According to Collins
In his book, Good to Great, Jim Collins gives a detailed comparison between companies that are able to excel continually in their field and companies that are either mediocre or one hit wonders. Through their research his team was able to find distinct characteristics having to do with leadership, planning or purpose, human and technological resources, and discipline that differentiate the great businesses from the ordinary ones. Some of the main ideas that Collins’ focuses on are the Level 5 leader, the Hedgehog Concept and the Culture of Discipline, which all fit together to transform a simply good business into one that has long lasting cumulative returns much higher than that of the market (8). These ideas are what form Collins’ model of management based on their application to planning, organizing, leadership and control, of which many have connection with the theories of previous authors such as Deming, Anderson, and Stack. Like some of these authors, Collins’ model is based on a transformation, however his transformation is not based on a fast acting catalyst, instead it focuses on finding the right product, understanding it, and then building momentum around it that will eventually take the company to the top. Once a company becomes great, Collins’ describes how certain aspects of the company must remain the same, specifically the discipline towards the planned focus of the company, while others, such as strategy and operating practices must adapt to changes (197).
The method that Jim Collin’s and his team of researches used was based on first finding the right companies and then recording not only what they observed but also documents and articles written on the company both externally and internally. However they did not stop there and simply write a book on how these companies did business; they instead found companies within the same industry with the same resources and opportunities, and discovered the differences that allowed one to progress and the other to either remain the same or digress. Through doing this they were able to figure out what any company can do to become successful and remain successful, based on scientific fact and reasoning.
The first thing that the team found was that the greatest businesses that were researched had gained momentum in their industry and increased it over time by having had a great leader pushing the company’s success. Collins’ gives us five different levels of leadership capabilities, the first being a highly capable individual, or someone who is able to contribute his extensive skills and knowledge to the good of the company. The second level leader is a contributing team member that is able to use his own capabilities to form a productive and harmonious team and work environment. The third level leader is a competent manager who is able to organize the company’s resources effectively towards a productive environment. The fourth level leader is...