Why do some companies achieve sustained greatness while others remain merely good?
Good to Great: Why Some Companies Make the Leap _ And Others Don’t by Jim Collins
Elevating African Enterprises ,To know how certain companies go from Good enough to Great, Jim Collins has chosen in his study just the companies that have sustained superior results for 15+ years to filter out companies that rely on one good leader or industry hype, and compare them to the unsustainable ones. As a condition, he chose to take just the Companies that have demonstrated cumulative stock returns at least three times the market average over 15 years for his studies. Another condition is that the transition from good to great should start with a transition point, not during a market bubble or temporary boom.
The “Who Before What” Principle
He found out that those companies choose the members of their team (the “who”) and “what” they should stop doing _the right people on the bus and the wrong ones off _ before setting a strategy, then align them with roles that match their strengths (right seat on the bus). Even a brilliant strategy will fail without the right people to execute it. When choosing the members of a team, it is crucial to prioritize work ethic, integrity, and adaptability over skills that can be taught. There is no need for bureaucracy here; people chosen should be self-managed, self-motivated, and committed to achieving their goals, so there is no need for controls.
People thrive when contributing to meaningful success. Leaders should encourage debate by asking questions in meetings to surface the best ideas, but demand full commitment once a decision is made. They preserve in the team a disciplined thought by confronting brutal facts while having faith, he called this “The Stockdale Paradox”, that concept was named after Admiral James Stockdale, a U.S. naval officer who was held as a prisoner of war in Vietnam for over seven years and survived by confronting the brutal reality of his situation while maintaining the faith that he would eventually prevail.
Core Strategy: The Hedgehog Concept
To go from good to great, those successful companies have focused on one clear, simple strategy rather than chasing multiple directions. This business strategy framework is called the Hedgehog Concept, based on the ancient Greek parable: “The fox knows many things, but the hedgehog knows one big thing.” In this matter, it is recommended to answer the three questions: What can you be best in the world at? _ not just good enough _ What drives your economic engine? What are you deeply passionate about? If the projects are misaligned with the company’s Hedgehog, it is systematically abandoned. Disciplined Action focuses on maintaining small, disciplined efforts that compound over time, like pushing a massive flywheel (the flywheel Effect).
Elevating African Enterprises : Level 5 Leadership
Great companies have level 5 leaders who have a “window mirror mentality”, they credit luck and external factors for success (window), and blame themselves and take responsibility for failures (mirror), they have also the will, commitment to results, and ambition for the company so they end up building systems that outlast them. They exit quickly if they don’t align with the company’s mission. They learn from mistakes, not blame it on others. The Level 5 leader characteristics often emerge from hardships, mentorship, or self-reflection, and not from innate talent. Contrary to Level 4 leaders, their egos drive them; their system doesn’t last in the long term, it collapses just after they leave the company.
Cultivating Long-Term Stability Through Disciplined Execution and Strategic Alignment
Most of the great companies promote their CEOs from within. Technology here is used just to accelerate the progress because the adoptions of the tech without purpose just lead to a waste of resources. Great companies preserve their core principles even when facing trends. They avoid layoffs and wait for the right fit, even if it delays projects (When in Doubt, Don’t Hire). That is how they plan for long-term stability.
They reassigned underperformer employees who demoralized top talent, and employed the most talented employees in the company on future opportunities, not just fixing problems to ensure that they are being used to create future success instead of attempting to sustain parts of the business that were already in decline. To go from good to great, companies simplify decision-making by focusing on a single key financial metric (single economic denominator), which helps support long-term growth without getting lost in complex financial analyses. Great companies acquire only when they see that this will enhance an existing business strategy, rather than creating entirely new directions.
Buy the Book: Good to Great: Why Some Companies Make the Leap _ And Others Don’t by Jim Collins
Also Read: Cultural Diversity: Global and African Communication Styles for Collaboration
