So, I read Good to Great by Jim Collins over the break (classic winter break activity) and as much as I enjoyed reading it, and despite the page full of notes I have on it in OneNote, I don’t think I’m going to remember it as a must-read business book. It won’t go into the Recent Reads section, and I thought that I might as well post my own notes to myself publicly:
Konana is highly skeptical about Collins' work in Built to Last. He didn't show anything that makes me second-guess my decision to not read it, and didn't say anything that indicates that I'm missing out by not reading it. In any case, Collins is a great storyteller (much like Gladwell), and that means we should be a bit more rigorous and careful when analyzing the ideas in Good to Great.
This book didn't (and probably couldn't have) covered all of the intricacies of each of the successful and failed transformations. Each of those happened in a context - the context of the company, the context of the market, the context of the industry - and that context has been left out from Good to Great.
Collins only studied companies that were in the Fortune 500 that had 15 years of average/below average performance followed by 15 years of market outperformance. This is an extremely small sample size, and there are likely to be many, many companies in the universe that had everything Collins mentioned (e.g. Level 5 leadership, a focus on getting the right people on board, a Hedgehog Concept, etc.) that eventually failed for a myriad of other reasons (perhaps the market addressed by the Hedgehog Concept fizzled out, for example). So there's no causal relationship between following Collins' advice and going from good to great. This is merely Collins noting, among the 11 good-to-great companies, what factors were present that were absent from the comparison companies. Had the criteria for selection been different, a different group of companies could have been selected, and the conclusions may have been different.
Steven Levitt (of Freakonomics fame) points out that many of the good-to-great companies are no longer great. Now, this isn't the premise of the book: the book is focused on the factors that drive a turnaround or a transformation, and not on everlasting greatness in an organization. However, it's worth noting that the good-to-great companies didn't stay great forever.
It's worth wondering if the times have changed. As innovation cycles have sped up, and as the pace of technology only accelerates, does taking years and years to discover a Hedgehog Concept make sense? After all, how are the Japanese and German automakers doing as Tesla skyrockets in the EV space? Is this book perhaps too conservative in its advice? This is a classic tradeoff between speed and accuracy - we don't want to blindly go down the wrong path, but we need to start moving at some point. So, again, it's worth debating how much these concepts still apply.
It's also worth asking to what companies Collins' concepts, if valid, would apply to. All Fortune 500 companies? Smaller ones too? Those in the high-tech space?
The concepts can be useful for thinking about things on our own (e.g. an excellent point is the fact that companies receive hardly any attention while they're doing poorly, and a bunch once they start to do well, which in turn reinforces the idea of a miracle overnight transformation, even though the steps for a transformation may have been set up ahead of time). That said, this book isn't the Bible, and shouldn't be treated as such.
Again, I enjoyed reading it. But after some skepticism, I don’t know that it’s the one to read.