Defining Business Success: Good to Great by Jim Collins - Book Report/Review Example

Defining Business Success Defining what makes a good organization and what allows companies to succeed is one in which many have tried to find formulas and proof for. Within the various divisions of organizations are also defining points which allow organizations to succeed or not to succeed. In “Good to Great”, by Jim Collins, there is the capability to define those points which create an organization's capability to make the leaps that are necessary in order to define their success, stability or failure. In doing so, Collins is able to create an understanding of how an organization's 'mentality' is able to function in order to lead to it's success or to leave it in an area that is comfortable but does not jump over certain barriers in order to create defining points of this success. One of the benefits of “Good to Great” is not only in the data that is included in the book, but also the approach in which Collins takes with the writing of the book. He is able to define the points of what makes an organization work not only through his observations and capabilities, but also through direct studies which he has done over the organization. This provides him with particular insight into a diverse set of organizations. It also gives him the capability to analyze and define through a set of tests and concepts individual components of what allows businesses to succeed or fail. Approaching this from a research perspective, instead of one of theoretical business concepts, allows this book to be set apart from others in how it is able to reach those who are interested in defining the characteristics of business. What Collins is able to present through the creation of this book are practical and real life situations in which businesses can relate to or define what makes them function and keep them at a specific level. The approach in which Collins uses is not only one that he defines through the need to define businesses in a new way, but also because of his background as a business consultant, author and lecturer. This includes his beginnings at Stanford University, in which he worked as a faculty within the graduate school of business, and included his change to a management and research laboratory in Boulder, Colorado. From this educational experience, as well as Collins interactions with businesses, is what has led him to define and re-define what it takes to run an organization, not only through the concept of how a business should run, but also in relation to researching and defining what it means on an every day level to run an organization. This is the fourth of Collins books on this topic, each which provide extra insight into the art of business (Jim Collins, 2007). The main point in which Collins starts with is one in which many businesses have failed to define or allow to lead them into a leading organization. This is what Collins starts with defining as good being the enemy of great. The challenge presented before Collins was to define if a company who was just good at what they should do, with the defining company being Walgreens, where it was able to become a great company, by boosting it's stock numbers and exchanges within the organization. The defining patterns of these organizations were based on the structures and defining points within their company and what had caused them to be at this point. The challenge in which Collins created was one to define the specific elements that linked to an organization, as well as the patterns that were within these key components in defining what made an organization make the single leap into the organizational mindset, allowing them to take the correct movement forward. One of the first observations and analysis that were made from Collins and his research team were examples of leadership in which were defined. Specifically, Collins defined this as Level 5 leadership, meaning that the individuals who were in charge of the operation had specific duties as well as characteristics that set the leaders at a “level 5.” Collins is careful to define what this means not only with personality, but also in relation to the organization and what provides it with better functioning. “A Level 5 individual [is] an individual who blends extreme personal humility with intense professional will. We found leaders of this type to be at the helm of every good to great company during the transition era.... They were self-effacing individuals who displayed the fierce resolve to do whatever needed to be done to make the company great” (Collins, 2001). The definition of this new type of leadership is one that creates a set of personalities that are different from the typical leader that is defined culturally and that creates a personal barrier into success because of ego and the desire to take on all of the responsibilities. Specifically, Collins points out that this personality is not defined by hierarchies or egos that only lead to boosting up prestige in a company. The case studies in which Collins shows Level 5 leadership is one in which provides a different insight and definition to leaders. Not only is this through their characteristics, but also what Collins defines as a leadership hierarchy. When moving from a Level 1 to a Level 5 leader, certain characteristics and leadership lessons become in place and in tact, including the ability to do what is needed within the organization for the benefit of the organization, and to put aside selfish thoughts and ego in order to develop this particular set of rules. This allows for not only more opportunities to be presented within the organization, but also creates an internal environment which can be used in order to present team members with a different attitude towards what is occurring in the organization. Collins not only defines leaders and how their position needs to be, but moves to an even further point in re-defining what it means to have a great organization, specifically according to the other individuals who relate to the business and what they are doing within it. A simple concept which is given by Collins is a defining point to trigger businesses and is one that remains essential for the survival of any business. Specifically, this is defining the positions of all of the individuals who are in the organization. Collins specifically states that the organization will need to ensure that the right people are in the business, which will allow for team support and communication for the business to move forward. “The executives who ignited the transformation from good to great did not first figure out where to drive the bus and then get the people to take it there. No, they first got the right people on the bus (and the wrong people off the bus), and then figured out how to drive it” (Collins, 2001). This being one of the key ingredients of a successful business is one that is often looked over, but also is one that provides a wide variety of examples in how companies can fail or succeed dependent on the individuals who are within the organization. When moving deeper into the concept of who is in the organization and how they function are several characteristics which are brought with the right and wrong individuals in defining how a business fails or succeeds. The first of these is the relationship to management and how this makes a difference in the functioning of the organization. If a leader is not able to do their job as a leader, and in essence, is unable to get the individuals in the organization to remain motivated to do their jobs, the company will be unable to move forward with what needs to be done. The concept of combining team efforts and leadership will not only define the business, but will also define a continuing environment that will either move towards success or failure. With the correct people, changes can easily be made, while the wrong people can cause for a stop in any profits to be made. Collins doesn't just define this as assembling a team, but also states that in order to succeed, the right individuals need to be placed in the organization in the beginning, so as to set a standard and to create an environment in which teams and the concepts of the business can move forward. While the business concept of working within teams and inviting the right individuals to move into the organization remains essential, it is not the only driving force that Collins points out as an easy to understand concept and also a concept which is difficult to implement. One of the key points that any business has to look for, and which Collins is able to analyze, is the weaknesses of an organization. Most organizations, when putting together a strategic analysis or a specific set of key ideals in which to help their organization will have the strengths and weaknesses, as well as how to improve them. However, the organizations in which Collins defines as only good, are also the ones in which to need to re-define what these weaknesses are and to confront them as they come along. Specifically, he states, “The key elements of greatness are deceptively simple and straightforward. The good to great leaders were able to strip away so much noise and clutter and just focus on the few things that would have the greatest impact... And once you have that simple, unifying concept, you will be very close to making a sustained transition to breakthrough results” (Collins, 2001). The concept of being able to take away the bad and focus on what really needs to be done with the organization is one in which many businesses have forgotten and in which Collins has found as one of the defining concepts to lead to success or the inability to step over the bridge into the greater concepts. His specific approach is one that is linked to leaders being able to define and re-define their roles as well as understand what they need to do in order to push the organizations through to the next step. In relation to this, is being able to deal with the hard to make steps, especially as leaders, without letting it stop the focus that is being used. This is an essential point of the book, remaining one of the key elements in how Collins is able to define businesses and their success. Collins specifically points out that the defining of weaknesses shouldn't just be related to the figures, numbers and statements that are occurring, but also should relate to internal evaluations of leaders, team members and the organization's dynamics. Doing this will allow for new concepts to be presented and opportunities within the organization to become present. If the weaknesses remain, they become a block to the organization being able to move forward and attract certain people to being in the organization. The dynamics of teams, leaders and the actions that are taken among individuals continues with Collins defining of the hedgehog concept. The example used during this point is the difference between the hedgehog and a fox. The characteristics of the fox are to continue searching in several places with a multi-minded pursuit of the world. In Collins viewpoint, the foxes are scattered and unable to reach one goal. Hedgehogs, on the other hand, will take the several concepts and consolidate them into one vision which is unified. This means that the hedgehog is able to take the complexities and make them simpler, allowing for a better functioning of any area and for a better energy to be placed within the organization. The importance of focusing on an organization with the characteristics of the hedgehog, in Collins observations, is what separates the companies. Being able to simplify the problems that are presented, as well as the possible solutions creates better attainability towards any type of goal, as well as more insight into what is occurring. “Those who built the good to great companies were, to one degree or another, hedgehogs. They used their hedgehog nature to drive forward what we call hedgehog concepts for their companies. Those who led the comparison companies tended to be foxes, never attaining the clarifying advantage of a hedgehog concept, being instead scattered, diffused and inconsistent” (Collins, 2001). The defining point of any organization, beyond the basics of the individuals who are present, is the capability to create an environment in which there is an understanding and answer to the goals that need to be reached and how to reach these goals. In defining the hedgehog concept, Collins also presents a challenge to businesses to find new ways of organizing the goals and desires in which they wish to reach. By doing this, Collin also provides an opportunity for organizations to move into the concept of not complicating the simpler things in businesses, as well as not creating a clutter of things that need to be done. By doing this, everyone will feel as though they are a part of the process and that there are attainable goals that can be reached. Beyond this, the hedgehog concept allows for strategies to be presented which have shown to propel businesses forward into new territories and into successful business divisions with the simplicity of the ideas in which are presented. Taking out the theoretical concepts, the unattainable goals and the division of the goals that need to be reached is one of the strategical strengths that Collins believes any business can implement to gain strength within their organization. While implementing these various things, other dynamics and environmental concepts will begin to grow within the organization. Collins defines this internal environment as something that needs to be focused on in specific ways. It is up to the leadership roles to define how this will be presented and what will be given to the customers that are a part of the organization. The approach in which Collins presents, beyond finding the right people and simplistic solutions is knowing how to deal with problems. At the center of every organization is a set of problems that will arise. When organizations are unable to cope with these in a manner that is conducive to their business, as well as to those who are seeing the presentation of their business, than it is difficult to find a way to focus on what needs to be done and how to approach the difficulty. One of the problems in which Collins sees is what is referred to as the 'entrepreneurial death spiral.” This is linked to when the problems arise and how they are handled. If it causes complexities to arise and for a change in the environment, than it will not lead to potential solutions or to capabilities within the company in order to thrive, despite the challenges that are offered. The suggestion that Collins makes, as well as the pattern that was seen in the successful businesses, was the different perspective that was taken when seeing a problem within the company. Specifically, the answer to the problem of approaching problems was as simple as creating an area in which those who are in the environment are disciplined in what is being done. “Avoid beurocracy and hierarchy and instead create a culture of discipline. When you put these two complimentary forces together – a culture of discipline with an ethic o f entrepreneurship – you get a magical alchemy of superior performance and sustained results” (Collins, 2001). The main point that Collins focuses on is the need to stop creating a culture that is based on power games and difficulties, and instead, to create one that is inviting to everyone working towards a goal and allows for an environment that remains positive, despite controversies, to keep in tact and in control. This is one that provides more options to those that are putting plans in place and dealing with controversy, not in a way that hinders the organization, but instead allows it to place opportunities in the place of opposition. The concepts in which Collins presents, while being theoretical and based on characteristics and environment, also take a space within the organization through various tools and means that can be provided through those who are presented with leadership positions. This is one that should not only be used within internal environments, but also in providing convenience and advertising concepts to customers who are looking into the store. One of the emphasized points in which Collins suggests is using the means of technology in order to accelerate business. The technology in which Collins uses throughout examples is also one which he creates as an accelerator when businesses are working towards a breakthrough concepts. The main idea of technology is to provide customer satisfaction, without having the responsibility of some of the difficulties that could happen otherwise. Keeping up to date with the concepts and abilities that are available through technology is one that will also allow for a presentation of the business. Not only does Collins emphasize the need to use this technology, but also to use the correct technology. This is one that allows customers to see advancement, care for the customer and an attention to the details of what the customer will feel like they need from the organization. The advantage of this is that it allows for a systematic effort to confront potential problems and to create an environment which is more conducive to what the customer expects as well as needs. Technology as an accelerator then becomes one that is a part of increasing benefits with both the internal and the external environments. The patterns in which Collins presents, move into more detail about the patterns that are seen with both the internal and the external environment. One of the signs which Collins considers significant is the patterns and trends which the company presents, specifically which represents the flywheel and the doom loop. This is important to organizations as it causes for a different understanding of what needs to be done and which cycles are leading them not only to some successes, but to some of the failures that occurs. Collins moves outside of the traditional concepts of the cycles for business and the internal and external environment business cycles and moves into the concept of how the attitudes, insights and reactions to problems cause for either success or failure within an organization. The flywheel in which Collins presents is also known as a wrap around idea. This is one that the company focuses on, but keeps leading back to the same problem or the same solution without moving anywhere. In relation to this, Collins defines the doom loop as the leaders which respond to these problems and the reactions in which they have when the flywheel problems are presented. These two problems, when combined together, start a perpetual cycle that creates a loss within the business as well as the inability to examine where the roots of the problems are in a more simplistic way. When Collins presents this, he also shows that there are some solutions which will allow companies to break these trends and cycles which will eventually allow them to breakthrough the mis-conceptions and the inability to achieve results. The breakthrough point is when the companies can recognize the cycle in which they have created and find an alternate solution that does not lead to the same failure, but instead leads to better results within the organization. Collins main point throughout this book is to define and re-define the various elements that contribute to the success and failure of organizations. With these observations, he allows for a new set of trends with the building of an organization to the representation within the external environment to be available. It is not only through the research and noticed trends within organizations, but also a realistic perspective that creates an understanding of some of the major mistakes and difficulties in which businesses have, as well as some of the ways in which they can break these cycles in order to leap into a new level of their business. The results in which Collin presents through these various changes made within businesses show that with a change in perspective, people and approaches towards the customers who are responding to the company, any organization can lead to it's own new levels of success. Bibliography 1. Collins, James. (2001). “Good to Great: Why Some Companies Make the Leap...and Others Don't.” Harper Collins: New York. 2. Jim Collins. (2007). Jim Collins.com. Retrieved on May 6, 2008 at: http://jimcollins.com/. 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