★★★★☆ The intellectual rigor of Kipling's Just So Stories with some of the entertainment value

Good to Great: Why Some Companies Make the Leap... and Others Don't

Jim Collins

James C. Collins's Good to Great: Why Some Companies Make the Leap... and Others Don't is a report of a research study ostensibly designed to find out how a company becomes great. Here's the research design: Collins and his research group did a massive survey of the business literature. They combed it for companies that met their "good-to-great" criteria, which, somewhat condensed, were

1. The company shows a pattern of “good” performance punctuated by a transition point, after which it shifts to “great” performance.

2. The good-to-great performance pattern must be a company shift, not an industry event.

3. At the transition point, the company must have been an established, ongoing company, not a start-up.

4. The transition point had to occur before 1985 so that we would have enough data to assess the sustainability of the transition.

5. Whatever the year of transition, the company still had to be a significant, ongoing, stand-alone company.

6. Finally, at the time of selection, the company should still show an upward trend.

In this way they selected 11 "great companies". For comparison they also picked out eleven not-so-great companies in the same industries, and six additional non-great companies. They then assembled a huge literature database on these companies and held long discussions about them. Collins writes, "When all was said and done, the total project consumed 10.5 people years of effort." (This, to be honest, strikes me as a small number for such a project.) And they distilled the results into seven conceptual criteria shared by the good-to-great companies.

Now, if you're a researcher, it is obvious to you that this research design is desperately flawed. The phrases "Correlation is not causation" and "selection bias" are good places to start. I'm not going to go into the flaws in detail. You can, for instance, look at the Good to Great Wikipedia page.

Why, then, do I give the book a four-star rating? Well, it's excellent story-telling. We all love stories of ordinary people breaking out from the pack and becoming great. Besides that, the good-to-great concepts Collins identifies are feel-good things. And Collins writes well.

So, here's my recommendation: read Good to Great as if it were a work of fiction, because that's what it is, in effect. Ignore the subtitle "Why Some Companies Make the Leap... and Others Don't" -- you ain't gonna learn that here.

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