Book Review, “Good to Great” – Jim Collins
An important caveat to the concept of core values is that there are no specific “right” core values for becoming an enduring great company. No matter what core values you propose, we found an enduring great company that does not have that specific value…. The point is not what core values you have, but that you have core values at all, that you know what they are, that you build them explicitly into the organization, and that you preserve them over time. – Jim Collins; Good to Great, Why Some Companies Make the Leap and Others Don’t
I finally got around to reading this book last week. Good to Great is one of the biggest must read business books of the 21st century. It chronicles the rise of eleven of the most successful companies on the New York Stock Exchange in the last half century and compares them to eleven other companies in similar industries that failed to rise during the same time period. The purpose of the book it to try and figure out what makes certain companies great and others merely good or mediocre.
It’s a really good read and well worth the effort if you are looking for some insight into how to build a great organization. But personally I think the research is flawed and the focus far too narrow to use the words, “Good” and “Great” to describe these companies. Collins and his team of researchers focussed entirely on stock price to measure the rise of these companies and while this is a good quantitative measure it fails at addressing things like corporate governance, environmental stewardship and labor relations.
The quote above is the only reference I found in the entire book that hinted at the idea of stock price being only part of the story. Core values are what really make a company that much seems clear, but by acknowledging that fact and then stopping short of giving any kind of opinion on greatness it is clear that Collins either does not wish to reveal his own core values or he doesn’t understand the true meaning of the word greatness.
Collins goes on to state that companies like Wal-Mart with their abysmal labour relations and product quality controls, Coca-Cola with their less than stellar environmental record and The Ford Motor Company with their history of human rights violations can still be considered great because they have consistently beaten the market and continue to grow.
That’s not greatness in my book.
One definition of Greatness in Dictionary.com defines it as:
Wonderful; first rate, very good.
Refusing to pay your workers a living wage, like Wal-Mart, stealing water and then selling your unhealthy product back to the citizens for less than the cost of what little water you leave them, like Coca-Cola and strip mining Iron Ore and providing hardware and kick backs to support corrupt governments in South America, like The Ford Motor Company did, are certainly not wonderful, first rate or very good.
To be fair you can define greatness simply as a measure of size so for that Collins can be forgiven. But there is a whole lot more to greatness than simple growth and we would do well to recognize that not all big and growing companies are “great” companies. Companies and leaders need to remember a more comprehensive definition of the term if they are going to build enduring great organization in their own right.