What makes a company great? Journalists, universities, think tanks, and CEO’s themselves have been trying to find the formula for decades. The rise of the multinational corporation has only increased the desire to find what makes a company great. With companies that are so large and have such diversified products, the variables that enter into the equation seem infinite. In the book Good to Great, Jim Collins attempts to identify what allows companies to make the leap from being a good company to being a great company.
Good to Great outlines seven fundamental characteristics that allow companies to separate themselves from the pack. Two of them deal with the type of personnel that a company obtains. The first of which is leadership. The importance of having great leaders at the top who are humble and put the company’s success in front of everything. The second is that a company’s employees are first and foremost by being put ahead of what the company actually does - “first who, then what.”
The other five characteristics deal more with how the business operates. Collins suggests that there are three overlapping circles made up of the passion exhibited, what the company can be the best at, and finally what makes the company profitable. At the intersection of this you have a dynamic company that is bound to be great. The other characteristics include instilling a culture of discipline along with confronting the brutal facts of your business and how to deal with those. Also mentioned was the importance of technology accelerators which has proven to become even more important since the publication of Good to Great. Technology accelerates growth and a company that can properly adopt and execute the necessary technologies has made a major step in becoming a great company. Finally, there is a characteristic call “The Flywheel” that states small initiatives that build upon each other are critical. It has been analogized to compound interest where they build on each other creating huge dividends quickly.
Despite the in depth and impressive account on what makes companies great, debate will continue to rage on just what the formula is that allows companies to break through the barrier. While Good to Great paints a profound picture of the make-up that exists in great companies, the conclusion is still that this craft is more art than science.