Good to Great, by Jim Collins

This book is a study of how companies transition from being merely good to achieving sustained greatness.

The book isn’t about quick wins or charismatic leaders; it’s a deep dive into the underlying disciplines that differentiate truly exceptional companies. Based on a rigorous five-year study, Collins and his research team identified a consistent pattern of behaviours and principles that allowed these companies to outperform their peers over a fifteen-year period. It’s a roadmap for building enduring success through systematic, incremental improvements.

Search: Good to Great

NB: Personally, I’ve enjoyed it as an audiobook.

Principles

1. Level 5 Leadership

The great companies had a specific kind of leader—a Level 5 leader. These individuals possess a paradoxical blend of fierce professional will and personal humility. They are intensely ambitious, but their ambition is channelled into the company’s success, not their own. They don’t seek the limelight and are often described as quiet, reserved, or even shy. They are driven to build a lasting legacy and are the first to give credit to others for successes and to take responsibility for failures. They are about building a great company, not personal glory.

“Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company.”

2. First Who… Then What

The good-to-great companies focused on getting the right people on the bus, the wrong people off the bus, and the right people in the right seats—before they figured out where to drive the bus. They understood that their people are not their most important asset; the right people are. They didn’t just hire for skills; they hired for character and discipline. The leaders in these companies understood that with the right team, they could adapt to any challenge. The ‘who’ decision was a prerequisite for any strategic decision.

“The best people don’t need to be managed. Guided, taught, led—yes. But not tightly managed.”

3. Confront the Brutal Facts (The Stockdale Paradox)

The great companies maintained a dual mindset: they never lost faith that they would prevail in the end, but they also had the discipline to confront the most brutal facts of their current reality, no matter how harsh. This concept is named after Admiral Jim Stockdale, a U.S. prisoner of war in Vietnam who survived by clinging to this exact principle. He understood that optimism without grounding in reality was a recipe for failure. By confronting the brutal facts, they could make clear, intelligent decisions without being blinded by wishful thinking.

“You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, AND at the same time have the discipline to confront the most brutal facts of your current reality.”

4. The Hedgehog Concept

This principle is about finding your company’s core purpose. The great companies understood that to achieve greatness, they needed to simplify their strategy down to a single, clear, and compelling concept. This concept is found at the intersection of three circles: what you can be the best in the world at, what you are deeply passionate about, and what drives your economic engine. They didn’t diversify or chase every opportunity; they honed in on their core strength and stuck to it relentlessly.

“A Hedgehog Company is one that focuses on one thing and does it better than anyone else.”

5. A Culture of Discipline

Once a company has the right people and the right vision, it needs a culture of discipline. This isn’t about micromanagement or authoritarian control; it’s about disciplined people who engage in disciplined thought and take disciplined action. The great companies built a culture where people were free to innovate within a clear framework of responsibilities. This allowed for predictability and consistency, which, in turn, created an environment where everyone knew what was expected and could be trusted to deliver. This is the opposite of bureaucracy; it's about freedom and responsibility within a system.

“The good-to-great companies built a culture of discipline—a culture of people who take disciplined action within a framework.”

6. Technology Accelerators

The great companies didn’t use technology as a primary means of initiating a transformation. Instead, they used it to accelerate momentum once the company had the right people and a clear Hedgehog Concept. They were disciplined in their approach to technology, using it only where it directly supported their core strategy. They didn’t blindly follow trends but rather asked, “Does this technology fit with our Hedgehog Concept?” They were pioneers in their deliberate application of technology, but they were never driven by it.