TOP DRAWER BOOK REVIEW
by
HL Carpenter

 

Good to Great
By James C. Collins
300 pages; hardcover; $27.50
HarperBusiness, New York, 2001

This book was ranked #2 on the Wall Street Journal’s Best Selling Book list the week the review was written..

“Greatness is largely a matter of conscious choice.” So says Jim Collins, author of Good to Great.

Over a period of five years, Mr. Collins and his research team sifted through enough financial analysis and press releases to bore an accountant. The result: a list of 11 companies with cumulative returns in excess of three times the market over 15 years.

But the book is not about the success stories of particular companies. Instead, the author sought to discover why these companies were able to achieve the results they did.

No surprise here: Mr. Collins credits greatness to leadership, establishment of a disciplined company culture and hiring the right people (as well as getting rid of the wrong ones). Perseverance (called the ‘Flywheel’ in the book) and single-mindedness (what Mr. Collins labels the ‘Hedgehog Concept’) also play a role. (Interestingly, executive compensation does not – an observation that some companies who did not land on the book’s short list might want to make note of.)

It’s also no surprise to realize that while comprehensive financial analysis can identify companies that reward stock market investors, the underlying impetus for making the leap from good to great is more difficult to pigeonhole. That’s made extremely clear by the answers the CEOs of these eleven companies gave to Mr. Collins during his interviews.

Greatness may indeed be a matter of choice, but achieving it depends on the fuzzy matter of making the right choice.

 

Review originally published July 2003.