Wednesday, December 28, 2005

Book review: Good to Great by Jim Collins

I’ve used some of the Christmas time to rush through to the end of my latest read - Good to Great by Jim Collins (Random House, 2001). I’ll admit upfront I wasn’t going to read this book but the senior management at my company have been reading it over the last year so I thought I should join in too!

Its easy to see why the book has been such a big seller. Its easy to read - short and a chatty style - and it makes you feel good, it suggests you do nice things in your company not nasty things.

Personally I don’t find it adds very much to the discussion that hasn’t been said already. Yes it introduces a few new metaphors (the Hedgehog concept and the Flywheel) but nothing you can’t find elsewhere really. In part this might be because the book is a “prequel” to Jim Collins and Jerry Porras’ Built to Last.

Yet I found the book reminded me more of another book, The The Living Company by Arie De Geus (1999). This should not be a surprise because De Geus discusses the similarities between Built to Last and Living Company so we should expect a few.

Unfortunately Good to Great lacks a good bibliography or further reading sections. This seems to be a common failing in many business blockbusters, they strip out the endless referencing that academics love and is necessary for hard research and journals to make it easier to read but at the same time you loose the context of where the book fits in or where to go next.

For example, Collins tells us that his Great Companies “confront the brutal facts” but doesn’t discuss how they do this or why they ignore them. Arie De Gues does, he explains why companies ignore known facts and what they can do about it - his solution is to “create future memories” by “planning as learning” and “scenario planning.”

(One could also refer to Pfeffer and Suttons Knowing-doing Gap on this subject but again Collins doesn’t.)

One more tiny example I have to put in so I can recommend a another good book: Collins mentions the importance of project post-mortems but that’s it. Norm Kerth’s Project Retrospectives goes into great detail on how to do this.

Why bang on about referencing? After all, references do make the book harder to read. Well, references add credibility for one. Second, I’m unhappy when an author seems to be claiming all the ideas for themselves - not that Collins does, but some other authors do. But perhaps the most important reason is so you can learn more about a particular issue.

Anyway, enough about referencing, what does this book say? The big themes are:

  • No single event that creates a great company, not hiring a particular CEO, discovering a technology or launching a product. Its emerges over time.
  • Get the right people, get shared values and the rest will come
  • Confront the brutal facts: most companies fail to pick up on the important, life threatening or enhancing, facts and events.

Put all this together I found the book a pretty convincing argument for the argument that business strategy is more emergent than planned. Collins more or less says that most companies didn’t recognise their strategy until they were in the middle of it. Again, overtones here of Henry Mintzbergs’ The Rise and Fall of Strategic Planning but Collins doesn’t tell us this.

So if your looking for an easy read then this book is worth the money. If your looking for more depth then I recommend you read The Living Company . Among other thing both discuss:

  • Getting the right people, and getting rid of the wrong ones
  • Develop your people, they are there for the long term
  • Quality discussions between people
  • Recognising and acting on facts and events

In fact, one of Collins interviewees, at Kroger supermarkets, actually says “the company had a will to live.”