In his previous bestseller, Built to Last, Jim Collins explored what made great companies great and how they sustained that greatness over time. One point kept nagging him, though - great companies have, for the most part, always been great, while a vast majority of good companies remain just that: good, but not great. What could merely good companies do to become great, to turn long-term weakness into long-term supremacy?
Collins and his team of researchers used strict benchmarks to identify a group of eleven elite companies that made the leap from good to great and sustained that greatness for at least fifteen years. The companies that made the list might surprise you as much as those left of (the likes of Intel, GE and Coca Cola are nowhere to be found). The real surprise of Good to Great isn 't so much what good companies do to propel themselves to greatness - it's why more companies haven 't done the same things more often. *How Did They Do It?
The author and his team of researchers established the good-to-great benchmark as follows: The companies had to have experienced 15-year cumulative stock returns that were at or below the gen¬eral stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years. Each company had to demonstrate the good-to great pattern independent of its industry. Each company had to demonstrate a pattern of results. Each company was compared to other similar com¬panies that either never made the good-to-great leap (or made it but did not sustain it), in order to determine what distinguished the good-to-great company from all others. When the dust cleared and the good-to-great compa¬nies were identified, the author and his researchers found distinct patterns of behavior in those who led each company and the people who followed them - patterns that concerned disciplined people, thought and action. Level 5 Leadership
They set up successors for success. Many leaders fail to set their companies up for success when they depart, or pick a weak leader to replace them at the helm - after all, what better testament to your own personal greatness than that the place falls apart after you leave? Level 5 leaders like Fannie Mae's former CEO, David Maxwell, make sure those who follow them are poised to continue a successful path, or to exceed the expecta¬tions that arise as a result of that success. Maxwell came under fire from Congress for the perceived excessiveness of his $20 million retirement package (Fannie Mae operates under a government charter). Instead of serving his own self-interest and taking the money, he instructed his successor to withhold the remaining balance of $5.5 million, saving the company from a potentially bad (not to mention threatening) relationship with Washington. They are compellingly modest. In contrast to the very I-centric style of some other leaders, Level 5 leaders do not typically talk about themselves, preferring to direct attention to other individuals, or to the results of the company as a whole. They don't aspire to be larger-than-life heroes, or to be placed on a pedestal. They are seemingly ordinary people quietly producing extraordinary results. They have unwavering resolve. Level 5 leaders do not simply exude modesty or humility; they also have a ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great. If you begin with the "who," rather than the "what," you can more easily adapt to a changing world. If you have the right people on the bus, the prob¬lem of how to motivate and manage people largely goes away. If you have the wrong people, it doesn't matter whether you discover the right direction-you still won't have...