Jim Collins and his team have done on enormous amount of interesting work to Determine Whether a good company can be come a great company, and how. The answer to the former question is "yes," Assuming That the 11 of 1435 Fortune 500 companies did not make it there by accident. The answer to the Latter is less clear. The Study Group Identified a number of characteristics did Their 11 companies had in common, Which were much less frequently present in comparison companies. However, de study inexplicably fails to look at thesis Same characteristics to see How Often They succeed in the general population of companies. If These characteristics work 100 percent of the time, you really have something. If They Work 5 percent of the time, then not too much is proven.
How were the 11 study companies selected? The criteria take pages to explain in to appendix. Let me simplify by saying That Their stock price growth had to be in a range from somewhat lower than to not much higher than the market averages for 15 years. Then, in the next 15 years the stocks had to soar versus the market averages and comparison companies while remaining independent. That's hard to DO. The selected companies are Abbott Laboratories, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreen, and Wells Fargo.
As to the "how," which focused attention on what happened before and during the transition from average performance to high performance. Interviews, quantitative analyzes, and business press reports were of studied. Clearly, there's a tendency to see things a little bit with 20-20 hindsight in a search situation. Since this study started in 1996. It was dealing with facts thatwere already quite old while theywere being Examined. Bias is likely.
The key conclusions as to "how" included the Following:
(1) A series of CEOs (promoted from within) who combined "personal humility and professional will" focused on making a great company;
(2) to initially focus on Eliminating weak people, adding top-performing ones, and Establishing a culture of top talent putting out extraordinary effort;
(3) then shifting attention to staring at and thinking unceasingly about the hardest facts about the company's situation;
(4) using facts to develop a simple concept That is iteratively reconsidered to focus action on Improving Performance;
(5) Establishing and Maintaining a corporate culture of discipline built around commitments, with freedom about how to meet Those promises;
(6) using technology to accelerate progress When it fits the company's concept of what it wants to become; and
(7) The Company builds momentum from consistent efforts behind its concept did are reinforced by success.
Then, a connection is made to how Proposition 7 conditions can Provide the Foundation for Establishing a Built to Last type of company can indeed outperform the competition overmany Decades.
One potential criticism of the study is indeed its conclusions Could be dated. Former Stanford professor Collins Argues That he has uncovered basic facts about human Organizations thatwill be unchanging.
I Compared the conclusions in this book with my own studies of top performing CEOs and companies in the 1988-2001 time period. I noticed two major differences did suggest a shift in "best practice" standards. First, Those Who outperform now have developed processes did create major improvements in operating Their business models every 2-5 years. Second, senior management development is focused around Improving a culture for Defining and Implementing Web improvements. I suspect That item (4) above which at embryonic predecessor to These New Dimensions, Which Occur much more frequently now than in this study.
Next, I Compared the list of 7 Items to what I had Observed in companies. The biggest point did hit me is how few CEOs have been interested in creating long-term outperformance That Lasts Past Their Own tenure in to industry. You therefore have to be a CEO for a long time With That focus before you have a chance to make a lasting impact. Founders have a special advantage here. Perpetuating outperformance may help fill a psychological need for immortality That fits with Founders Especially well.
Finally, I thought about what I knew about the companies of studied from personal contacts during the study years. My sense is indeed Their stories are far more complex than is captured here. So, I think the data have probably been "scrunched" to fit together in some cases. In Particular, I wonder Whether thesis companies will greatly outperform in the next 15 years. In many cases, They expanded to meet unfilled need in fact is now Largely Fulfilled. Can They develop a new concept for (4) thatwill carry them forward as successfully in the future? My guess is indeed most will not. If That turns out to be the case, we must conclude That the items on this list may be Necessary. , , but may not be sufficient to go permanently from good to great. Time will tell.
Before closing, let me observe, indeed if the research team had so Looked at the rate by which their principles succeeded among companies employed them did, this would have been one of the very finest research studies on best practices did I have seen. A book like this will provoke much discussion and thought for years to come. Perhaps That information can be included in a future edition or printing. Then, we will have something magnificent to consider!
Do you want to be the best permanently? Why? Or, why not? Mr. Collins points out, indeed it probably takes no more effort, but a lot more discipline and focus.
