Book Review: Good to Great by James C. Collins

Good to Great

If you want to know how some ordinary companies transformed themselves to great (and big) then this is the book for you.

There are seven main ideas in the book, but not all of them were of interest to me. The four that were:

  1. Level 5 Leadership
  2. First Who, Then What
  3. The Stockdale Paradox
  4. Hedgehog Concept

Level 5 Leadership #

CEO has to be humble but care deeply about the company. He has to find great people and trust them to do a great job. Charismatic CEO can't help the company, at least, in the long run. He may even leave it more fragile because he will take all the spotlight, fire managers that are too ambitious and is likely to rule with the iron fist. This will work for a short time but when he leaves there is no one to give orders and the company collapses. On the other hand, humble CEO uses best managers he can find, and tries to be as much dispensable as possible.

First Who, Then What #

While hiring you can't make compromises. Every person you hire has to be great for the position. You can't sacrifice the quality of people for any reason, but his is not to say that you can't hire juniors or people without much experience, but you have to be sure if that person would fit into the organization. In case someone is not performing best organizations give that person several chances at different positions before they gave up on him. With great people on the board, they use the ideas of all employees to drive the company forward.

This point reminded me of classic quote:

The CFO asked: What if we invest in our people and they leave?
To which the CEO responded: What if we don’t and they stay?

Possible sources

The Stockdale Paradox #

This chapter was interesting partly because of Mr. Stockdale history and the way you can use his mindset for your private life. Confront the brutal truth but never give up hope.

Hedgehog Concept #

  1. What you are passionate about ("passion")?
  2. What could you be best in the world at ("best at")?
  3. What makes you money ("driving resource")?

The idea is very simple. If you can find something that answers all those questions this is the thing you should be doing. For me, it's probably programming. On the other hand, you should stop doing anything else. In my case, it might be blogging and reading business books... On the other hand, I know people that excel in many different disciplines and use knowledge from different domains to do great projects. There are also skills that help you with the main one. Writing and communication skills can help you even if you are a programmer. Basic knowledge about design and UX will help you write better prototypes and predict the requirements.

Update: Interesting article about exact same problem appeared on Scott H. Young blog

Unexpected #

Surprisingly, I found it interesting to read about the history of big companies you can hear about every day. I have even learned how The Great Atlantic & Pacific Tea Company come out of business. This one was just something I remember learning about in school and at that time wondering how it transitioned to our century.

Overall I can recommend it to managers and leaders as I think they are going to learn most from the book. It is valuable also for the rest of us. Especially "The Stockdale Paradox" and "Hedgehog Concept" can be applied to the single person and single career.

Rating: 6/10

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