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From the CEO Bookshelf: “Good to Great”

By: Mark Kleinschmidt

This month’s book is a classic.  It does focus on large corporations that that have made the leap from just being good to becoming GREAT, but it has some valuable lessons for small business owners.  “Good to Great: Why Some Companies Make the Leap… and Others Don’t” is a management book by James C. Collins that describes how companies transition from being good companies to great companies, and how most companies fail to make the transition.  Time Magazine has listed it as one of the 25 Most Influential Business Management Books ever written.

The book is based on a study of 1,435 companies, exploring how they fared over a 30-year period. Collins and his team isolated 11 companies that had made the leap from ‘good to great’ and compared these to the average companies who either failed to make such a leap or else later fell back.

Collins introduces several concepts in the book:

What the heck is The Hedgehog Concept?
Successful organizations focus on what they can do best.  Sounds simple, but many time a large corporation or a small business can get distracted and get pulled away from it core competency and mission.   Jim Collins and an interesting story about a hedgehog and how it has survived to make this important point. The hedgehog concept is about knowing yourself as a company, acting in line with that identity, and having a clear goal.  It’s all about simplicity.

Success comes from lots of small steps.

When you look at them from a distance, good-to-great companies seem to go through a sudden and dramatic transformation. The companies themselves, however, are often totally unaware they’re in the midst of changing; their transformation has no defined slogan, launch event, or change program.

Rather, their success is the sum of tiny, incremental pushes in the direction of their simple strategy.  Once you form your hedgehog concept, stick with it. That’s the only way to see results.

Confront the brutal facts and never lose faith.

Good-to-great companies were not afraid to confront the brutal facts of their reality.  Even when the facts told a bad story, they still retain unwavering faith that somehow, they’ll prevail in the end.   They stuck with their Hedgehog Concept.  Whether they face stiff competition or radical regulatory changes, good-to-great companies master the delicate balance of being able to acknowledge these realities without becoming defeatist.

Get the right people on the bus.

When you look at the current challenges in the current labor market, this good to great concept is spot on.  Getting the right people in the right place are the foundation of greatness.  The author uses the seats on the bus as a way to describe an effective hiring strategy.  The importance of hiring the right people goes beyond just the CEO and top leadership. It is for every position in the entire company, and it makes a huge impact.

In fact, asking “who” takes precedence over asking “what.” In other words, the transformation from good to great always begins with getting the right people into the company and the wrong people out of it.  Don’t put off dealing with the wrong people – it’ll only frustrate the rest of the organization.

Why leadership matters.

Through his research, Jim Collins found out, the best CEOs had a unique blend of humility and professional will. All the good to great companies had CEOs what he called Level 5 Leaders. They were not only excellent individuals, team members, managers, and leaders; they’re also single-mindedly ambitious on behalf of the company, fanatically driven toward results, and want their organization to continue performing long after they leave.

Far from being ego-driven, level 5 leaders were modest and understated. They’re slow to take credit for their company’s achievements. They’re always looking for opportunities to praise their team but are quick to shoulder blame and responsibility for any shortcomings.


When you get a chance, make the time to read this classic business book, it has lots of great lessons for a small business owner on the road to becoming the real CEO of your business. Good to great does not happen overnight.  It takes time and sticking to your Hedgehog Concept and getting the right people on the bus and into the right seats.

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