Good to Great: Why Some Companies Make the Leap...And Others Don't

Good to Great: Why Some Companies Make the Leap...And Others Don't

by Jim Collins


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Good to Great: Why Some Companies Make the Leap...And Others Don't by Jim Collins

The Challenge
Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the verybeginning.

But what about the company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness?

The Study
For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?

The Standards
Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies, including Coca-Cola, Intel, General Electric, and Merck.

The Comparisons
The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to make the leap from good to great. What was different? Why did one set of companies become truly great performers while the other set remained only good?

Over five years, the team analyzed the histories of all twenty-eight companies in the study. After sifting through mountains of data and thousands of pages of interviews, Collins and his crew discovered the key determinants of greatness — why some companies make the leap and others don't.

The Findings
The findings of the Good to Great study will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include:

  • Level 5 Leaders: The research team was shocked to discover the type of leadership required to achieve greatness.
  • The Hedgehog Concept (Simplicity within the Three Circles): To go from good to great requires transcending the curse of competence.
  • A Culture of Discipline: When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great results. Technology Accelerators: Good-to-great companies think differently about the role of technology.
  • The Flywheel and the Doom Loop: Those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap.

“Some of the key concepts discerned in the study,” comments Jim Collins, "fly in the face of our modern business culture and will, quite frankly, upset some people.”

Perhaps, but who can afford to ignore these findings?

Product Details

ISBN-13: 9780066620992
Publisher: HarperCollins Publishers
Publication date: 10/16/2001
Pages: 320
Sales rank: 1,290
Product dimensions: 6.40(w) x 9.20(h) x 1.40(d)

About the Author

Jim Collins is author or coauthor of six books that have sold in total more than ten million copies worldwide, including the bestsellers Good to Great, Built to Last, and How the Mighty Fall. Jim began his research and teaching career on the faculty at Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. He now operates a management laboratory in Boulder, Colorado, where he conducts research, teaches, and consults with executives from the corporate and social sectors.


Boulder, Colorado

Date of Birth:

January 25, 1958

Place of Birth:

Aurora, Colorado


B.S. in mathematical sciences, Stanford University, 1980; M.B.A., Stanford University, 1983

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Good to Great: Why Some Companies Make the Leap...and Others Don't 4.1 out of 5 based on 0 ratings. 188 reviews.
Shyamashree-Rudra More than 1 year ago
Good to Great is Jim Collins's follow-up to Built to Last, the 1994 management classic, which he co-wrote with Jerry Porras. Infact, Collins calls Good To Great a "prequel" to his hugely successful Built To Last. I call it one of the most important Business Leadership books I have read. While Built To Last was a great book, however, it left out critical information, because those companies were already great. What about those of us struggling to move our companies from Good To Great as opposed to those trying to hold on to greatness? The missing piece is clearly identified in Collins' Good To Great. Collins spent five years of research assisted by 20 business school students, who analyzed 1,435 public companies for this book. Their findings - just 11 companies from were able to sustainable their good to great efforts. Having identified the companies that made the leap from Good To Great, Collins and his team set out to examine the transition point. What characteristics did the Good To Great companies have that their industry counterparts did not? What didn't the Good To Great companies have? Collins maps out three stages, each with two key concepts. These six concepts are the heart of Good To Great and he devotes a chapter to explaining each of them. .Level 5 Leadership .First Who... Then What .Confront the Brutal Facts .The Hedgehog Concept .A Culture of Discipline .Technology Accelerators Many experts have problems with the way Collins and his team performed their "research." Some argue that Collins's measure for greatness is flawed or that his work fails to be classified as true research because it does not follow any scientific method. Or that the key measure used by Collins ("Ratio of Cumulative Stock Returns to General Market") looks at the company only through the eyes of one stakeholder - the owners. These arguments may be a bit unfair because some of the variables in business do not lend themselves well to true research; greatness is a subjective quality; and the amount of immeasurable historical variables for this particular project is so immense. If research of this nature was an easy task, we should have written tried and tested formulas for perfect businesses, leaders, schools, cities, et al during our 3,000 plus years of civilization. Unlike many business books that are based on hype and after-market consulting services, Good to Great is mainly based on good old fashion business principles. Sure, Collins renames some of them with gimmicky names like Hedgehog Concept and The Flywheel. But for the most part, Collins's book has some sound principles in it that the reader shouldn't necessarily take as a game plan, but rather a starting point for conversation, reflection and inspiration both for themselves and their team. How does his research reflect in the current economic slowdown? If I were to apply Collins' theory in today's recessionary environment, I would show one priority above all others: to acquire as many of the best people as possible. I'd put off everything else to fill my bus. Because things are going to come back. The flywheel is going to start to turn. And the single biggest constraint on the success of any organization will be the ability to get and to hang on to enough of the right people. To sum up, Good to Great can be a very useful tool when its principles are adapted to the user's unique situation and variables.
MAXIMUS15 More than 1 year ago
After reading this book I was not very impressed. Jim Collins started with a template and tried to find companies that would fit into his template. His leadership idea is nothing new and he could have taken all the leaders in the world and found stories that fit into his mold. His revelations are obnoxious and he spends about half the book talking about the good to great concept instead of using deep analysis to uncover some hidden truths. One of the greatest flaws of this book is how he took a good look at certain companies through interviews but he failed to study any of the accounting changes that effected some of the businesses he discusses. One of the most notable is Walgreen's and circuit city who were able to structure their leases in such a way that they did not have to disclose them on the balance sheet as assets or liabilities. Walgreens and Circuit City grew because their bankers didn't get the full picture of how much debt the company was able to take on under the table and not disclose. Now that these companies are forced to disclose that information they appear less solvent and their stock price has adjusted to reality. Additionally Circuit City tanked when the new accounting practices and bad economy showed how insolvent they really were. Other things Jim Collins failed to mention involved the establishment of right to work states that ended union control on companies and allowed NUCOR to establish one of the most efficient manufactures in the world. Most of the companies Jim talks about have fallen apart in heaps and are bad to average. He should have written a book about how little research he had to do to write a book that would get praise from the entire academic sector but be a complete bad to worse book at best. Don't buy the book! Save your money and take some accounting classes and you can then uncover what takes a company from good to great!
KROG More than 1 year ago
I thought this book was well written and a pleasure to read. While reading I could not help but wonder where are these companies now? Many are no longer in business and several have been able to continue with their success. Circuit City, Fannie Mae, and Gillette are three that are no longer “great”. Two that seem to still be thriving are Walgreens and Wells Fargo. Although three out of the eleven companies studied are no longer in business I do not think this discredits Collins’ work. His overall message that, “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice” can still be applied to anyone who wants to enhance their company. The book is instructive and accessible and I think this is a great book to add to the curriculum for all business students. By using metaphors Collins makes his ideas easy to understand and follow which will become critical as future business executives try to emulate. He gives concrete examples of company’s successes and failures and then applies tangible models that are easy to imitate. I also believe that this book goes beyond just a business book. This book can be used for several different professions and for the overall betterment of one’s life. We all look to become an effective leader, find something that we are truly good at, and surround ourselves with people who help achieve our goals. Sometime in life it better to think like Collins and not always try to come up with the answers, but better to ask the right questions.
Locky More than 1 year ago
I read Good to Great about four years ago and I am constantly going back to it to keep me on the course. I was amazed not only by the revelations, but also by how much of the ideas seem to be common sense, but really aren't in the business world. It became by goals to find a company matched the ideals laid out in this book (and happily, I think I have). The book is very easy to read and the research is laid out and explained in a very thoughtful way. There are lessons here well beyond business. A high school teacher friend of mine read this and said he found it very insightful to his world as well. A must read.
Anonymous More than 1 year ago
This book was required reading for the company's annual store managers meeting in Las Vegas. Time was assigned in the agenda for discussion groups and roundtables to explore it's merits. So we all (most of us) dutifully read this tedious work only to find that any sessions related to the book were cancelled due to "Questions concerning the book's relevance" and designated free time or the Corporate version of "Basket Weaving". The flawed process allowed companies with creative accounting practices to appear greater than reality. I am a avid reader both personally and professionally. Reading this took hours of my life I'll never get back...
Moore03 More than 1 year ago
This book has several pointers for the organizational leader. These are tried and true methods used by organizations who's success spaned decades.
John_Clinton More than 1 year ago
As Circuit City went under and some of the other Good to Great companies struggled critics pointed out that Jim Collin's companies are not quite that great and hence his suggestions not useful. I think they are wrong. It does not matter how well these companies do in the long run. The book uses a specified observation period (15 good, followed by 15 great years) and develops propositions based on this period. A more valid criticism of the book is related to the method. Case study research - as the method is called in management sciences - allows you to develop ideas and theories not test them. Jim Collins could be more explicit about this. Once we establish what the book and can't do, it actually provides great thoughts on how you can turn your company from good to great. But what next? How do you stay there. Jim Collins'suggest you take a look at 'Built to Last', a book that describes how firms succeeded over many decades. It's a great read but a little dated (17 years since it was first published). I recommend that you take a look at the newly published 'Enduring Success. What we can learn from the history of outstanding corporations'. Same question but incorporation of fresh management thoughts plus connection to current debates.
AryanE More than 1 year ago
This book is mostly about outcomes of Jim Collins studies into the factors that determine whether a company would survive in the long-term. He believes companies should have a set of values so that they are able to achieve the success that they were looking for  and to sustain it in the long run. According to Collins, this purpose does not have to be explicit as long as the team members are equally  devoted to the same set of goals. He started his research on hand-full of companies and he used some criteria’s such as: period of growth and sustained success which personally I believe that are two of the most important facts in determining the sustainability of a business. Collins states a number of  management, personnel, operational practices, behaviors, and attitudes that are both beneficial and against the good-to-great transition. After reading the book I did not really feel that Collins is biased towards any one idea but he mostly put his concerns towards big companies and not the small businesses which make this book not that inclusive.  
Anonymous More than 1 year ago
huize on LibraryThing 7 days ago
I learned a lot from this book. It makes me to think about the scoop of my company.
blondestranger on LibraryThing 7 days ago
Fluff. Good information softened in a lot of consultant-ise. There are probably better books to read on the subject.
shawnd on LibraryThing 7 days ago
Different than Built to Last. This one is still a research-based study with strict controls and exhaustive research. However, this one is not used to identify 'what' a great and enduring company is but 'how' to become a great company if you're only a good one now. It's really a step by step recipe or handbook that a company (or team or association or foundation) can progress through to become great. We used this at my company for this purpose and the results were startling.
eduscapes on LibraryThing 11 days ago
This book focuses on moving organizations from "good" to "great" with lots of applications for education.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
A must read for all management levels.
Anonymous More than 1 year ago
Good to Great is a book that talks about 11 Fortune 500 companies that were great and what set them apart from their competitors. It is written in a way that is very easy for anyone to read and understand the concepts. You do not need to study business to understand what the companies did in order to be successful. Although the book was not very long, it was filled with a lot of useful information and was written so that the concepts were being reinforced throughout the book. I think that some of the concepts were even ones that would help someone to succeed in other areas, not necessarily just in running a business. It was nice that the research was not simply done with just statistics alone, but information was pulled from actual interviews and stories that made understanding the concepts easier. One important concept that is addressed in the book is a level 5 leader. I liked how it talks about what people assume makes a good leader of a company, and what qualities the leaders of these 11 great companies had. I think it was very eye opening to whether the leaders around you, or even if you have the qualities that would take a company from good to great. I did appreciate how you can tell there was no goal message that Jim Collins had for this book. Meaning that it does not seem to appear that Collins had a theory of what made these companies great and looked for data to support his theory. Instead it shows that Collins and those that supported him in writing this book collected data and took their time in making sense of it. It even says in the books that they would go back and forth on a topic until they finally made sense of their findings. I am very interested to read more of Jim Collins books, especially to understand what happened to make some of the companies in this book fail after being great for so long. I would highly recommend this book to anyone.
JoshW45 More than 1 year ago
A good book for executives. I found it more applicable to executives in a large company than an entrepreneur who runs a small company. But the info is very good and backed up by research instead of just the author's opinion.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
Anonymous More than 1 year ago
Anonymous More than 1 year ago
This book takes the data from the Fortune 500 and finds only 11 of them that fit very strict criteria for being considered to be “Great” and analyzes exactly what brought them to that point. If figuring out what makes a company go from being average compared to the general market to slowly growing to the point where they consistently outperform the rest of their market by 3:1 isn’t interesting to you, then this isn’t the book for you. Otherwise, this book isn’t too long and it will give you plenty of lessons regarding business mentality. It is important to note that a lot of the research is done in interviews and not just strict numbers so a lot of the data will be a little fuzzy, but the concepts themselves will reoccur and be reinforced plenty throughout the book. This is a highly systematic and logical book that builds up each chapter upon the previous knowledge but that is casual and well explained so anyone can read it. I like how it starts with the common beliefs of what creates a great company, like a single genius leader or fast expansion, and quickly fixes those misconceptions before moving onto the rest of the ideas. Its examples are concrete and highly detailed and, even without reading their specific research, it is obvious that a lot of work was done to gather all of the data. The most common criticism I have read is that the companies they followed are no longer doing well, but it is important to note that this book is not meant to predict the future, it was meant to interpret the present. The companies they analyzed were, at the time doing well and shared characteristics that were then deemed evidence of what a company should do to grow. Even if the companies all went bankrupt in the next few years, the book’s research would still be sound and valid. They might even make another book called “Great to Bankrupt” in that case. This book does not find evidence to support an answer. They find an answer from the evidence and that is why I highly recommend this book.  In short, this book does a good job of providing a cohesive understanding of what they researched compacted into a form that is easily understandable without compromising the information. It is well written, well organized, and well researched and I look forward to reading “Built to Last” next.
Lore27 More than 1 year ago
Good review for the experienced manager.
Anonymous More than 1 year ago
Jim Collins is a man driven by relentless curiosity. He once was a student, but now is a teacher of enduring great companies. In Collins’ book, Good to Great, Collins explains the various steps required to transform a “good” company into a “great” company.  Visualize a massive flywheel that weighs at more than a thousand pounds resting on an axle. The goal is to get the flywheel spinning as fast as possible. At first, pushing the flywheel will seem impossible and not show any visual progressive results. However, with continued effort the flywheel begins to gradually build momentum and one revolution of the flywheel is completed, two revolutions, three revolutions, and so on. Each push accumulated and got the flywheel spinning. Collins uses this accurate depiction as a key to explaining the many small steps it takes achieve success.  The three main keys that build up momentum in a company and lead to breakthrough are: disciplined people, disciplined thought, and disciplined action. Collins goes into great depth explaining these three subjects revealing the approach that numerous companies take to become successful. Whether you have a company you are trying to improve or you are simply interested in how present companies have come to be the successful image they are today, Collins’ Good to Great is definitely a recommended read.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
Principles I can apply to my career, and equally to my personal life. What a wonderful book!