Business musings

Articles and thoughts about all things innovative and strategic

01
Sep
Posted by Matt Stocker , stored in: Performance Improvement  

I have just finished Good to Great by Jim Collins and I wanted to record my reflections about the book. However, I am in somewhat of a dilemma. On the one hand, I really enjoyed the book and felt that many of the concepts Jim talks about are values and ideas that I recognise as important in building a great business. On the other, I have read a number of critical reviews of the book (such as that by Rob May) pulling apart both the fundamental research foundations of the book and also its findings.

On balance

Overall, I think that Good to Great provides a very useful model and framework for developing and creating a great business. Concepts such as the flywheel go some way to challenging the ‘magic bullet’ fascination within the business world. Similarly, a Level 5 leader in place of ‘Fred the Shred’ might have created a very different outcome for Royal Bank of Scotland in the last year.

Solving the impossible

At the same time, trying to unravel the complexity of the business world to create a model that enables a business to become great is a tall order! Businesses operate in too complex an environment for a ‘key to business success’ to exist. Any business book that claims to have discovered the ‘secret to success’ is deceiving itself. Although I don’t feel that Jim Collins does claim the key to success in Good to Great, the book is taking on a huge task in assessing what creates ‘greatness’ and I suppose it is not surprising if it falls a little short of the answers.

Everlasting greatness

Obviously, there are other criticisms leveled against the book regarding the companies that were chosen and their subsequent fall from grace – Fannie Mae, being the most recent. However, the book never claims that the companies chosen will continue to be great beyond the 15 years of great performance shown. Indeed, 4 of the 11 great companies used in the study were facing serious challenges to their greatness or had already lost it by the time the book was published. It is also worth noting that Jim has recently published a new book (although I haven’t yet had chance to read it), entitled ‘How the mighty fall: And why some companies never give in‘, which I imagine begins to examine some of the questions raised by the fall of great companies.

Correlation versus Causality

I think one of the key problems with many studies and books is that of causality and correlation. Causality and correlation are similar and yet entirely different. Causality is where one or more factors cause an effect; correlation is where a relationship of some kind exists between two factors but one is not necessarily the cause of the other. Yet, so often when correlation is discovered, people assume they have discovered causality. Good to Great discovers correlation, but cannot prove causality: there are too many other uncontrollable and unexaminable factors to pin down exactly what causes greatness.

Should you read it?

If you are looking for factors (or levers) within a business that can be proven beyond doubt to create success then you might as well stop reading business books!

If however, you are looking for interesting ideas that help develop you and your business, not as a magic formula but rather as concepts to play against and spark off, then Jim Collins’ Good to Great does just that. It may not hold the secrets to success but it will certainly provide you with food for thought!

2 Responses to “‘Good to Great’ book review”

  1. nugget said on December 10th, 2015 at 9:46 am,

    Great post, Matt! I really agree with you: Jim Collins ‘ book doesn’t bring any magic formula but brings valuable tips for developing our businesses. We’ve just pulled some nuggets from this book – some visual quotes http://www.getnugget.co/good-to-great-jim-collins/. A generous part of this interesting ideas are here. Hope you like them!

Leave a Reply