Good to Great, or Just Good

October 22, 2009

This article certainly provides a damning analysis the research and conclusions set forth in Jim Collins’ book, Good to Great. Of course, despite what seem like readily apparent problems with the analysis, the book became a best seller and was apparently widely adopted in boardrooms worldwide. That in and of itself is not really surprising. Many managers and executives are constantly on the hunt for the next big thing in terms of management philosophy, as long as they do not have to come up with it themselves, of course.

What I find most troubling about Collins’ work is that, based on the study in this article, it seems that the firms Collins selected were not really that great to begin with. At least not based on overall shareholder return, which was apparently one of the criteria used to select the firms Collins studied. So basically it seems that he started with a bad sample set and then made the problem worse by applying faulty methodology to his study. And, while I realize that Good to Great was written eight years ago and success or failure can swing wildly in the business world in that time, I still find it ironic that Fannie Mae and the now defunct Circuit City are on the list of “great” companies. I think anyone picking up the book at this point in time would certainly be surprised to see these companies on the “great” list.

Given how influential the book became, I think it would be interesting to take a look at some firms that adopted the five principles that Collins claims would lead to sustained great results and see where they are several years down the line. I would be curious to see what, if any, impact the application of these principles to other companies had, assuming you could establish that it was actually the adoption of this new approach and not some other unique factor within the firm that caused any positive or negative results that may have occurred. While it would be hard to produce any hard and fast conclusions on whether the application of these principles was responsible for the end results, it would still be interesting to see what happened to these companies after they made the big switch. And, for those companies who tried these principles with little to no success, I would also be curious to see what happened to the managers or executives who lead the charge to adopt Collins’ principles.

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