Good to Great: Why Some Companies Make the Leap…And Others Don’t – Book Review

by Victor Cheng

Jim Collins takes a quantitative approach to analyzing what factors turn a good company into a great one in his highly acclaimed book Good to Great: Why Some Companies Make the Leap…And Others Don’t (2001). Collins and his 26 person research team analyzed reams of corporate data from public companies and defined a good-to-great transition as 10-years of relative inactivity followed by 15 years of cumulative stock returns.

By their tally, only 11 of the roughly 1,400 companies ever to make the Fortune 500 met these good-to-great criteria (including Walgreens and Kimberly Clark). The team established six core principles integral to the success and sustainability of good-to-great companies, most notably the Hedgehog Concept; a company boasting a product or service so stellar that it overshadows competitors and fuels the company’s economic furnace projecting them well beyond the competition. Collin’s and his team reveal findings applicable to all aspects of business management and strategy rendering the book a source of accessible instruction for the up and coming entrepreneur or Fortune 500 CEO.

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