 87 existing...
  
  
• Walgreens
  Walgreens
  Walgreen Co. , doing business as Walgreens , is the largest drugstore chain in the United States of America. As of August 31st, the company operates 8,210 locations across all 50 states, the District of Columbia and Puerto Rico. Founded in Chicago, Illinois in 1901, and has since expanded...
  
  
• Wells Fargo
  Wells Fargo
  Wells Fargo & Company is an American multinational diversified financial services company with operations around the world. Wells Fargo is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home...
  
   (required $25B bailout in 2008)

Impact

Good to Great is "one of the most influential business books of recent years." It was "cited by several members of The Wall Street Journal

The Wall Street Journal

The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....

's CEO Council as the best management book they've read."

See also

• Built to Last: Successful Habits of Visionary Companies
  Built to Last: Successful Habits of Visionary Companies
  Built to Last: Successful Habits of Visionary Companies is a book written by Jim Collins and Jerry I. Porras on October 26, 1994. The book outlines the results of a six-year research project into what makes enduring great companies...
  
  
• The Halo Effect
  The Halo Effect (business book)
  The Halo Effect is a 2007 book by business academic Phil Rosenzweig that criticizes pseudoscientific tendencies in the explanation of business performance. As well as many business magazines and newspapers, it targets specific books and academic research published by business schools...
  
  
• In Search of Excellence
  In Search of Excellence
  In Search of Excellence is an international bestselling book written by Tom Peters and Robert H. Waterman, Jr.. First published in 1982, it is one of the biggest selling and most widely read business books ever, selling 3 million copies in its first four years, and being the most widely held...
  
  

Reviews

• Good to Great or just lucky?
• Why Good to Great Isn't Very Good.
• Good to Great video review.

External links

• JimCollins.com
• Wiki Chapter Summaries of Good to Great
• From Good to Great … to Below Average Article on Freakonomics New York Times blog