The Seven Principles of Good to Great

The book “Good to Great” by Jim Collins is technically a business book, but many of its findings apply to individuals as well. The seven principles discovered by Collins’s study in almost all companies that went from good to great, and conversely not found in the comparison companies that never became great or became great only to fall back into mediocrity, are something I keep coming back to.

Humility and Resolve

The great companies in the study all had leaders with characteristics described as “level 5 leadership”. They were humble, attributing success to luck or their teams, but accepting responsibility for failures. At the same time they were resolved to do whatever was needed to become great.

Selectivity and Flexibility

Great companies “get the right people on the bus, in the right seats”. They hire the best people, then figure out what to do with them (and with the company). People who don’t fit are helped to leave, but those who are simply in the wrong position are moved to a better place.

Realism and Optimism

Great companies “confront the brutal facts, but never give up hope”. Despite striving for unbiased understanding of their realities, they never stop believing that they can be great. Collins calls this principle the Stockdale Paradox, after Admiral Jim Stockdale, who was captured in the Vietnam war.

Simplicity and Purpose

Great companies determine their “hedgehog concept”, the simple principle at the intersection of what they love to do, what they can become the best in the world at, and what can make them money. For an individual, this is the equivalent of finding one’s calling. The name hedgehog concept is based on the parable of the fox and the hedgehog, where the fox has a hundred schemes, but the hedgehog has one: roll into a ball.

Discipline and Measurement

Great companies stay disciplined in pursuing their goal. They find simple insightful measurements (or metrics) that capture their progress in a way that, if optimized, leads to great results.

Purposeful Technology

Great companies take advantage of technology, but only to accelerate the achievement of their purpose. Technology is never embraced for technology’s sake, and technologies that don’t contribute to the company’s purpose are ignored.

Continuous Improvement

Great companies build momentum incrementally rather than looking for “big wins”. The Japanese have a word for this: “Kaizen”. Collins draws the analogy to a flywheel that is slowly brought up to speed by a series of small pushes. The comparison companies tended to lurch from strategy to strategy.