In the current competitive business environment, companies are struggling to find ways of making radical shifts from what is considered conventional, to new approaches that can manage the emerging threats. According to Collins (2005), many companies are always striving to achieve good performance. The managing directors and other relevant stakeholders are keen on ensuring that their performance and the performance of their firms are good. A good performance is capable of making a firm to withstand market environmental forces and remain operational. However, it is important to understand that good is always the greatest enemy of great. Achieving good performance is relatively easier than achieving great performance. For a company registering good performance to start experiencing great performance, it will have to challenging the existing system, try out completely new methods that sometimes may be risky, and reject the performance that previously was described as good. As Porras (2002) notes, this means getting out of the comfort zone. It means going into a new world with unknown variables. Such ventures may not prove successful in the first attempt. Sometimes it may involve a number of failures at first. For the leaders who are not comfortable with such initial failures, changing from good to great may as well be an impossible path. It requires adventures leaders who are capable to dream of how good can be transformed to great. These leaders must be ready to withstand the challenges that come with such ventures and the patience it requires. In this paper, the researcher will conduct a philosophical analysis of Collins’ (2001) text.
Critical Analysis of the Book
Changing from Good to Great
According to Collins (2001), changing from good to great is one of the most challenging tasks that organisations face in the current business environment. It was easier to transform from good to great half a century ago. At that time, level of competition was low. However, the current environmental forces have redefined the approach that companies have to take in order to achieve greatness. Leadership is the focal point that defines the ability of a firm to achieve greatness. All other factors depend on the leadership strategies that the management employs in running various operations. The way in which a leader related with the employees defines the level of employee motivation. According to Wurtzel (2012), employees are the wheel upon which an organisation moves towards achieving success. The top managers are responsible for developing strategic objectives to be achieved by the end of a trading period. The employees must break these objectives into actionable tasks to be addressed on a daily basis. It is important, therefore, to ensure that these employees remain motivated in order to make them effective in addressing their duties. Their motivation largely depends on the approach that the leader takes in managing them.
Creativity has also been identified as a factor that determines the ability of a firm to achieve greatness. In fact, Wurtzel (2012) says that a firm cannot achieve greatness if it fails to be creative in its operations. Doing what others have done can never bring about greatness. This is so because the firm will be acting in a similar way as any other firm. The best it can achieve is an average performance. To achieve greatness, a firm may need radical approaches in addressing various activities that is unique from what other firms are doing. According to Hansen (2011), this may mean getting out of the comfort zone. This is what many firms always try to avoid. It is easier to work with variables that have been tested. This way, a firm will be able to know what to expect from every action it takes. However, achieving greatness involves working with unknown variables. A firm will need to take calculated risks and come up with a new approach of production that other firms have not tried before. If such new strategies prove to be successful, then a firm will be able to capitalise on the benefits that come with the new invention. Many firms that understand the benefits of creativity have come up with creativity incubators to develop new ideas. The ideas can come from the top managers, mid-managers or even junior employees. It only requires a creative dreamer who is able to visualise something that has never been done before.
According to Collins (2001), moving from good to great involves making mistakes and learning from them. When coming up with new inventions, making mistakes may be unavoidable. However, what is important is that a firm should learn from such mistakes and develop a way of addressing such activities in a better way. The risks taken at every stage must be calculated to ensure that if they occur, a firm will not be paralysed in its operations. In many cases, great firms are always able to identify weaknesses of a given strategy before the inception stage. Having a thorough idea evaluation process helps in identifying weaknesses before the commercialisation process. This helps in reducing or even eliminating challenges that may be faced when launching these new ideas. Some of the firms that were critically evaluated in this book include Nucor Corp, PepsiCo, Phillips Morris Companies, Pitney Bowes Inc, Sara Lee Corp, Walgreens Company, and Wells Fargo. These are companies that demonstrated unique capacity to manage environmental forces to emerge as major players in their respective firms.
Challenges of Changing from Good to Great
According to Collins (2001), there are a number of challenges that may inhibit the ability of a firm to achieve greatness. One of the main factors identified in this book is poor leadership. When an organisation lacks effective leadership strategies, it becomes almost impossible for a firm to come up with a vision that can lead to greatness. Poor leadership kills creativity and innovation within an organisation. A manager who cannot identify innovative minds within the workforce cannot lead a firm to greatness. It does not stop with the identification of talents among the employees. A leader should know ways through which these talents can be tapped for the benefit of all the stakeholders. The desire to maintain good performance is another important factor that inhibits the ability of a firm to achieve greatness. When a firm is comfortable for its good performance, then the desire to be creative in coming up with creative ideas will be eliminated.
Philosophical Analysis of the Text
It is important to start analysing the text by understanding the approach that the scholar used to collect, analyse and present his data. As stated in the appendix, the first step in collecting data was to identify the good to great companies that were to be analysed. The scholar selected 1,435 companies from fortune 500 from 1965 to 1995. This number was narrowed down to 126 companies for CRSP data pattern analysis. The number was narrowed further to 19 companies for industry analysis. Finally, the researcher identified 11 firms that could be considered to fall in the category of good to great companies. According to Wurtzel (2012), Fortune 500 offers the easiest way of identifying great companies in the global market. However, it is a shortcut that a scholar should not rely on when conducting such an important research. Fortune 500 only focuses on large multinational companies operating either in the United States or the global market. According to Hansen (2011), there are extremely successful companies around the world that have never appeared in the Fortune 500. This is mainly because some of them have never set their operations in the United States. Collins (2001) says that a great company may not necessarily be determined by the number of employees it has or its capital base. The social benefits a company offers to the stakeholders may also be used as a parameter to determine greatness of a company. For these reason, the approach taken by the researcher in this book was weak.
The researcher went ahead to look further to identify other parameters that can be used to determine great companies. This is an indication that the researcher appreciates the fact that being in the Fortune 500 alone is not enough. It would have been more appropriate to use other means to identify these companies such as the history of their development that made them become one of the Fortune 500 companies. Despite this weakness in selecting the companies, it is important to appreciate the fact that the researcher did a detailed analysis of the selected companies in order to determine their path towards greatness.
The rise to greatness among some companies is brought about by luck. According to Wurtzel (2012), some companies arose to greatness because of the prevailing economic conditions. Issues such as a boom in the economy or a given industry may result into a massive growth of a firm. This is so because products demand for the products during such periods are always high. Sometimes it may be so because of elimination of competition in the market. Competition may be eliminated when a dominant firm or market rival is paralysed or forced out of the market because of a number of reasons. In such instances, a firm may get a rare opportunity to rise from its current position to greatness. The author of this book did a great job in appreciating these facts. Firms that achieved greatness in such contexts have not been used as a true example of a rise from good to greatness. As Porras (2002) says, a firm should be able to rise from good to great in the face of all the market threats. It should wade through the market challenges; use its unique leadership skills to come up with unique solutions to the existing problems. The book has brought this fact very clearly in its analysis.
This booked looked at companies that rose to greatness from 1965 to 1995. Although this period was characterised by emergence of American firms as dominant multinational corporations, other countries also had dominant firms operating in the market. The timeframe was enough to study the transformation of the companies. However, there are two factors that were not given serious considerations. The first factor was the issue of firms that rose to greatness briefly before they disappeared. Although some of them are mentioned in the book, the author did not give a critical analysis of firms that took such dramatic paths. It would be better to look at such firms and explain why they took a negative turn after reaching greatness. According to Porras (2002), when explaining the reasons and the paths that firms take from good to great, it is also important to explain why some firms take the opposite turns. It is easier to assume that a firm that does opposite things will take opposite directions. However, this may not necessarily be true. It is common to find some firms applying completely different approaches but achieve a similar outcome. For instance, an organisation may decide to use dictatorial leadership in managing employees in order to achieve desired results. On the other hand, another firm may choose to use democratic leadership strategies in managing their employees. It does not necessarily mean that the firm which employs dictatorial leadership strategies will perform poorly compared to that which uses democratic leadership strategies. It, therefore, would be more appropriate for the author to critically explain factors that may make a firm to move from great to good.
The overall analysis of the text shows a detailed research that was conducted to determine factors that make firms move from good to great. The financial strategies that these firms used to reach greatness have been discussed critically. The author also focused on the role of the employees in achieving greatness. It is clear from his analysis that almost all the companies that rose to greatness involved their employees. The author attributed the success these firms to the ability of their managers to maintain a team of highly motivated employees. The book also talks about challenges that firms face affecting their ability to achieve greatness. Many firms struggle to greatness by doing the right thing in the right place and with the right people. However, they still fail to fall in the category of great firms. This book critically looks at the issues that may inhibit the growth of a firm to greatness despite all the right things it does in its operations.
There is consistency in the approach that these firms use to achieve greatness, a fact which makes this book credible. Doing the right thing with the right people only helps a firm to achieve success. However, to achieve greatness, it goes beyond this. Greatness requires creativity. It demands that a firm does something in a unique way, different from the approach that others are taking to address their tasks. This book insists that good-to-great companies that make it to Fortune 500 did something unique at one stage of their development that brought massive success in their operations.
The author of this book has conducted a comprehensive analysis of various companies in the Fortune 500 in order to understand what it takes for a firm to move from good to great in terms of performance. The philosophical analysis of this book reveals that leadership, creativity, and the desire to go beyond good performance are some of the factors that determine greatness.
Collins, J. (2001). Good to great: Why some companies make the leap and others don’t. London: Random House.
Collins, J. (2005). Good to great and the social sectors: Why business thinking is not the answer: a monograph to accompany good to great. New Jersey: John Wiley.
Hansen, M. (2011). Great by choice: Uncertainty, chaos, and luck: why some thrive despite them all. New York: HarperCollins Publishers.
Porras, J. (2002). Built to last: Successful habits of visionary companies. New York: Collins Business Essentials.
Wurtzel, J. (2012). Good to great to gone. New York: Diversion Books.