Some random, disorganized thoughts after finishing "Good to Great" by Jim Collins. Here's a great slideshare with the Cliff Notes, though they're not going to mean much unless you've read through the examples.
This book seems to avoid just being a collection of survivor bias stories. Every company they researched had a comparison company from the same industry at the same time that didn't become great. They also had a collection of companies that turned great for a little while, but couldn't keep it up. The book is mostly about what differentiates the long-term great companies from the merely-good-to-terrible ones.
Leadership: it's not about strategy or style. Great leaders tend to be quiet, humble, self-effacing, and yet doggedly persistent and nigh-unstoppable once they've made a decision. They take their time, deliberate, have heated discussions with their trusted advisors & friends, then pursue a path like the Terminator.
The right people. You have to start with the right people. The right people agree with your philosophy, are excited about what they're doing, and have it in their character to do the kind of work they do. Skills can be learned; this is about character traits. Once you have the right people, you have to keep acquiring more of the right people. As soon as you hire the wrong people, you are playing a losing game. No compromises here.
You should never have to motivate your people. They should be intrinsically motivated. Your job is to prevent them from getting de-motivated.
Don't fire someone immediately if they don't seem right - they might just not be in the right position.
The Stockdale paradox: confront the brutal facts. Get unfiltered data. See if what you are doing is working. Maintain unwavering faith that your story ends with triumph; that you retire with your company on top of the world. But at the same time, do not translate this into short-term visions of big growth. If you say "we will be this much better by Christmas" you are setting yourself up for failure.
Find your hedgehog concept. This is something your company does that
- Really taps into the passions of your people
- Drives your economics, however you measure that (revenue per customer, per visit, per sale, etc)
- Is something you could plausibly be the best in the world at
This is the core of your company - make sure you hammer & refine this constantly, and say no to anything that is outside this concept. It could be a product or business: for Walgreens it was "the most convienent drugstores." Or it could be a process: for GE it was "building & training the best executive talent."
The flywheel - momentum is a real thing for groups of people. It's very slow to get going, but once it does, it builds and builds. It helps you attract the right people, build resources, and chase the right initiatives. If you change directions constantly, you are not turning the flywheel - you are not building momentum. If you think some new intitiative or acquisition will motivate people, quickly produce big results, and get that momentum started -- you're wrong. It won't. Momentum builds over time, exclusively.
Your company needs to have some reason for existing beyond making money. It needs to have core values that it holds to; only it doesn't matter what those values are. Phillip Morris has core values and holds to them strongly, even though those values including poisoning millions of people.
Overall summary: This book is great. It contains a lot of lessons we've heard before, but it puts them all together into a coherent structure, and brings in real qualitative data to back them up. It's reinforced a lot of the beliefs I had about running a good company, and I'm hoping that's not just selection bias.