Book Report Good to Great: Why Some Companies Make the Leap… and Others Don’t (Jim Collins, 1996)

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Book Report

Good to Great: Why Some Companies Make the Leap… and Others Don’t (Jim Collins, 1996)

In his book “Good to Great” Jim Collins asked the question, "Can a good company become a great company and if so, how?" Collins and a devoted team of 22 researchers embarked to discover what transforms good companies into truly great companies. To begin the research for the Good-to-Great study, they searched for companies that: performed at or below the general stock market for at least fifteen years; then at a transition point began to pull away from the competition, and sustained returns of at least 3 times the general market for the next fifteen years. They started with a list of 1,435 companies that appeared on the Fortune 500 list from 1965 to 1995 and ended up with only 11 that made the cut. These eleven companies produced, on average, a return of 6.9 times the general stock market during the 15 years following the transition points. Collins chose a 15-year span to avoid "one-hit wonders" and lucky breaks. The companies that were selected were Abbott Laboratories, Circuit City, Federal Home Loan Mortgage, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo.

In the book, Collins highlights some important factors which are the result of the research. Although there are several factors involved for taking a company from good to great', what these great companies turned out to have in common was a particular kind of leader during the transition period, called Level 5 leaders. These top executives "possess a paradoxical mixture of personal humility and professional will"

In Good to Great Collins classifies leaders into five levels. A level 1 leader is a highly capable individual. He plays an important role in the success of his organization through his own talent, knowledge, skills, and good work…...

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