“Good to Great” explores the factors that allow some companies to make the transition from being good companies to truly great companies that outperform their peers over the long term.
Level 5 Leadership
The most successful companies were led by Level 5 leaders, who are humble yet determined and focus on the success of the company rather than their own ego. Level 5 leaders are characterized by their ability to build great teams and organizations that can endure beyond their own tenure.
Culture of Discipline
Successful companies have a culture of discipline, where people take disciplined action within the framework of an overarching strategy. This means everyone is aligned to the same goals and there are clear guidelines for how work is done.
Technology Accelerators
The most successful companies use technology as an accelerator of growth and productivity, rather than a driver of it. Technology should be used to enhance the company’s strategy and execution, not to create it.
Mediocrity results first and foremost from management failure, not technological failure.
Confront the Brutal Facts
The most successful companies are brutally honest about their strengths and weaknesses, and they use this information to make strategic decisions. They face the facts, even if those facts are uncomfortable or contradict their current beliefs.
Clock Building, Not Time Telling
The most successful leaders build enduring organizations, rather than focusing on their personal charisma or expertise. This means creating systems, processes, and a culture that will last beyond their own tenure.
The Hedgehog Concept
Great companies have a clear and focused strategy that is based on their strengths and passions. This is known as the “Hedgehog Concept,” which involves finding the intersection between what you are passionate about, what you can be the best in the world at, and what drives your economic engine.
Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.
The Stockdale Paradox
Successful companies have leaders who are both realistic and optimistic, like Admiral Jim Stockdale, who survived years of torture as a prisoner of war in Vietnam. The Stockdale Paradox involves facing the brutal facts of the situation while maintaining faith that you will ultimately prevail.
First Who, Then What
Successful companies focus on getting the right people on the bus and in the right seats before deciding on a strategy. This means hiring and promoting people with the right values, attitudes, and skills to help the company succeed.
The Flywheel
Great companies build momentum and keep it going over the long term, like a flywheel. This requires sustained effort, consistency, and constant reinforcement of the company’s core values and strategy.
The Doom Loop
Companies that fail to make the transition from good to great often fall into the Doom Loop, where they make hasty decisions, abandon their core values, and become reactive rather than proactive. The Doom Loop can be avoided by focusing on the company’s core values and staying disciplined.
