Collins' Good To Great
In 1996 Jim Collins asked the question, "Can a good company become a great company and if so, how?" (Collins, p195) Collins and a dedicated band of 22 researchers set out to discover what transforms good companies into truly great companies. Their criteria for greatness was tough: The researchers sought companies that had underperformed the general stock market for at least 15 years, then went through a transition, and subsequently outperformed the general stock market by at least three times for the next 15 years.
Starting with 1,435 companies that appeared on the Fortune 500 list from 1965 to 1995, the researchers eventually identified only 11 that made the cut. The companies that were selected were Abbott Laboratories, Circuit City, Federal Home Loan Mortgage, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and Wells Fargo.
Although there are other factors involved for taking a company from good to great', what these great companies turned out to have in common was a particular kind of leader during the transition period, but it wasn't a headline-grabber like Chrysler's Lee Iacocca or GE's Jack Welch. On the contrary, the leaders of the long-term success stories were people like Kimberly-Clark's Darwin Smith. Called Level 5 leaders, these top executives "possess a paradoxical mixture of personal humility and professional will" (Collins, p195).
In Good to Great Collins classifies leaders into five levels. A level 1 leader is a highly capable individual. He plays an important role in the success of his organization through his own talent, knowledge, skills, and good work habits. A level 2 leader is a contributing team member. He is very good at working with his team members and ensures that his team meets its assigned objectives, and fulfills the core purpose. A Level 3 leader is a competent manager. He is skilled at organizing people and resources towards the effective pursuit of company objectives. A Level 4 leader is an effective leader. He sets high level performance standards. He is remarkable at motivating his people and leading them single-mindedly towards realizing his vision for the organization. A Level 5 leader transforms the organization into a great institution. As mentioned earlier, he epitomizes personal humility and professional will. Leaders do not need to work sequentially through each level to reach the top, but each higher level requires the capabilities of all the lower levels.
Executive A can be described as having a “Level 5” leadership style. Shying away from attention and giving credit to others shows “greatness through a paradoxical combination of personal humility plus professional will.” (Collins, 2005) Accepting responsibility for mistakes and poor results, along with having pride in developing strong leaders, further supports the definition and actions of a “Level 5” leader. The scenario describes the will of Executive A is described as driven, ambitious and focused on the success of the company. With the scenario information this is a full description of the “Level 5” type leader.
“People always overestimate how complex business is. This isn’t rocket science. We’ve chosen one of the world’s most simple professions.” In Jack Welch’s words, business is simple. A leader needs to supply his employees with the information, the resources, the vision, and the atmosphere to succeed and reward them when they do. Welch does not concern himself with the details of GE’s many business units; he only needs to ma...
The book begins with Collins describing the research that he and his team performed in order to write this book. The main factor of the selection process was the “period of growth” and if these companies were able to maintain monetary success over a long period of time (Collins, 2001). Once the selection process had been completed, the organizations that were selected for continuation in this process included but is not limited to: Walgreens, Wells Fargo, Gillette, Fannie Mae, and Nucor.
Good to Great by Jim Collins is a book which illustrates an answer for the question whether a good company can turn into a great company. In this book, Jim Collins suggests the ways by which companies can outperform the market leaders. The author has certain list of companies like Abbot lab, Circuit city, Fannie Mae,Gillette,Kimberly Clarak,Kroger,Nucor steel, Philip Morris,Pitney Bowes,Walgreens and Wells Fargo. According to author good is the enemy of great and thatis why have little companies which are great. The author says that the transformation from good to great does no just happen. It needs to be built through process which with three broad stages. Jim Collins suggest some components in a company to have it achieve great levels
One may wonder exactly what it is that qualities a strong leader possesses. A strong leader is determined, and strong willed. They must be of good judgment, and without bias. They cannot easily be persuaded, and they are firm, yet at the same time, a good lead must also empathize with his subordinates, and have the best interest at heart for said subordinates, at all times. However, with that being said, a good leader cannot be afraid to discipline his subordinates when necessary. Unmistakably, being a leader is a very difficult feat – one which not everyone can accomplish. A leader must be an authority, a friend and a counsellor, all at once. They must be responsible, and always take into account the disadvantages of a situation. Not everyone is suitable to be a leader, whereas, just about anybody can be a good role model.
Good to Great: Responding to Change. I think that Jim Collins' book is essential for future entrepreneurs, managers, and leaders in the Philippines. The tips given by the author are useful in the dynamic, ever-changing, and constantly fluctuating business environment of the Philippines. Jim Collins described the kind of leader who can address these changes as a Level 5 leader "a paradoxical blend of personal humility and professional will." The Level 5 leader is not the "corporate savior" or "turnaround expert". Most of the CEOs of the Good To Great companies as they made the transition were company insiders. They were more concerned about what they could "build, create and contribute" than what they could "get - fame, fortune, adulation, power, whatever". No Ken Lay of Enron or Carly Fiorina of HP, the larger-than-life CEO, led a Good To Great company. This kind of executive is "concerned more with their own reputation for personal greatness" than they are with "setting the company up for success in the next generation". Transformations from Good to Great start when a company finds a CEO who is humble but iron-willed, and who is ambitious for the company, not necessarily for himself or herself.
Although there are many outstanding, albeit necessary qualities of a good leader, it is the leader’s beliefs in which greatness is given its first breath, fostered by action, and spread throughout the institution. A great leader believes in encouraging, not destroying; in setting the precedence instead of yielding to prominence ; in collaboration, not division; in giving, not taking; and in having high standards and volunteering to be the first of many to be held to them. A great leader does not take advantage of the people being lead, but instead, creates an advantage for the people by giving them the opportunities to lead. Only when people take ownership of an institution will passion be cultivated, action be taken, and greatness be achieved.
To transform a good company to great company is all manages’ dream, but only few of them make it. To find out the core factors which lead to a good company became a great company is very difficult, because in different era, different industry companies face different opportunities and threats. To begin the research for the Good-to-Great study, Jim Collins and his research team searched for companies that: performed at or below the general stock market for at least fifteen years; then at a transition point began to pull away from the competition, and sustained returns of at least 3 times the general market for the next fifteen years. He started with a list of 1,435 companies and found eleven that met his criteria. These eleven companies produced, on average, a return of 6.9 times the general stock market during the 15 years following the transition points. Collins chose a 15-year span to avoid "one-hit wonders" and lucky breaks. In the book, Collins highlights some important factors which are the result of the research. They are level 5 leadership, fist who … then what, confront the brutal facts, the hedgehog concept, culture of discipline, and technology accelerators, (Collins, 2001, p.12).
It's interesting to read about the great leaders discussed in this book and that they are very different from what most people think. Many great leaders are quiet, shy, reserved, and modest. I had never heard of any of the good to great CEO's that Jim Collins talks about in this book. It's too bad they weren't more well known which might have influenced other CEO's to follow some of their methods and ideas to transform more companies to great.
...r whole effort into it and they give above and beyond because they want the result to be good for results matter. The leader generates work that meet commitment and generate results that surpass and go above and beyond the normal requirement (Lord & Maher, 1991).
Many Scholars characterize the core qualities and skills necessary for an effective leader. Useem defines leadership as “Creating a vision and translating that vision into actions”. Historically, an effective leader was assumed to be exceptionally knowledgeable, authoritative, and dominate. Those leaders applied the command and control method to lead an organization. With the passage of time, this definition has been changed. The modern definition of an effective leader is honest, courageous, trustworthy, inspirational, and result-oriented. Today’s leaders create shared values and vision, and empower others to achieve their targets.
There are many different ideas about what it means to be a good leader and what the leadership means. In a simple explanation, leadership is a technique that an individual influence a group of people to achieve a common goal. A good leader can be a supervisor, manager or a business owner. Leaders are people who have expertise in achieving goals, no matter what their job titles are. Leadership is about coping with change. In a modern age we live, especially in the twentieth century, “more companies are looking for people with great leadership skills” because they can solve problems (2015, P. 13). In my idea a good leader has a vision and motivation to a team so that they can work together toward achieving
A Level 5 CEO is the greatest leadership level. It is destined to build enduring business greatness through a combination of personal humility and professional will. There are many steps that someone needs to walk through until he or she reaches this level of leadership. The journey to Level 5 business leadership can be accelerated by mastering ones emotional intelligence. Emotional Intelligence consists of four parts: self-awareness, self-management, social awareness, and relationship management. Any CEO in progress must make sure that he has been practicing these concepts on a daily basis.
Peters, T. J. & Waterman, R. H. (1982). In Search of Excellence: Lessons from America’s Best-Run Companies. New York: Harper &
A leader accomplishes this level when they have performed consistently, obtaining desired results, for an extended period. People hold the leader in high regard and defer their ultimate respect for the leader. This level is difficult to accomplish and Maxwell, (2013) reminds us that most leaders rarely accomplish this level. Holst, (1999) describes this stage of leadership, saying this is a leader who has enhanced their spiritual, physical, mental and moral faculties to their highest degree possible resulting in the development of integrity (p.