Good is the enemy of great.

Hey there👋

Jim Collins and his team spent five years (yeah, that's a lot of time) trying to figure out how some companies go from being just good to being, great. And guess what? They've cracked the code! 🚀 Learn what it takes to go from Good to Great!

I've broken down the main points of the first two chapters for you, so get ready for a quick and engaging read (about 5 minutes, give or take 😉). Here's what we'll cover:

• Introduction to the whole good-to-great concept

• Surprising things they didn't find in great companies

• Level 5 Leadership: Humble yet fearless leaders who made a difference

Ready to dive in and find out what it takes for a company to become truly great? Let's go! 🌟

Good is the enemy of great

Jim and his team put together a chart (which you should totally check out), showing how they compared companies that made the leap to greatness and sustained it for at least 15 years with other companies that didn't. The results were astonishing! The companies that made the leap had stock returns almost 7 times higher than the market average, while even the impressive General Electric only managed 2.8 times during a 15-year period. A ton of work went into identifying the the 11 companies. I won’t go into the details but it was rigorous.

What's even more surprising is that these fantastic results came from companies that used to be, well, pretty average. Take Walgreens, for example. For over 40 years, it was just an ordinary company. But then, in 1975, it suddenly took off and kept going up, up, and away! By January 1, 2000, $1 invested in Walgreens would have outperformed Intel, General Electric, Coca-Cola, and the general stock market by a huge margin.

So, how did Walgreens go from being nothing special to outperforming some of the world's best companies? And why didn't other companies in the same industry, like Eckerd, do the same? Well, that's what Collins' quest was all about.

Jim Collins' book isn't just about Walgreens or any specific company. It's about figuring out if a good company can become a great company, and if so, how. He found some truly eye-opening insights, and he believes that almost any organization can improve its performance and even become great if it applies the ideas he and his team discovered.

When they peeked inside the black box of good-to-great companies, they were often surprised by what they didn't see. For example:

• Big-shot celebrity leaders from outside the company didn't help it go from good to great. In fact, 10 of the 11 good-to-great CEOs were from inside the company, while the other companies tried outside CEOs way more often.

• There was no clear pattern connecting executive pay to the process of going from good to great. So, the idea that how much executives get paid drives corporate performance? Not backed up by the data.

• Strategy alone didn't separate the good-to-great companies from the others. Both groups had solid strategies, and there's no evidence that the good-to-great companies spent more time on long-range planning.

• The good-to-great companies didn't just focus on what to do to become great; they also looked at what not to do and what to stop doing.

• Technology and tech-driven changes didn't really have anything to do with starting the transformation from good to great. Sure, tech can speed things up, but it can't cause the transformation itself.

• Mergers and acquisitions didn't play a big role in making a company go from good to great. Turns out, two mediocre companies joining forces don't magically create one great company.

• The good-to-great companies didn't worry too much about managing change, motivating people, or creating alignment. When the right conditions were in place, those problems pretty much took care of themselves.

• There was no catchy name, tag line, event, or program to mark the transformations in the good-to-great companies. Some of them didn't even realize how huge the transformation was at the time; it only became clear later. They got amazing results, but not through some wild, revolutionary process.

• The good-to-great companies weren't all in fantastic industries. Some were in pretty awful ones. None of them just happened to be in the right place at the right time. Greatness isn't about circumstances. It turns out, greatness is mostly about making conscious choices.

Level 5 Leadership

So, back in '71, this regular guy named Darwin Smith became the head honcho of Kimberly-Clark, which was like this old, boring paper company that was doing pretty bad compared to others. Smith, who was a quiet lawyer working for the company, wasn't even sure if he was the right fit for the job. But despite his doubts, he stuck with it for 20 years.

And man, those 20 years were wild. Smith turned the company into a major player in the paper-based consumer products game. Kimberly-Clark's stocks went through the roof, beating out other big companies like Coca-Cola and GE. Pretty impressive, right? But not many people know about Smith 'cause he was super low-key and didn't care about being famous or anything.

Now, don't go thinking Smith was a pushover or something. He might've been shy and humble, but the dude was tough as nails. He worked his butt off to get through college and law school, even after losing part of his finger in an accident. And when he found out he had cancer a couple of months after becoming CEO, he didn't let that stop him either.

Smith was determined to turn Kimberly-Clark around, and he did that by making a huge decision to sell off their mills and go all-in on consumer products, like Huggies and Kleenex. People thought it was a dumb move, but Smith proved them wrong big time. In the end, he said it was all about never giving up on trying to be the best he could be for the job.

Darwin Smith is a perfect example of what's called a "Level 5 leader" – someone who's super humble but also has this crazy strong drive to make their company amazing. These kinds of leaders put the company first and themselves second. They're like a mix of being really modest but also fearless.

Think of someone like Abraham Lincoln, who was humble but wouldn't back down when it came to what was best for the country. The CEOs of these great companies were a lot like that, too – like Colman Mockler from Gillette, who fought off hostile takeovers to keep the company on track for greatness, even if it meant missing out on some quick cash.

So, the takeaway here is that having a Level 5 leader is super important when it comes to taking a company from good to great. It's not about having some flashy, larger-than-life personality. It's about being humble, fearless, and putting the company first. That's what really makes a difference.