There are a number of books which are considered to be essential reading for anyone running a business. Most of these are fairly dull and I’ve read some but not all of these because I normally prefer to read real life stories about people succeeding, or otherwise, in business. I have to admit that I often lie about the books I’ve read: Art of War… oh yeah I’ve read it (nope!), Ulysses (I did buy it, does that count?). Thankfully I’ve put at least one of these wrongs right recently and have read Good to Great, the seminal work by Jim Collins.
All I can say about this book is that if you haven’t read it, stop what you are doing (including reading this rubbish) and go and buy it. It is quite simply the best business book I’ve ever read. To try to summarise this book is a bit of a con but I will share with you the things I liked the most about this book… first some background:
Collins and his research team looked at 1,500 companies in the US and analysed their performance. They sorted these companies into the 11 companies who consistently outperformed their competitors and the market, not just for a few years but over a long period of time. Companies like Gillette and Circuit City made the ‘Great’ list. Companies like Coca-cola and Smith Kline Beecham didn’t. Collins and his team then looked at the things that these companies have in common and explain in the book why they think these matter. There are salutary and useful lessons on more or less every page.
The key findings across all of the great companies that are captured in the book are:
- Great companies have leaders who are humble, but driven to do what’s best for the company. Collins calls these level 5 leaders;
- The key is to decide first who, then what: get the right people on the bus, then figure out where the bus might be going;
- Confront the brutal truth of the situation, yet at the same time, never give up hope;
- Be a hedgehog, not a fox: The book talks about three overlapping circles: What makes you money? What could you be best in the world at? and what lights your fire? The great companies focus on what’s inside the circles and nothing else.
- They have a culture of discipline and stick religiously to what they are good at:
- They use technology to accelerate growth, not as an accelerator in itself and only within the three circles of the hedgehog concept.
- They make small, iterative changes that all build on each other like compound interest. Collins calls this the flywheel effect.
Some of the things that really stood out for me in the book where:
No-one who worked at the companies really knew what had happened or specifically when something changed. It just sort of ‘happened’;
There were no high profile, celebrity leaders at the great companies, nor where they any massive change programmes or restructures that take the focus off the prize;
The importance of momentum;
The importance of discipline, not getting distracted, sticking to what you know and executing the plan, even if the plan isn’t altogether sexy;
The importance of culture;
The fact that it’s still relevant. The book is quite old now and the obvious question is where the Google’s and Amazons of today’s world will rank but nevertheless, the fundamentals still make sense, even in a Facebook world.