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This book, IMO, did for me the same as Rich Dad, Poor Dad and Michael Gerber's E-Myth series of books. Based on a very detailed and long research project done at the Stanford School of Business, it basically is about how to turn a mediocre institution into a great institution. It is actually a prequel book, in that it was written after Built to Last, which focuses on how great institutions were built and how to keep them that way, also off of a huge research project. But many of the readers said to Collins, "Built to Last is great, but the only problem is that it talks about how great institutions have been built from the ground up. What about all the good, but not great, institutions out there? Are they doomed to stay mediocre, or can they be made great? Thus Good to Great was born.
It is very difficult to talk about the points made by the book, as it is detailed, but basically it makes the key point that the notion that great companies require these great, hard-charging, charismatic CEOs is not necessarily true. For example you often here about a company wanting to bring in an outside CEO who is like a celebrity-type to "shake things up." The CEO and management do need to be very ambitious and hard-working, but the difference is that the very charismatic CEOs usually do not build a great institution. What they do is lead a mediocre institution while being great leaders. Once they leave, the business goes south. A lot of times, this is also ego, to "prove" how great a leader they were. If they build a great institution that is great when they leave, and then becomes greater and greater as their successors built on what they did, well that plays on the ego of some.
Lee Iacocca of Chrysler is an example of a great leader of a lousy instititution. Iacocca is very, very egotistical/ego-driven, for example, when he turned Chrysler around, he appeared on every talk show he could. He did so much public appearances that his attention at Chrysler began to wane, and as it did, so did the company. He was a great leader, but never built Chrysler to be a great institution. When he paid attention, Chrysler did well. When he stopped paying attention, it went south, and when he left Chrysler, the company has struggled since. Now Cerberus Capital Management owns it, hopefully they can build it to be a great institution.
Steve Jobs with Apple is another one. Apple was a great company with Jobs around, but when he left, and a management team took over, the company went south. Apple was a lousy institution with a great, visionary leader. When Jobs came back, Apple made a great turnaround. However, if Jobs isn't aware of what I'm writing here, then when he leaves, Apple will likely go south again, unless Jobs has a successor very much like him.
Jobs needs to focus on, rather than being a visionary leader of Apple, of literally turning Apple into a visionary company, one that will be embodied with his visionary spirit long after he's gone, so that it will continue to become greater and greater.
Much of the book details about how to turn a sub-par institution into a great institution. It talks about how things like, for example, mergers and acquisitions are mis-used by companies. Many companies try to use mergers and acquisitions as a way to "turn a company around," whereas the truly "good to great" companies rather worked to turn their company around and used mergers/acquisitions to enhance the process, not to get it going.
Another point made was that all the good-to-great companies made sure to always get the right people on board. If the wrong people were on board (for example through nepotism), they were fired. The businesses could not begin the turnaround process until they got the right people on.
Built to Last is next on my list, and is about how, after taking a company from "good to great," how to make it an enduring great institution.
IMO, a good entrepreneur's list of reading should be:
MJ's "Do You Have a Successful Entrepeneurial Premise?" article
followed by reading
Michael Gerber's The E-Myth Revisited and The E-Myth Mastery
followed by reading
Good to Great and I am going to guess Built to Last is just as good. Built to Last was written first, but actually Good to Great is what should be read first.
MJ's shows how to go about starting the business (fill needs, solve problems), the E-Myth series talks about how to build a business with regards to creating proper systems and automation, and Good to Great and Built to Last talk about how to build a great institution embodied with your entrepreneurial spirit and then make it where it stays that way, so when you leave the business, it stays entrepreneurial, and you can build more businesses.
I think this book is also very important because many entrepreneurs do talk about how on the one hand they want to keep the entrepreneurial spirit in the company, but then on the other hand, it needs professional management. And if you intend to take the company public through an IPO, or go off to build up other businesses, you need to have it where the management that takes over in your place keeps the same creative visionary spirit in the business.
Some entrepreneurs have the problem of hiring professional management, but the management doesn't have the same spirit as the entrepreneur, so even though the business is automated, when the entrepreneur leaves the business, the management just can't run it as well and it loses it's specialness.
These books teach how to make it where the business will keep the entrepreneur's spirit.
The book also is not just about businesses per se, as business is one form of institution. The book uses businesses as the method to study institutions, but these books are about how to build great institutions overall, whether a business, charity, university, government agency, etc...all kinds of institutions.
It is very difficult to talk about the points made by the book, as it is detailed, but basically it makes the key point that the notion that great companies require these great, hard-charging, charismatic CEOs is not necessarily true. For example you often here about a company wanting to bring in an outside CEO who is like a celebrity-type to "shake things up." The CEO and management do need to be very ambitious and hard-working, but the difference is that the very charismatic CEOs usually do not build a great institution. What they do is lead a mediocre institution while being great leaders. Once they leave, the business goes south. A lot of times, this is also ego, to "prove" how great a leader they were. If they build a great institution that is great when they leave, and then becomes greater and greater as their successors built on what they did, well that plays on the ego of some.
Lee Iacocca of Chrysler is an example of a great leader of a lousy instititution. Iacocca is very, very egotistical/ego-driven, for example, when he turned Chrysler around, he appeared on every talk show he could. He did so much public appearances that his attention at Chrysler began to wane, and as it did, so did the company. He was a great leader, but never built Chrysler to be a great institution. When he paid attention, Chrysler did well. When he stopped paying attention, it went south, and when he left Chrysler, the company has struggled since. Now Cerberus Capital Management owns it, hopefully they can build it to be a great institution.
Steve Jobs with Apple is another one. Apple was a great company with Jobs around, but when he left, and a management team took over, the company went south. Apple was a lousy institution with a great, visionary leader. When Jobs came back, Apple made a great turnaround. However, if Jobs isn't aware of what I'm writing here, then when he leaves, Apple will likely go south again, unless Jobs has a successor very much like him.
Jobs needs to focus on, rather than being a visionary leader of Apple, of literally turning Apple into a visionary company, one that will be embodied with his visionary spirit long after he's gone, so that it will continue to become greater and greater.
Much of the book details about how to turn a sub-par institution into a great institution. It talks about how things like, for example, mergers and acquisitions are mis-used by companies. Many companies try to use mergers and acquisitions as a way to "turn a company around," whereas the truly "good to great" companies rather worked to turn their company around and used mergers/acquisitions to enhance the process, not to get it going.
Another point made was that all the good-to-great companies made sure to always get the right people on board. If the wrong people were on board (for example through nepotism), they were fired. The businesses could not begin the turnaround process until they got the right people on.
Built to Last is next on my list, and is about how, after taking a company from "good to great," how to make it an enduring great institution.
IMO, a good entrepreneur's list of reading should be:
MJ's "Do You Have a Successful Entrepeneurial Premise?" article
followed by reading
Michael Gerber's The E-Myth Revisited and The E-Myth Mastery
followed by reading
Good to Great and I am going to guess Built to Last is just as good. Built to Last was written first, but actually Good to Great is what should be read first.
MJ's shows how to go about starting the business (fill needs, solve problems), the E-Myth series talks about how to build a business with regards to creating proper systems and automation, and Good to Great and Built to Last talk about how to build a great institution embodied with your entrepreneurial spirit and then make it where it stays that way, so when you leave the business, it stays entrepreneurial, and you can build more businesses.
I think this book is also very important because many entrepreneurs do talk about how on the one hand they want to keep the entrepreneurial spirit in the company, but then on the other hand, it needs professional management. And if you intend to take the company public through an IPO, or go off to build up other businesses, you need to have it where the management that takes over in your place keeps the same creative visionary spirit in the business.
Some entrepreneurs have the problem of hiring professional management, but the management doesn't have the same spirit as the entrepreneur, so even though the business is automated, when the entrepreneur leaves the business, the management just can't run it as well and it loses it's specialness.
These books teach how to make it where the business will keep the entrepreneur's spirit.
The book also is not just about businesses per se, as business is one form of institution. The book uses businesses as the method to study institutions, but these books are about how to build great institutions overall, whether a business, charity, university, government agency, etc...all kinds of institutions.
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