Let me begin by saying that I am generally speaking a fan of Jim Collins and his work, and that I enjoyed reading Good To Great. I believe there is a plethora of quality information to be gleaned from the pages of Good To Great, but I also believe there are some potentially dangerous and misleading concepts/principles that can cause great harm to a business if taken out of context. Jim Collins and his research staff are truly dedicated and talented professionals who have done volumes of quality research on what it takes to build an enduring and successful enterprise. That being said, the key to understanding, validating and appropriately applying any form of research is to understand the context in which it was developed as well as the business logic that was used to frame it. The problem with Good To Great is that the reader is left with the false impression that the principles contained in the book can be universally transferred to their individual situation without regard for context. The reader is led to believe that if they apply the principles contained in the book to their business that the results will mirror those of the companies examined in the book, and that their business will in turn make the leap from good to great and enjoy sustaining good fortune. This is simply not trueYou see all research, even good research, must be evaluated contextually. There are very few universal truths in business that can be applied in a vacuum. In the text below I will examine what I believe to be three of the most critical flaws in business logic contained in Good To Great: 1. The Study Itself: The study in and of itself has a bias in that it evaluated 22 Fortune 500 Companies. The study compared and contrasted 11 companies that made the transition from good to great and 11 peer companies that did not. The problem with this study is that it applies to a very small universe. How many of you reading this article are currently CEOs of Fortune 500 companies? Fortune 500 companies are mature, well branded, well capitalized, already successful companies. To assume that a start-up, small, mid-size or even relatively large company can adopt the business practices of Fortune 500 companies is just not realistic. Adopting this line of thinking in a vacuum can actually send a company into a death spiral. 2. Level Five Leaders: Jim refers to a hierarchical matrix of leadership that describes 5 different types of leaders and suggests that only with rare exception can anything other than a level 5 leader take a company from good to great. While I agree with many of his suppositions on what makes a great leader, I vehemently disagree that only one leadership style can work effectively. I have personally witnessed just about every style of leader both succeed and fail. While I find some leadership styles more pleasant than others to adopt a one size fits all mentality toward what it takes to lead a company is a huge mistake. It is not the leadership style in a vacuum that is as important as selecting the right leader based upon aligning style with the environmental, situational and contextual circumstances of the time along with the mission at hand. 3. The Flywheel and the Doom Loop: Jims theory here is that those who launch radical change programs and wrenching restructurings will almost certainly fail to make the leap (from good to great). While I am a strong believer in the flywheel principal as a general practice there are also times when radical change is in fact the critical element needed to move a company to the next level of success. It is not change or reengineering that are the evils, rather it is ill-conceived or poorly implemented change that can cause harm. Beware the change agents for the sake of change, but embrace change by design (radical or otherwise) for the good of the enterprise. There are two primary differences between Jims view of the world and mine: 1) Jims conclusions are drawn largely from historical research conducted in the classroom and think-tank and my conclusions are drawn from hands-on, in the trenches experience, and; 2) Jim believes that his data is applicable to virtually any situation in business and I believe everything must be evaluated against the situational, environmental and contextual aspects of any given scenario. Assuming that all formulas are made up of constants without consideration for the inevitable set of variables that always come into play is just not sound thinking. |
