“Good to Great” is a best-selling book written by business guru Jim Collins. He summarizes research compiled by his team of twenty people who spent five years studying 11 companies that achieved exceptional results over a fifteen-year period. These companies achieved exceptional growth rates and stock market performance. The research attempts to summarize how these 11 companies went from “good to great.” What they found were seven common characteristics:
Leadership: The best performing companies are led by humble but motivated leaders. Despite their low profile style, they are tenacious about the performance of their organizations. Collins refers to this style as a “level 5” leadership style and, unlike traditional charismatic leaders, level 5 leaders are reserved but tenacious at the same time.
The right people: Collins describes adding the right people with the right skills to the team as “First who, then what.” Alternatively, he says, “Get the right people on the bus, then find out where to go.” Therefore, the first priority of the leaders of successful companies is to ensure that they have the right people in key positions.
Facing reality: Leaders of successful companies also “confront the brutal facts” of their situation. They are honest about what works and what doesn’t; Plus, they don’t sugarcoat your situation or operating environment. Even when the news is bad, they face reality because they know that this is the only way they can ultimately make realistic plans to move forward.
Hedgehog concept: The hedgehog concept is a simple but fundamental concept for these successful companies. Like the animal from which the concept is named, these leaders bow their heads and move forward with intense effort. Their companies focus on a few simple goals: how they make money; What are the best in the world; and what motivates them to be successful.
Discipline: The leaders of these companies instill a high level of discipline in their organizational culture. Discipline helps focus effort and take advantage of resources.
Technology: These companies use technology to help accelerate their growth. Technology is a way of harnessing resources to achieve your goals. In military parlance, the technology would be called a “force multiplier.”
The steering wheel: The flyer refers to the concept of “success begets success.” As these organizations become more successful, their growth begins to increase like the momentum of a flyer.
As with all similar studies of high-performing organizations, some of the target companies stumble and fall over time. It is difficult to maintain exceptional performance for a long period of time. The original study was completed in 2001, and since then some of these companies have struggled, including Circuit City and Fannie Mae. Yet these seven principles are still important characteristics found in many successful organizations, and leaders looking to grow their businesses should consider them as they develop their own vision for the future.