Good to Great: Why Some Companies Make the Leap... and Others Don't

The Challenge:
“Built to Last,” the defining management study of the nineties, showed how great companies triumph over time and how to engineer long-term sustained performance into the DNA of an enterprise from the very beginning. But how can good, mediocre, or even bad companies achieve enduring greatness?

The Study:
Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing causal characteristics?

The Standards:
Using tough benchmarks, the team identified elite companies that made the leap to great results and sustained those results for at least fifteen years. The cumulative stock returns of the good-to-great companies beat the general stock market by an average of seven times in fifteen years and better than twice that of a composite index of the world's greatest companies, including Coca-Cola, Intel, GE, and Merck.

The Comparisons:
The team contrasted the good-to-great companies with those that failed to leap and, over five years, analyzed the histories of twenty-eight companies to discover the determinants of greatness.

The Findings:

·       Level 5 Leaders: The team was shocked to discover the type of leadership required to achieve greatness

·       The Hedgehog Concept: (Simplicity within the Three Circles): To go from good to great requires transcending the “curse of competence”

·       A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results

·       Technology Accelerators: Good-to-great companies think differently about the role of technology.

·       The Flywheel and the Doom Loop: radical change programs and wrenching restructurings almost certainly fail to leap 

“Some of the key concepts disc