Good to Great Critique
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Summary
In 1996 Jim Collins asked the question, “Can a good company become a great company and if so, how?” (Collins, p195) Collins and a dedicated band of 22 researchers set out to discover what transforms good companies into truly great companies. Their criteria for greatness was tough: The researchers sought companies that had underperformed the general stock market for at least 15 years, then went through a transition, and subsequently outperformed the general stock market by at least three times for the next 15 years.
Starting with 1,435 companies that appeared on the Fortune 500 list from 1965 to 1995, the researchers eventually identified only 11 that made the cut. The companies that were selected were Abbott Laboratories, Circuit City, Federal Home Loan Mortgage, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo.
Although there are other factors involved for taking a company from ‘good to great’, what these great companies turned out to have in common was a particular kind of leader during the transition period, but it wasnt a headline-grabber like Chryslers Lee Iacocca or GEs Jack Welch. On the contrary, the leaders of the long-term success stories were people like Kimberly-Clarks Darwin Smith. Called Level 5 leaders, these top executives “possess a paradoxical mixture of personal humility and professional will” (Collins, p195).
In Good to Great Collins classifies leaders into five levels. A level 1 leader is a highly capable individual. He plays an important role in the success of his organization through