The Economist says that Jim Collins is probably the best writer on economic related content in the world.
This book came out as a result of a five year study by Jim Collins and his team of 21 members on 11 Fortune 500 companies. They have selected those Fortune 500 companies which beat the market at least 3 times over the period of 15 years.
Their study focuses only on public companies because it was much easier to conduct the research and retrieve information from public archives. The results of their research drew out only 11 companies from Fortune 500 which achieved such results.
These companies are: Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Phillip Morris, Pitney Bowes, Walgreens, and Wells Fargo.
They researched these companies in comparison with reference companies (from the same industries, with the same opportunities, which had different results). They have also compared the great companies with less viable companies.
Reference companies were: Upjohn, Silo, Great Western, Warner-Lambert, Scott Paper, A&P, Bethlehem Steel, R.J. Reynolds, Addressograph, Eckerd, and Bank of America.
Less viable companies were: Burroughs, Chrysler, Harris, Hasbro, Rubbermaid, and Teledyne.
They have invested more than 15,000 hours in researching, analyzing, interviewing people, and interpreting the results.
This book will teach you how these companies changed their status from being good companies (over a period of 15 years) to becoming great companies for an unlimited period of time.
Jim Collins and his team expose to us the formula for building ever lasting successful companies by following few very important principles:
1. “Good” is the toughest enemy of “great”
2. Great companies have Level 5 leaders. This book exposes the characteristics of such leaders.
3. First you have to have the right people and then you can focus on the right things to do.
4. Stockdale Paradox: Always hope for the best, but be able to constantly face the cruel reality without losing your hope.
5. Build your business around the Hedgehog Concept
6. Cultivate discipline.
7. Make use of technology accelerators.
8. Build your business around the concept of flywheel.
9. Getting from “good to great” to “building to last”.
Personally, I have discovered that most of the companies that fail do not discipline themselves to apply these principles. All of us can see large companies falling or going bankrupt, while other companies grow to become successful on the long-term, as nobody would expect.
I have created several notes and highlighted different portions of the book which appeared to have a lot of importance to me. I would re-read my notes and the highlights that I made every now and then because I will apply these principles in my path to becoming a Level-5 leader at the top of a great company.
Here is a quote from the book:
“Good-to-great transformations look dramatic and revolutionary on the outside but actually are organic, cumulative processes on the inside. There is no single defining action, no grand program, no one lucky break or miracle moment.”
Here is how I suggest you to get the most out of this book through the technique of Smart Reading:
1. Take a pen and start interacting with the book by underlining concepts, circling words and/or highlighting paragraphs which you think are the most import. Since this book is based on a lot of research, go ahead and find the research articles on the internet (as many as you can) and see if you get to the same conclusions as the author did.
2. Different ideas will flow through your mind as you go along with reading the book. Write them down on the blank sides of the pages.
3. Take the book every now and then and re-read everything you have highlighted, circled, and/or underlined. Focus on the ideas you have written down. You should also write the most important ideas from the research articles you found on the Internet.
Doing these three easy steps will practically boost your knowledge, it will help you to easily apply the most important principles of the book and you will land among the 3% of the most successful people in the world.
Note: If you read the book on a smartphone or tablet, just use an application which allows you to highlight and write notes within the book. There are plenty of such applications.
Get it here (I highly recommend the hard cover version):