Monday, February 8, 2010

Good to great

is the title of a book by Jim Collins:

It's based on Collins' team review of 11 companies that fit the criteria of performing at stock market average for 15 years, then performing at least 3 times above stock market average for 15 years.  Collins and his team compared these companies (Phillip Morris, Kimberley Clark, Walgrees, Wells-Fargo etc) with matched companies in the same area that continued to perform near the stock market average.   Their interest was to find the things that characterized the 'great' companies compared to the 'good' (or rather average) companies.

There's a summary here:

The most striking finding was that the company leaders were of a very characteristic, and in some ways surprising type - summarized in the page above as showing 'great humility' and 'professional will'.  I take the last to mean, that the CEOs had an urgent personal investment in the company doing a good job, whatever that job was. 

Another summary point was to emphasize the importance that the incoming (later successful) CEOs gave to hiring the right people, and the atmosphere that they created - one of robust open discussion.  The teams seemed to allow for strong disagreement, full airing of all points of view, followed by consensus and disciplined action.

Other distinctive features of the successful companies were: brutal honesty and a strong desire for objective information; and patience.   The last is what Collins calls 'the flywheel concept' - that is, slow, patient and disciplined improvement of process.

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