Good to Great Essay
Among various books written on business topics there are not so many ones that have a long lasting influence on their audiences due to the rapid changes in business environment occurring at an increasing rate.
Moreover rare are books that surprise their experienced readers by presenting well-supported facts that suggest counter-intuitive conclusions. The best-selling book of Jim Collins “Good to Great: Why Some Companies Make the Leap… and Others Don’t” is among such few works that have went beyond most others in the accuracy of their approach and relevance of their topics.
“Good to Great” has achieved a long-term prominent status of a work that has every chance to become a classic one, and therefore deserves the careful attention of companies` leaders and managers of every walk of life. In this light, let us take a closer look at what makes this book stand out, and how ideas that it promotes can be useful for analysis of the current state of the automotive industry.The author of the book has for a long time been interested in research related to formation, development, and functioning of successful companies. On topics related to this field of study Collins has written and co-authored several books, among them the classic “Built to Last”. Since 1995 Collins has been running a management laboratory which undertakes thorough research projects, and his work “Good to Great” is to a large degree a product of such dedicated projects.
Indeed, for this book Collins and his team amassed detailed information about more than 1400 companies, studied thousands of articles reporting about operations of one or another company, and conveyed numerous interviews. What resulted from this was a 300 pages book that aims to give a detailed and persuasive answer to a question of whether a good company can become a great one, and what is the path to greatness. Jim Collins opens his work with a provoking observation: “Good is the enemy of great” (Collins, 1999, p.2). Indeed, for many of us and for many businesses the good performance is paradoxically among the most significant obstacles to great performance, perhaps due to the subconscious lack of motivation to try even harder. Collins confirms this danger stemming from our competence of which we are aware and which we think is already sufficient by saying: “The vast majority of companies never become great, precisely because the vast majority become quite good” (Collins, 1999, p.
2).This observation of the author makes him very interested in the phenomenon, not surprisingly a quite rare one, when certain companies that seem to have lacked any pre-existing signs of greatness nevertheless quickly and almost miraculously become great. On the basis of the extensive research Collins and his colleagues singled out 11 public companies for which comparative information was available and which manifested clear indications of unusually successful growth in contrast to companies similar to them. The choice of companies was made after adequate correlation of data and after making sure that general tendencies within their respective industries were not influencing their performances and that a luck factor was definitely ruled out. With the chosen companies at hand, Collins and his research colleagues undertook the analysis of the transition points of those enterprises that brought them to their great economic characteristics.The aim of this stage of investigation was to find out what did those companies have that their competitors did not, and what practices and approaches did those successful companies decide to drop. As the result of such a specifically oriented investigation some common features had been found that lead to unexpected conclusions. To organize the book in a clear and coherent manner, for every of important conclusions Collins devotes a chapter.
One of the most counter-intuitive results is the fact that the typical profile of leaders who enabled good companies to become great presupposed a person who instead of publicity, excessive preoccupation with his or her personal image, and adoption of the role of a company savior was instead in most cases a company insider who was the incarnation of a strong bond between personal humility and professional will. As a consequence of that, such leaders were more interested in solid results that could be created by them instead of mostly worrying about their personal power and fortune. Collins concludes that to a large degree it is this quality of companies` leaders that enables them to concentrate on propelling their companies towards long-lasting success.Another important conclusion of the author is related to the need to remove weak people from the team and increase the amount of highly performing staff, thus exchanging an approach based on a great deal of effort for a corporate culture of top talent.
In this way, Collins modifies the famous principle that people are the most crucial business asset into the maxim that these are the right people who are the ultimate business asset, and that it is necessary to firstly procure that the right people are in the team and afterwards define the course of development in accordance with their capabilities.With the good team assembled the good-to-great companies, as revealed by the authors, took pains to devote their attention to realistic evaluation of the hardest facts about different aspects of companies` operations. This analysis is warranted because only after an objective evaluation it is possible to determine the key competencies offering the greatest potential for a company. On ground of such an evaluation the successful companies developed a clear concept that would be constantly highlighted in the future to help focus on improving performance and to maintain the improvement.
In fact, it is this stage, which Collins calls “The Hedgehog Concept”, that made it possible for the 11 good companies to drop their self-confidence in the sufficient level of competence and to go beyond their good performance to achieve really great results. Now, to preserve the positive dynamics for a long time another principle was used by good-to-great companies. It was the establishment and maintenance of a discipline-based corporate culture in which commitments are central, but which nevertheless preserves freedom in relation to the ways of fulfilling of obligations.In relation to such an important nowadays aspect of business development as technology, Collins makes a very relevant remark which adds another element to our understanding of the roots of success of the selected great companies. The author points out that those companies were employing technology in a purpose-specific way, when technology was in a complete accordance with the concept of the development of a company. In this manner, technology was used to its full potential to speed up progress and to bring a company closer to what it was aiming to become.On ground of all the above-mentioned elements of companies` policies, the author decides that it was their combination that gave the impetus for rapid growth, and that after the momentum was built these were the continuing attempts to cling to the original concept of a company development plus encouraging signs of ensuing success that perpetuated the long-term excellence.
On the contrary, companies that opted for radical structural changes in the process of their development were almost doomed to fail on their path to great performance.As we can see, while the book “Good to Great” confirms some facts that one could expect from it, it in many instances also defies some elements of popular modern business thinking. This fact alone makes this work worthy of attention from the side of various audiences, from CEOs to managers and to business professors.
After all, one of the conclusions of the book is that these are talented people of all levels that participate in the uprise a company. Besides, the combination of technical elements in the end of the book that describe the process of its writing and of ready conclusions and easy language in its main body makes this volume interesting for people with different analytical skills.With all this said, we can see how some of the ideas and themes contained in the book apply to the automotive industry. Today the state of the U.S. automotive industry is such that the traditionally largest domestic players represented by Ford, General Motors, and Chrysler, also called the Big Three, have lost their dominant positions in most market shares. This happened due to the significant changes in the automotive industry as foreign-owned companies, especially Japanese ones, had established strong positions on the American market, with their U.
S. plants employing around one-quarter of American workers in automotive industry. Chrysler has even become a subsidiary of the German company DaimlerChrysler. At the same time, changes in the global industry brought about by globalization, the growing U.S. automotive trade deficit, growing pension and health care costs, and the challenges arising from issues revolving around environmental protection and fuel economy all have conspired to reduce profits and prospects of future demand for the market leaders, particularly for Ford and GM. And even though since 2000 sales were at a high level, the practice of the use of incentives bodes ill for future earnings (Cooney and Yacobucci, 2005).This situation within the automotive industry demands adequate reaction from the side of American manufacturers to preserve their positions, and moreover to reinforce them.
In this regard, while none of the 11 companies studied by Jim Collins is directly involved into the automotive business, the observation of Collins that a company can become great by finding a market segment that it can be the best in and by sticking to this market segment can be really relevant for the modern automotive industry. Indeed, for example even despite competition from the side of foreign companies the Big Three continue to be leaders in production of light trucks, a segment which has long been strongly associated with their brands, and in which they act as good companies.However, along with the increased attempts to regain lost market shares for their other vehicles, light trucks should not be deprived of the high priority in each of the Big Three companies as this division with all its potential is yet perhaps only good, and with added efforts applied in accordance with the principles advanced in the book “Good to Great” it can become great.
Of course, the modern automotive industry is very diversified, and the usefulness of the Collins` book is not limited only one of its themes. After all, any company consists of people, has its leaders, and struggles to establish a positive corporate culture and use technology in the most effective way. Therefore, the book “Good to Great” can be applicable to its full extent for those involved in the automotive industry.
SourcesCollins, J. (1999). Good to Great: Why Some Companies Make the Leap..
. and Others Don’t.HarperCollins Publishers Inc.Cooney, S., and Yacobucci, B. D.
(2005). U.S. Automotive Industry: Policy Overview andRecent History. Retrieved March 09, 2006, from http://www.cnie.org/NLE/CRSreports/05apr/RL32883.pdf.