Comments on: Why "Good to Great" Isn’t Very Good

By: Jonathan Wolfman

Jonathan Wolfman — Wed, 07 Oct 2009 06:55:58 +0000

I’m writing a paper on Good to Great for a graduate-level course, and some of the commenters here might be interested in taking a look. My review is in progress and posted online so that I can add discussion input as I write.

http://sites.google.com/site/jonathanwolfmansite/summaries/good-to-great-review

Overall, I agree with Rob’s logic-oriented arguments, but I think the findings of the book are much more specific and applicable than he lets on. For example, the study shows correlation but not causation. Also, Collins never presents any data that prove the findings are applicable to organizations that aren’t large companies competing between the years of 1970-2000. Nevertheless, the definition of a Level 5 leader includes six points in the Chapter 2 summary along with many illustrating examples, so it is much more specific than “humility,” as Rob claims.

Please reply on my website, which is for educational purposes and has no commercial interest.

By: Nick

Nick — Mon, 05 Oct 2009 21:43:55 +0000

The review misses an important point- this book was written in an emergent style based on available data and interviews. And out of that process, these principles emerged as statistically significant. Not exclusive, but significant. It’s a walk through organizational behavior using incredibly cool techniques to highlight the impact of certain principles.

To look at the principles but not the process that they are derived through misses the magic of the book. And the method is elegant.

The point about disproving these points and including that in the study method is worthless and misses the point of the research methodology. It is a highlighting of the significance of these facts across many companies by using a research methodology that tries to remove the researcher. The fact that many of the point are counter-intuitive to business thought of the 70s and 80s is refreshing. I’m sure you can find exceptions to all of these- that’s the nature of complex organizational behavior. And other factors certainly could wipe out these companies in the future.

BTW- the point about Microsoft confuses this book with ‘Built to Last’. This book is about companies turning themselves around. Also, Microsoft’s industry leadership is questionable. Who cares if they use Windows, OS/2 or OS X. Talk about survivor bias.

1. Companies that went from good to great promoted to CEO from within thoughtful leaders that are contrary to the charasmatic CEO rockstars.
2. Companies that went from good to great massacred their management layer, and planned strategy in an organic, collaborative manner.
3. Companies that went from good to great broke free from the status quo.
4. Companies that went from good to great had organizational alignment and a great operating model focus (see Discipline of Market Leaders, Crossing the Chasm, marketing strategy books by Al Ries, and other books that talk about the importance of alignment and focus)
5. This is more about culture then discipline. It’s interesting.
6. There is an interesting story here about early adoption based on clear business models. Marketing theory about early adopters (e.g. Crossing the Chasm) selecting barely functional new products talks a great deal about other principles mentioned here.
7. Incremental improvement over time. The principle of alignment. Evolution of capability . Adaptation of complex systems. All interesting concepts buried in here.

Anyway- I’m a big fan.

By: Parth

Parth — Tue, 21 Jul 2009 20:54:22 +0000

I would not agree to this point above – The Corporate Barnum Effect

I have been reading this book and what I got before reading this post was – rather than working on strategy and then finding right people that fit in that strategy it is important to find good people first and then driving the bus. I was surprised at picking up few sentences and going after that. You have to consider whole picture for getting idea behind those lines

By: Reese

Reese — Thu, 16 Jul 2009 03:57:37 +0000

I liked this review. It give a different perspective and makes you think.

By: Alex Murphy

Alex Murphy — Fri, 19 Jun 2009 11:13:08 +0000

To me, reading business books is somewhat similar to the act of going to church … you know the core principles but you need to listen and internalize the subtle nuances so that you truly stay on the right path.

Collins’ book addresses two of these subtleties in a way that I think is unique and is something for every person to apply to their business.

The point of deciding what “can” you be the best in the world at is a different way to look at your mission. He discusses the need to look at the market, and your talent, and passion, and understand that all of these factors have to work together. In many respects this is somewhat obvious, but I haven’t seen it put that way.

First who they what is something that every business “knows” but so few actually practice. Almost every single business works their staff as hard as possible until they are on the verge of quiting and then they hire some additional “help” to address the looming to do list that needs to be addressed yesterday. This is the process of first what then who. This leads organizations to make bad hires which is bad for both employer and employee. Google has not been around for dozens of years, but look at their hiring practices and their methodologies. They have set up campuses next to the three leading tech related universities in the US for the purpose of attracting talent first and then determining what to do with the talent.

There are holes in the research, but the general concepts will help most business people who are in the position of trying to “transform” their businesses.

By: Marie

Marie — Thu, 30 Apr 2009 04:01:26 +0000

Interesting read of comments. I have owned a growing business for almost 30 years — and get motivated by ideas – and G2G did exactly that! We started applying the principles of G2G a few years ago and have soared at a time when most in our industry are hurting… was it the book alone? No… but the principles have value… if you and your team are passionate about what you do, if you do have the “right” people on the bus, if you focus on what you are “best” at… then things will change! As an entrepreneur, I am a sponge and thrive on ideas and philosophies that will excite… from books, lectures, discussions… learning as we go! It is interesting to read some of these comments as I never read trying to find fault, I read to learn and grow… and am grateful for being so very blessed!

By: J. MacAuslan

J. MacAuslan — Thu, 30 Apr 2009 01:54:50 +0000

To test Buffett’s reputation for survivorship bias [which I, too, have often wondered about]:
Among publicly traded US companies, what fraction of CEOs performed better in, say, the increase in book value of their companies during 1965 [when he took over BH] to 1974? How many during each of the subsequent 3 decades? (Suppose the average of those 4 numbers is 2% — I don’t really know, but it’s not rocket science to look up the numbers.) That gives you an estimate of general rarity, and it lets you state a concrete hypothesis to test:
Picking companies, or CEOs, at random each decade, you would get 4 such performances once in 6 million tries. (.02*.02*.02*.02) The question is, were there about 6 million people who led that collection of companies over that length of time? (Then one of them would certainly have been at least in Buffett’s league!) Or even 100,000?
If 2% (or less) is the right number, then the answer is almost certainly, “No, Buffett really is special.”
But if it’s 10%, then it’s a 1-in-10,000 chance, and there have probably been almost that number of CEOs, so the answer is probably, “No, he’s just an especially good example of a survivor: a good enough CEO, and young enough, and healthy enough, to stay in the game for a very long time.”
My guess (and it is only that!) is that 2% is closer to the mark. But the question is an empirical one, and it has an empirical (albeit statistical) answer.
FWIW, you could instead ask how likely it is that any randomly chosen S&P500 company would beat the S&P500 average, 34 times over those 40 years (or 38 over the last 44 years). The answer is 1 in a few million. But it’s not so clear whether BH should be considered in that way, especially in the early years (I vaguely recall a market value of $20M, which might let it outperform just for reasons of size, rather than CEO quality).

By: Estelle DESTRIBOIS

Estelle DESTRIBOIS — Wed, 29 Apr 2009 16:14:42 +0000

Dear Rob,
I was very happy reading your note about the “godd to great” book. In fact, there are very interesting points about which I never though about such as “A Lack of Disconfirming Research” or “The Corporate Barnum Effect”. There is a point we have in common: “The Tom Peters Criticism”. This is exactly what I was saying to my collegues: “he based all his study on he fact that the great companies, but if the stock exchange would be the universal way to define a great company, it will not fluctuate so much !”.
There is a point that he very important I think and that was not in your article: Jim Collins declare that things are like that and that it is proven, but how can you prove something with a sample of 11 companies???? How can you generalize and make rules for all the companies in the world with a sample of 11 companies???? Not very scientific ;o)

As you, I don’t say that Jim Collins is right or not, I just say that he can not affirm such things based on a so fragile basis…

Thanks for this very interesting article once again,
Estelle

By: gpaskill

gpaskill — Tue, 17 Mar 2009 19:42:38 +0000

That’s a really interesting insight about “hiring good people.” Just what are good people?

Hiring today is in really dismal shape. There’s this erroneous belief that if you were a “good person” (whatever that is) in one company, you’ll be good in all others. Consequently, if you didn’t succeed in your past companies, then you will consistently fail in all companies afterwards.

When you look at some of these proven performers with big company names in their background, some actually have the benefit of being at the right place at the right time. Those who hire them for subsequent jobs believe, well if you created a browser and revolutionized the world at age 25, everything you touch will turn to gold.

The part that is sorely lacking in track “hiring good people” is this. If you as a hiring manager, HR representative or peer manager deemed that somebody wasn’t good, were you right? Did you look to see where that reject candidate landed, and did that person go ahead and destroy your competitor because they were bad? No, hiring managers the world over can cry that talented people are so hard to find and nobody challenges them on it. Have employers cry that enough, and the world believes it, unless you stop to think that not all the laid off people of 2009 are losers (even if they worked for Bear Stearns and Lehman Brothers.)

The real problem in hiring is this. Hiring focuses way too much on what you have done. Hiring now more than ever needs to focus on what you can do. People who were good in one company can fail. People who were bad in another can succeed in another. Some “good people” are indeed really good, they just never had the bosses and environments to demonstrate they were good.

P.S. If you want to hire good people, resumes are useless!

By: Henry

Henry — Mon, 09 Mar 2009 16:10:47 +0000

Jane

Education is about getting results, just as business is about getting results. The principles of humble, determined leadership; having the right people on the team; etc. can all be applied to any organisation: not just business.