When people discuss the most influential business books, Good to Great: Why Some Companies Make the Leap…and Others Don’t, by Jim Collins, is one of the most frequently mentioned.
It’s sold over four million copies and remains one of the most instructive and important leadership resources, carrying wisdom that has remained pertinent since its publication in 2001.
The Entrepreneurial Operating System takes inspiration from Good to Great, and creates simple tools which help you put the characteristics of what makes a good company into practice.
The book contains applied business ideas and techniques, stressing a focus on key competencies and the removal of distractions.
Collins details the key characteristics of “good to great” companies, highlighting how most fail to make the leap to greatness and the transition can be extremely difficult.
He conducted a study, assembling a 21-strong team of researchers to study the financial results of selected companies.
He created a comprehensive list of the companies which successfully went from good to great which include Walgreens (which now owns Boots), Gillette and Kimberly-Clark.
Jim Collins describes the transformation process from good to great as a continual buildup followed by a breakthrough.
In buildup and breakthrough, he saw successes in three stages: disciplined thought, disciplined action, and most importantly, disciplined people.
The characteristics of elite companies.
1. Level 5 leaders
Leaders who retain humility channel their ambition into the wider goal of building a great company. They focus on the greater good of their business, rather than their individual ego or self-interest.
2. First who and then what
It’s vital to get the right staff, leaders and executives on the team before figuring out what the best way to greatness is. “A great vision without great people is irrelevant,”. The EOS tools, specifically the Accountability Chart and People Analyser assist businesses with structuring their business first, decided who matches the core values and getting the right people in the right seats.
3. Facing the facts
Always refine your path to greatness by facing up to the brutal facts of reality. This means creating open and honest discussion in the business, in order to address issues as they arise.
Our EOS client Julian Tomlinson of Auto Legal Protection Services says: “The big lesson has been the importance of holding out for the simple answer when it’s not the easy one.”
4.. Hedgehog concept
In chapter 5, Collins borrows from the story ‘The Hedgehog and the Fox’, where the hedgehog sees what is most essential – him protecting himself from the fox. He describes “the Hedgehog Concept” as three intersecting circles: what are you good at, what pays well, and what do you love.
5. Discipline culture
Collins describes an idea where disciplined people engage in disciplined thought and take disciplined action.
6. Technology accelerators
Carefully selecting technology can accelerate momentum and help a company move towards greatness.
7. The flywheel effect
Many small initiatives and efforts build your momentum build and have a compounding effect.
When I work with my clients, I ask them where they want to take their business: not all entrepreneurs strive to have a £50-100 million turnover. Even so, the principles outlined in Good to Great stand true for every business, nearly two decades later.
Being clear on what you want, having a system to run your business and having discipline can help every business navigate competitors, market fluctuations and economic challenges.
If you want support applying EOS to your business, contact us today on +44 (0)7795 667480.