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Exploring the Principles of “Good to Great” by John Collins – Chapter 3
When it comes to transforming an ordinary company into a great one, Jim Collins’ book Good to Great is an absolute must-read.
Collins and his research team spent years studying companies that successfully made the leap from being good to truly great, and the lessons they uncovered are invaluable.
The book provides a roadmap for achieving sustained success, focusing on the importance of leadership, discipline, and most importantly, people.
Below, you’ll find some key takeaways from Chapter 3 of the book, which is all about getting the right people on the bus before anything else.
It’s All About the People
One of the most significant lessons from Good to Great is that people are the foundation of greatness.
Collins emphasizes that great companies are built not by a single genius but by a team of talented individuals who work together toward a common goal.
It’s not enough to simply have smart people on your team—you need the right people.
The good-to-great companies that Collins studied began their transformations by focusing on getting the right people on the bus and removing the wrong people.
They didn’t waste time figuring out where to drive the bus until they were sure they had the right team on board. This “who” before “what” philosophy is a crucial part of achieving sustained success.
The Danger of the “Genius with a Thousand Helpers” Model
Many companies fall into the trap of relying on a single genius leader surrounded by helpers.
While this can lead to short-term success, it often falls apart when the genius departs. Collins calls this the “genius with a thousand helpers” model, and it’s a recipe for failure in the long run.
In contrast, great companies build deep, strong executive teams that don’t rely on any one person.
Leaders in these companies focus on assembling a superior management team and making sure that the team can function effectively even when the leader is no longer present. This approach ensures that the company can sustain greatness over time.
First Who, Then What
The good-to-great companies consistently applied a disciplined approach to getting the right people on the bus before deciding on the company’s direction.
They focused on making rigorous selections from the beginning.
This strategy ensured that when it came time to make significant decisions, they had a team of people who were not only capable but also aligned with the company’s values and mission.
In fact, one of the key disciplines Collins outlines is to avoid hiring until you’re sure you’ve found the right person. It’s better to keep looking than to settle for someone who isn’t a perfect fit.
This is particularly relevant when companies are experiencing rapid growth. It’s essential to maintain the right balance between hiring quickly to meet demands and ensuring that each hire is a strong, long-term fit for the company’s culture and goals.
Rigorous, Not Ruthless
One of the common misconceptions about great companies is that they have to be ruthless to succeed.
However, Collins’ research shows that great companies are not ruthless—they’re rigorous. This means they apply consistent, high standards at all times and across all levels of the organization.
A great example of this is how Wells Fargo handled its acquisition of Crocker Bank. Rather than trying to integrate all of Crocker’s management into Wells Fargo’s culture, they quickly made the decision to let go of those who didn’t fit.
While this may seem harsh, it was actually an act of kindness in the long run—both for the company and for the individuals involved. Wells Fargo wasn’t interested in making slow, painful cuts; they were rigorous in ensuring that only the right people stayed on board.
Practical Disciplines for Greatness
Collins identifies three practical disciplines that are crucial for ensuring the right people are in the right roles:
- When in doubt, don’t hire—keep looking. This is all about maintaining a high bar for talent and not compromising when it comes to bringing someone new onto the team.
- When you know you need to make a people change, act. Holding onto the wrong person for too long can be a drain on the entire organization. If you know someone isn’t a good fit, it’s essential to make the change sooner rather than later.
- Put your best people on your biggest opportunities, not your biggest problems. This principle is about leveraging your top talent where they can have the most impact, rather than using them to put out fires. This ensures that the company is always moving forward, rather than just staying afloat.
These disciplines highlight the importance of being deliberate and thoughtful in how you build and maintain your team. The focus is on ensuring that every person in the organization is in the right role, contributing to the company’s success in meaningful ways.
Unexpected Findings
Collins’ research also uncovered some surprising insights. For example, there was no systematic pattern linking executive compensation to a company’s shift from good to great.
Many companies assume that high salaries and bonuses are necessary to motivate top performance, but Collins found that it’s more important to have the right people in place from the start.
Compensation should be designed to attract and retain the right talent, rather than simply to incentivize certain behaviors.
Additionally, the old adage that “people are your most important asset” was challenged.
Instead, it’s the right people who are your most important asset.
Whether someone is the right person has more to do with their character and innate abilities than their specific knowledge or skills.
If you’re looking for a blueprint on how to build a great company, Good to Great is a fantastic resource. The book is filled with actionable insights and real-world examples of companies that successfully made the leap to greatness.
You can grab your copy on Amazon here.
