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Timeless “Physics”



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Good to great by Jim Collins

Introduction

What I appreciate about this book is the extensive research conducted to develop the book, with the utilization of many individuals. From the very beginning of the book, it introduces the study of the companies who in fact made the leap from good to great. They discovered a similarity with all the companies who went from good to great. I want to mention the metrics in which were used to conduct the research were based on cumulative stock returns.  So, this describes only metrics based on profitability, which can be debatable whether those metrics can be held alone as what makes a company great. With that said, it was discovered that the principles that make a company go from good to great are, in fact, the timeless “physics” of discipline.

The Research

This book describes in the first chapter how the research was conducted. I think is important considering, the claim being made by the title of the book, it also describes its measurements.

Phase 1: The Search

A six-month long financial analysis looking for companies that showed the following basic pattern: 15 years cumulative stock returns at or below the general stock market, punctuated by a transition point, and then cumulative stock returns three times higher than the general stock market for 15 years.

Phase 2: Compared to What

‘Direct comparison’ – companies were identified based on the same industry, opportunity, and resources at the time of transition, but failed to show no leap from good to great.
‘Unsustained comparisons’ – companies that displayed short good to great traits but couldn’t maintain them.
The main question was what did the good‐to‐great companies share in common that distinguished them from the comparison companies? 
The study resulted in eleven good‐to‐great companies, eleven direct comparison companies, and six unsustained comparison companies.

Phase 3: Inside the Black Box

The analysis of each case was then categorized by strategy, technology, leadership, and so on. The analysis also includes: interviewing executives, acquisitions, business strategy, executive layoffs, financial ratios, and compensation. It was estimated that the analysis consumed 10.5 years of people effort, in an attempt to develop a systematic approach of contrasting the good‐to‐great companies to the comparison.

Phase 4: Chaos to Concept

Developing a framework of concepts. Meeting rigorous standards before deeming it significant. The final framework and concepts are Not the opinions of the research team.

 

Results

The best way to describe the results found in the research for me was found in a diagram within the book, described as a flywheel loop. For every concept described in the loop such as Level 5 leadership, first who…then what, confront the brutal facts, Hedgehog concept, the culture of discipline and Technology Accelerators.

My thoughts

Level 5 Leadership

“You can accomplish anything in life provided that you do not mind who gets the credit” -Harry S. Truman.

This quote really hit home. I would say I would really like to be a great leader, I also have very strong beliefs and would like to be part of changing this world. I can tell you now, getting credit matters to me. I feel disgusting to think about all the time’s I have fought to obtain the credit I “deserve”. Which, in return has been completely holding me back.

Collins describes Level 5 Leadership as an executive described as someone who builds enduring greatness through a paradoxical blend of personal humility and professional will. Which, is built upon the other 4 levels of leadership. When reading through the levels I could honestly assess myself as a level 2, which is described as a contributing team member. I find myself in this place stuck. I do not think it is because I am not capable reaching the other levels of leadership but because of a concept brought up in a later chapter called Hedgehog concept.

The next chapter perfectly describes why I am stuck with why I feel I am where I am. I am very much focused on the what in my life. I could be known as someone who is a jack of all trades. Growing up, I was told by my parents and grandparents to get an education because I don’t want to do physical labor for the rest of my life. When I was younger my perspective of this advice was, “ok” but I hate school. I’m the type of person who cannot sit still. I would describe myself as someone who is never bored, because I’ll find something else to keep me occupied, even in school. I have tried so many things growing up from physical labor work such as plumbing, woodworking, painting, fixing cars, gardening, sports etc. Then after I quit school. It was then I finally began to study and think intellectually. I think this was because I searched for the information and the desire came from within rather than someone telling me to learn and tell what I was to learn. So, in my learning, I responded, I began to write songs, produce music and record etc. Long story short, not so short, I have learned WHAT I like and don’t like and why. It’s important. But to cross into the next levels of leadership I need to focus on the WHO.

First who…then what

 

It’s Interesting because I feel that I have been using my old mechanisms of thinking patterns to develop but I have already chosen my who. This concept I would say this is what I have learned during this spring semester, and have taken it to heart. I was recently married, 5 years ago I met my wife and realized if I wanted to marry I needed to die to my pursuits and choose a “who”. She was the right person, it wasn’t so important what we would do but that we do it together. What I’m trying to say is I’ve been trying to figure out on my own how I will do my what. But I have already known the who is the most important thing.

The Hedgehog Concept

I referred to this concept earlier and mentioned that it was the key for me to enter the next levels of leadership once I have my who is to find the balance between these three things: “What you are deeply passionate about”, “What you can be the best in the world at”, and “What drives your economic engine”. All relating to the organization. I feel that when the platform is presented then I can begin with new levels of leadership.

The rest of the things in this book are deeply valuable resources I will use in the future, but this is what I can use from the book today.

Summary

This book is jam-packed with information to take from not only to improve yourself, or the people around you but the world, rooted in thorough research. Even though the measurement of Good to Great was only sourced from a cumulative stock return, The Principles in which caused the success was the way of doing business. Which describe the company from good to great from the inside out.

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