What is Good to Great? A Complete Overview
Good to Great: Why Some Companies Make the Leap and Others Don’t is a groundbreaking business book published in 2001 by Jim Collins. This research-driven masterpiece examines why certain companies transition from good performance to great results, while others remain mediocre despite similar starting conditions.
The book has sold over 4 million copies worldwide and remains one of the most influential business books of the 21st century, consistently ranking among top business book recommendations on platforms like Amazon, Goodreads, and professional development lists.
About Jim Collins: The Author Behind Good to Great
Jim Collins is a renowned business consultant, author, and lecturer who has dedicated his career to understanding what makes great companies tick. Before writing Good to Great, Collins authored Built to Last (1994) with Jerry Porras, which explored visionary companies built to endure.
Collins holds degrees from Stanford University, including an MBA and extensive teaching experience at the Stanford Graduate School of Business. His research methodology combines rigorous data analysis with practical business insights, making his work essential reading for executives, entrepreneurs, and business students.
Jim Collins’ Research Methodology
The Good to Great study took five years to complete and involved a team of researchers analyzing 1,435 companies. Collins and his team identified 11 companies that made the leap from good to great, sustaining superior performance for at least 15 years. This evidence-based approach sets Good to Great apart from opinion-based business books.
Good to Great Summary: The Core Framework
The Hedgehog Concept
One of the most powerful ideas in Good to Great is the Hedgehog Concept, which requires companies to find the intersection of three critical circles:
- What you can be the best in the world at (not just what you want to be best at)
- What drives your economic engine (understanding your profit per X metric)
- What you are deeply passionate about (what ignites your enthusiasm)
Great companies operate within this intersection, while good companies scatter their efforts across multiple directions without achieving true excellence.
Level 5 Leadership
Collins discovered that all good-to-great companies had Level 5 Leaders at the helm during critical transition periods. These leaders combine personal humility with professional will, a paradoxical blend rarely found in celebrity CEOs.
Level 5 Leaders demonstrate these characteristics:
- Channel ambition into company success, not personal glory
- Set up successors for even greater success
- Display compelling modesty and deflect credit to others
- Demonstrate unwavering resolve in difficult decisions
- Attribute success to factors other than themselves
First Who, Then What
Good-to-great companies focus on getting the right people on the bus before deciding where to drive it. This “First Who, Then What” principle means:
- Hiring the right people before determining strategy
- Removing wrong people from key positions (getting them off the bus)
- Positioning right people in the right seats
- Building teams that can adapt to changing circumstances
When you have the right people, motivation becomes less critical because they’re self-motivated to produce excellent results.
Confront the Brutal Facts (Yet Never Lose Faith)
The Stockdale Paradox, named after Admiral James Stockdale, describes the delicate balance of confronting harsh realities while maintaining unwavering faith in ultimate success. Good-to-great companies:
- Create a climate where truth is heard
- Lead with questions, not answers
- Conduct autopsies without blame
- Build red flag mechanisms to turn information into actionable insights
Culture of Discipline
Great companies combine a culture of discipline with an ethic of entrepreneurship. This doesn’t mean tyrannical hierarchies but rather:
- Disciplined people who don’t need to be managed
- Disciplined thought that follows rigorous frameworks
- Disciplined action aligned with the Hedgehog Concept
- Freedom within a framework of responsibility
The culture of discipline eliminates the need for excessive hierarchy, bureaucracy, and controls.
Technology Accelerators
Good-to-great companies think differently about technology. Rather than using technology as a primary driver of transformation, they use it as an accelerator of momentum. Key insights include:
- Technology alone never creates transformation
- Great companies pioneer technology applications linked to their Hedgehog Concept
- Avoid technology fads that don’t fit your framework
- Use technology to accelerate, not create, momentum
The Flywheel Effect
Transformation doesn’t happen overnight. The Flywheel Effect describes how good-to-great transformations build momentum gradually through consistent effort:
- No single defining action creates breakthrough
- Success comes from cumulative effort in a consistent direction
- Momentum builds gradually, then breaks through
- Media notices only after the flywheel is spinning fast
- Sustainable results come from patient persistence
This contrasts sharply with the “Doom Loop” where companies lurch from one direction to another, never building sustained momentum.
Good to Great Companies: The 11 Success Stories
Collins identified these companies as good-to-great exemplars:
- Abbott Laboratories – Pharmaceutical and healthcare
- Circuit City – Consumer electronics retail
- Fannie Mae – Mortgage finance
- Gillette – Consumer products
- Kimberly-Clark – Consumer products
- Kroger – Grocery retail
- Nucor – Steel manufacturing
- Philip Morris – Tobacco and food
- Pitney Bowes – Office equipment
- Walgreens – Pharmacy retail
- Wells Fargo – Banking
Important Note About the Companies
Some good-to-great companies later encountered significant challenges (notably Circuit City and Fannie Mae). This doesn’t invalidate the research but demonstrates that sustained greatness requires continuous application of these principles. External economic factors and leadership changes can impact even the best companies.
Key Quotes from Good to Great
On Level 5 Leadership:
“Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It’s not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious—but their ambition is first and foremost for the institution, not themselves.”
On Getting the Right People:
“Great vision without great people is irrelevant.”
On the Hedgehog Concept:
“The fox knows many things, but the hedgehog knows one big thing.”
On Confronting Reality:
“You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
On Disciplined Action:
“Most people lead busy but undisciplined lives. They have more to do than they possibly can, and they make little time for disciplined thought and reflection.”
On the Flywheel:
“There was no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembled relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough, and beyond.”
How to Apply Good to Great Principles in Your Organization
Step 1: Assess Your Leadership
Evaluate whether your organization has Level 5 Leadership or needs development in this area. Consider leadership development programs that emphasize humility alongside results-driven determination.
Step 2: Audit Your Team
Honestly assess who’s on your bus and whether they’re in the right seats. Make tough decisions about fit before moving forward with strategic planning.
Step 3: Develop Your Hedgehog Concept
Facilitate strategic sessions to identify the intersection of passion, best-in-world capability, and economic drivers. This process typically takes months, not hours.
Step 4: Create Mechanisms for Truth
Establish forums, processes, and cultural norms where brutal facts can be discussed openly without blame or defensiveness.
Step 5: Build Disciplined Systems
Develop frameworks that give people freedom within clear boundaries. Replace bureaucracy with cultural discipline.
Step 6: Identify Technology Accelerators
Evaluate technology investments through the lens of your Hedgehog Concept rather than industry trends or competitive pressure.
Step 7: Push Your Flywheel
Commit to consistent effort in your chosen direction, understanding that breakthrough takes time and sustained momentum.
Good to Great vs Built to Last: Understanding the Difference
While both books are written by Jim Collins, they address different questions:
Good to Great focuses on how companies transition from good performance to great results. It’s about transformation and the specific factors that enable the leap.
Built to Last examines companies that have sustained greatness over decades or centuries, exploring timeless principles of visionary companies.
Read Good to Great first if you’re interested in transformation. Read Built to Last if you’re focused on enduring organizational principles.
Criticisms and Limitations of Good to Great
Survivorship Bias
Critics note that selecting companies based on stock performance creates survivorship bias. The methodology examines successful companies backward rather than predicting success forward.
Company Performance After Publication
Several good-to-great companies experienced significant challenges or failures after the book’s publication, raising questions about sustainability.
Correlation vs Causation
Some researchers question whether the identified factors caused greatness or simply correlated with it during specific time periods.
Applicability Beyond Public Companies
The research focused on publicly traded companies with extensive performance data. Application to startups, nonprofits, or private companies requires thoughtful adaptation.
Despite these criticisms, the frameworks remain valuable for organizational thinking and strategic planning.
Good to Great for Nonprofits and Social Sectors
Collins later wrote “Good to Great and the Social Sectors,” a monograph extending these principles to nonprofits, government agencies, and social enterprises. Key adaptations include:
- Redefining “greatness” beyond financial metrics
- Adjusting the economic engine to resource engine
- Considering legislative/executive leadership models
- Adapting First Who principles to mission-driven organizations
Why Good to Great Remains Relevant in 2024
More than two decades after publication, Good to Great continues influencing business thinking because:
- Timeless principles – Human nature and organizational dynamics haven’t fundamentally changed
- Evidence-based approach – The rigorous methodology provides credibility
- Practical frameworks – The Hedgehog Concept and other tools remain actionable
- Leadership insights – Level 5 Leadership addresses perennial leadership challenges
- Adaptability – Principles apply across industries and sectors
In today’s rapidly changing business environment, the emphasis on disciplined thought, disciplined people, and disciplined action provides an antidote to reactive, trend-chasing business culture.
Where to Buy Good to Great
Good to Great is available through:
- Amazon (hardcover, paperback, Kindle, and Audible audiobook)
- Barnes & Noble (online and in-store)
- Books-A-Million
- Independent bookstores via Bookshop.org
- Digital platforms (Apple Books, Google Play Books)
- Libraries (physical and digital lending through OverDrive)
The audiobook, narrated by the author, is particularly popular for busy professionals and available on Audible.
Frequently Asked Questions About Good to Great
How long does it take to read Good to Great?
The book contains approximately 300 pages and takes the average reader 5-6 hours to complete. Many business leaders recommend reading it slowly with reflection time.
Is Good to Great still relevant?
Yes, the core principles remain applicable, though readers should supplement with contemporary examples and research. The frameworks for disciplined strategy and leadership are timeless.
What companies are in Good to Great?
The 11 good-to-great companies are Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo.
What is Level 5 Leadership?
Level 5 Leadership combines personal humility with professional will. These leaders are ambitious for company success rather than personal glory.
What is the Hedgehog Concept?
The Hedgehog Concept is the intersection of what you’re passionate about, what you can be best at, and what drives your economic engine.
Conclusion: Your Path from Good to Great
Good to Great provides a research-backed roadmap for organizational transformation. Whether you’re leading a Fortune 500 company, a startup, a nonprofit, or a team within a larger organization, these principles offer guidance for sustainable excellence.
The journey from good to great isn’t quick or easy. It requires Level 5 Leadership, getting the right people in place, confronting brutal facts, developing a clear Hedgehog Concept, building cultures of discipline, using technology wisely, and pushing your flywheel with patient persistence.
Start today by honestly assessing where your organization stands and which principle to tackle first. Remember: greatness is a choice, and that choice begins with disciplined thought, disciplined people, and disciplined action.
Related Reading:
- Built to Last by Jim Collins and Jerry Porras
- Great by Choice by Jim Collins and Morten Hansen
- How the Mighty Fall by Jim Collins
- Turning the Flywheel by Jim Collins
- The Effective Executive by Peter Drucker
- In Search of Excellence by Tom Peters
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