I had an assignment that led me to the Good to Great book by Jim Collins. There is a lot of great research in the book. Here is my question though: Has Jim Collins or anyone else done a book or research project on the demise of Circuit City and Fannie Mae? Both of these entities are considered going from good to great. The book was published in 2001 and these companies were doing well then. Even the updated audio book was recorded in 2005, making it still outdated. It wasn't long after that both of these entities went from great to terrible (IMO, not so humble though).
Good to Great...Not always
Answers
I am not aware of any updated research on these firms as relastes to the original published book. I was involved in a
I am also suspicious of books like Good to Great. Consider the list of 25 companies that were identified in Tom Peters and Robert Waterman’s 1982 best selling book, In Search of Excellence, based on a McKinsey scoring. These are companies in the book that have all failed or had serious problems: Amdahl, Cheesebrough-Ponds, Data General, Delta Airlines, Digital Equipment, K-Mart, Kodak, Levi Strauss, Raychem, Revlon, and Wang Labs. Despite the hundreds of published books on leadership and strategy my take is that executives continue to struggle pursuing a sustainable competitive edge.
Gary … Gary Cokins
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Gary - Thanks for your insights and commenting. It seems as though everyone in business is looking for the proverbial goose that lays the golden egg when it comes to excellence and being enduringly great. Although many of the companies mentioned above failed in excellence, I wonder if there are underlying principles in "In Search of Excellence" that still apply today. Perhaps the problem is the principles don't change, but the company dynamics do, thus causing them to go from excellence to non-existence.
I haven't read the book, but you have peaked my curiosity about it.
I question many of these books as well. Adding to Gary's comment, life is cyclical, there are ups and downs.
How far up and down a company may go has so many variables that it may rival weather prediction (and we know how accurate that is...).
Much of the cyclic nature has to do with leadership; at all levels of the organization; the culture that the leadership sets; the market, geopolitical trends, etc.
Can one identify best practices? The answer is always yes, but best practices are like an EKG. It tells you what's happening now, may tell you what happened before and may foreshadow the future; but not always.
So like every other aspect to business, best practices must be dynamic to change with the variables that impact the business, and unfortunately these books are static.
Anyone want to collaborate on a "what happened to the 25"?
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Wayne - I think collaborating would be something fun and potentially rewarding to embark on. With a well-written management book on why great companies become bad companies, we could ascertain what other companies can avoid, at least with empirical evidence. The business world will never have enough great management research put into book form.
Steven Levitt had a post on this topic a few years back. http://freakonomics.com/2008/07/28/from-good-to-great-to-below-average/
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Thank you Mr/Ms. Anonymous. The article mentions the book Gary Cokins referenced above too. When I read the opening line of the article I immediately thought of what Wayne said, "I question many of these books as well."
To the point that Levitt makes in the article, if someone bought into the companies at the time of Good to Great was published they would have lost tons of money. The market cannot be predicted. Thanks for sharing the link.
Thank you all for your commentary on this topic. If you continue to collaborate, I will read the fruits of your labor with enthusiasm. I perhaps have a bit more of an "optimistic" perspective on companies that once were great. It is better to have been great at one time than not great ever, don't you think? Besides, the main take away from most business best practices books are the "Hows"; not the "Who" - at least, that's how I read them :) Thx, GAP
Chris - Jim Collins does have a sequel - "How the Mighty Fall" - but not covering the same companies, except Circuit City. The essentials are blogged around the web. Mr. Collins' bibliography and short excerpts are in http://www.jimcollins.com/books.html.
Good to GREAT! to ...... There are a number of issues with studies like this - who says they company was good? Great? Who is defining what is good and great?
The problem is that unless you are actually working for these companies - it is near impossible to really know the culture. I believe that the biggest problem is Sr. Management's focus on profitability and growth - it is far too short term in nature. For public companies - the focus of management is management salaries and bonus -- keeping their jobs - typically at the expense of lower level employees. Whatever happened to focusing on long term shareholder wealth creation. Instead of thinking - if the shareholder's knew how we were spending their money - would they really approve?
As companies grow - they forget what got them where they are. Management is all too willing to spend on themselves ... they think they deserve it and have earned it. They forget they are not spending their money.
How many companies "outsource" offshore - only to bring the work back to the US? Companies are too focused on the bottom line - how much is the check they have to write -- rather than looking to -- what am I really getting for my money.
There is a culture of greed - and it is fostered by an attitude of elitism - I deserve it - but you don't. Just look at C-level salaries and "executive" level salaries - and compare them to the employees. Are CEOs, CFOs, and all those other senior executives really worth such large multiples of average employee salaries? Mediocrity is rewarded - don't rock the boat. Accountability - doesn't really exist - responsibility - it's always everyone else's fault.
Global economy - what so many forget is that what we are doing by offshoring work - we are in effect redistributing wealth -- the only problem is that you will have 2 or more economies that can not afford to buy your products. You raise the wages in one location - and people still can't afford to buy things - and you in effect lower wages here in the US -- shrinking your target audience.
So .... what really does make a company GREAT? I think the problem is with how GREAT is being defined in a culture of greed. These companies that everyone viewed as GREAT - and yet they failed -- maybe the definition of GREAT and how it's measured needs to be re-evaluated.
I could go on and on ..... but what's the point. The biggest example of GREAT to ..... is the US government. We have elected leaders who's only concern is the next election - so their focus is on spending in their own state / city - etc. Raise taxes and keep spending. Talk about a lack of accountability - and a complete lack of morals. They forget they are spending our money - and we as a society are apparently too stupid or unwilling to hold them accountable. They say whatever it takes to get elected -- then there is no accountability - they fall right in line with the rest of the bureaucracy.
UNLESS we the people .... wake up .... and wake up soon .... GREAT .... no matter how its defined will be a thing of the past. The rich are getting richer ..... there is no incentive for the poor to make any effort - since what we hand them is equal to or more than they can make on their own -- and the middle class is being outsourced and taxed out of existence. The thinking needs to be EQUAL OPPORTUNITY -- NOT EQUAL OUTCOME.
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Anonymous - I won't disagree with you, however after reading what you have written above I honestly wonder if you have read the book. The companies Jim Collins outlined weren't always focused on themselves and profits. I think part of your discussion is spot on, whereas the rest is a tirade of aggravation towards the government.
I don't think greed plagues every company, although I would say there is a large portion of companies that are focused on greed and self interests (especially thinking back to the early 2000s with Enron, WorldCom, Arthur Andersen). It usually isn't until after the fact that normal consumers become aware of the greed that it becomes a problem. People should ask themselves if they think Wal-Mart is greedy because of the pay their employees receive, why do people keep shopping there? If McDonald's is only focused on shareholder returns, why do people keep eating there? You see, average people's choices of inexpensive options far outweigh their conviction of how greedy a company is. I don't know you, so I will not put that on you. But people I know personally complain about greedy businesses, yet will not go elsewhere to shop because the prices are too high elsewhere.
You mention the problem is how great is defined. How would you evaluate greatness in a company? Like I said I don't necessarily disagree with you. But what you have written above doesn't speak to any of that, only complaints.
If you're on LinkedIn, I asked this question in HBR's group. Last I checked it has rendered 110 comments in two days, made me a top contributor to the group (which never lasts long anyways), and has generated some discussion. Here's the link:
https://www.linkedin.com/groups/Good-Great-Not-always-3044917.S.5878177965434499076?view=&gid=3044917&item=5878177965434499076&type=member&commentID=discussion%3A5878177965434499076%3Agroup%3A3044917&trk=hb_ntf_COMMENTED_ON_GROUP_DISCUSSION_YOU_CREATED#commentID_discussion%3A5878177965434499076%3Agroup%3A3044917
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Some great insights. Very educational! I found the comment(s) by Kevin Herring to be well thought and formulated.
One of the comments was about getting the right people on and off the "bus" on the road to greatness. I didn't see how you got the ownership "into the sidecar" as an option...
I, too, am skeptical about sustainable competitive advantage. Despite all of the books, and the educational institutes and the untold billions spent, I have yet to see truly sustainable excellence. It comes and goes with truly excellent people. To some extent you can institutionalize their basic thought processes, but not to the depth that it gets picked up by the rest of the enterprise and continues to drive it forward.
I enjoyed reading this book. The hedgehog principle and the flywheel chapters fit what I believe are important business topics and concepts. Some degree of skepticism about guaranteed results should be applied to all systems discussions ... but I would put this book into the category of most useful business books in the last twenty years.
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