Click the button to start reading
Exploring the Principles of “Good to Great” by John Collins – Chapter 6
One of the most compelling aspects of Good to Great is its focus on disciplined people, disciplined thought, and disciplined action. These three components are the pillars that hold up a great company, according to Jim Collins.
The companies that made the leap from good to great were those that had leaders who were not just ambitious for themselves but were driven by a deep desire to make their companies successful.
These leaders, whom Collins refers to as “Level 5 leaders,” combined personal humility with professional will, setting their companies on the path to greatness.
These Level 5 leaders are at the core of what differentiates a good company from a great one.
They are not the celebrity CEOs who make headlines, but rather the quiet, determined leaders who focus on building something that lasts. Their ambition is first and foremost for the company and its success, not for their personal gain or fame.
This humility combined with an unwavering commitment to the organization is a recurring theme throughout Good to Great.
A Culture of Discipline: The Backbone of Great Companies
In Chapter 6, Collins delves into the importance of cultivating a culture of discipline within an organization.
This doesn’t mean implementing strict rules or micromanaging employees. Instead, it’s about creating an environment where disciplined action becomes second nature.
In these companies, every team member understands the company’s goals and their role in achieving them. There is a freedom to innovate within the bounds of the company’s core values and objectives.
This culture of discipline is one of the key differences between companies that are merely good and those that become truly great.
For instance, companies like Kimberly-Clark made bold decisions, such as completely exiting the paper business, to focus on consumer products.
This move required not just strategic insight, but also the discipline to stick with a decision that may have seemed risky at the time but was necessary for long-term success.
Another crucial element of discipline is knowing when to say no. Collins emphasizes the importance of a “stop doing” list, which is just as vital as a to-do list.
In the pursuit of greatness, these companies recognized that not all opportunities are worth pursuing. They understood the power of focus and the dangers of spreading themselves too thin.
By eliminating activities that did not align with their long-term goals, these companies could channel their resources and energy where they would have the most impact.
The Hedgehog Concept: Simplicity and Focus
One of the most powerful concepts in Good to Great is the Hedgehog Concept.
This idea, borrowed from an ancient Greek parable, is about focusing on one big thing—your Hedgehog—rather than trying to do everything.
Collins explains that great companies find the intersection of three key areas: what they can be the best in the world at, what drives their economic engine, and what they are deeply passionate about. This intersection is their Hedgehog Concept, and they pursue it with relentless focus.
Take the example of Nucor, a steel company that rose to greatness by focusing on producing low-cost steel.
Nucor didn’t try to be all things to all customers. Instead, it honed in on its Hedgehog Concept—harnessing technology and culture to produce steel more efficiently than anyone else.
This clarity of focus allowed Nucor to outpace much larger and more established competitors, ultimately becoming one of the most successful steel companies in the world.
Collins argues that the Hedgehog Concept is not just about finding what you are good at, but about disciplined execution.
Companies that achieve greatness understand their Hedgehog Concept and commit to it fully, saying no to anything that does not fit within those three circles.
This focus prevents them from being distracted by short-term opportunities that could derail their long-term success.
Budgeting as a Strategic Tool
Budgeting in most companies is about allocating resources to different departments or projects based on immediate needs.
However, in Good to Great, Collins redefines budgeting as a strategic tool for discipline. He argues that the most successful companies use budgeting not just to manage costs, but to ensure that resources are fully aligned with their Hedgehog Concept.
In other words, budgeting becomes a way to enforce discipline by fully funding what is critical and eliminating what is not.
This disciplined approach to budgeting is evident in how Kimberly-Clark handled its transition from the paper business to consumer products.
The company didn’t just reduce its investment in paper; it completely exited the industry, selling off its paper mills and investing all its resources into the consumer side of the business. This bold move required not just strategic vision but the discipline to follow through and fully commit to the new direction.
This approach to budgeting is a powerful example of how companies can use discipline to drive growth.
Rather than spreading resources thinly across multiple areas, great companies focus their investments on the areas that will deliver the most significant returns.
By doing so, they maximize their impact and ensure that every dollar spent is a step towards achieving their long-term goals.
The Role of Teamly in Modern Business
In the fast-paced and ever-evolving world of business, tools like Teamly can play a crucial role in helping companies maintain the kind of discipline that Collins describes in Good to Great.
Teamly’s software is designed to streamline operations and keep teams focused on what truly matters. By providing a platform where goals are clear, progress is tracked, and communication is seamless, Teamly helps organizations stay aligned with their Hedgehog Concept.
Whether you’re a small business looking to grow or a larger company striving to maintain your edge, integrating a tool like Teamly into your operations can make a significant difference.
It’s about creating an environment where discipline becomes part of the culture, helping your team stay focused on the activities that will drive long-term success.
Jim Collins’ Good to Great offers invaluable insights for anyone serious about taking their company to the next level.
The lessons on disciplined people, disciplined thought, and disciplined action are timeless and applicable across industries.
Whether you’re a CEO, a manager, or an employee looking to contribute to your company’s success, the principles in this book can help you understand what it takes to go from being good to being great.
If you’re ready to dive deeper into these concepts and apply them to your business, get your copy of Good to Great here.
