Good to Great
by Jim Collins

Good to Great is the culmination of another impressive research project by Built to Last coauthor Jim Collins. Collins, along with a 21-person team, sought to answer the question posed by Built to Last fans “[W]hat about the vast majority of companies that wake up partway through life and realize that they’re good, but not great?”

Presented as a prequel to Built to Last, Good to Great is amazingly well-written, thought provoking, and engaging. Collins’ ability to make simple, yet insightful observations based on complex information transforms his comprehensive findings into a remarkably easy read.

To be classified as “good to great,” companies were selected that fit a simple pattern: 15 years of cumulative stock returns at or below the general market followed by 15 years of returns at least three times above the market. The “good to great” companies were then compared to direct competitors, as well as companies that made short-lived shifts into greatness, but failed to stay the course.

Through comparison it becomes clear why some companies became great and others have names that are hardly recognizable today (Addressograph?) At each turn some of the most interesting findings are those that were unexpected, and in many cases contradictory to the way in which most businesses function.

Here are a few key factors that had a profound impact on companies that went from good to great:

• The Bus. Regardless of what direction the company will take, hiring the right people, positioning them properly, and removing the wrong people is critical to success. Once you have the “right people in the right seats, and the wrong people off the bus, then [you can] figure out how to take it someplace great.” This is in contrast with the misconception that the destination is more important than the people, or that the wrong people can be motivated into conformity.


• The Stockdale Paradox. Admiral Jim Stockdale was a POW during the Vietnam War. Despite torture and imprisonment lasting eight years, he never gave up faith that in the end he would prevail and that the experience would become a defining event in his life. During his imprisonment Stockdale dealt head-on with his circumstances. By never losing sight of the current (brutal) facts and by never losing faith in how the story would end, Stockdale triumphed where others crumbled. Companies that embraced this paradox also triumphed.


• The Hedgehog Concept. Determine what your company can be the best in the world at. Also determine what your company can NOT be the best in the world at. Go with the former and cut out all diversions towards the latter. If this means abandoning a current path, that’s OK. Great companies focus on one big thing that they know they can win at.

Not surprisingly, in the end, no single action or indicator was discovered that could predict a company’s rise to greatness. Additionally, the process of moving from good to great can best be described as one of slow, steady determination, rather than a rocket ride to overnight success. With that in mind, Good to Great provides an excellent guide for evaluating a current company and determining if it’s progressing closer to greatness or to obscurity. If you find you’re moving in the wrong direction this book provides the keys to getting on the right track.

The end of the book ties in neatly with its predecessor and “sequel” Built to Last, which I highly recommend as well.

The One Minute Manager
by Kenneth H. Blanchard & Spencer Johnson

I love this book because it does away with the notion that being a good manager requires ridiculous amounts of time, effort, diplomacy, and people-motivating abilities, that, let’s face it, most managers simply do not have. Instead, the techniques presented can be put into practice quickly and easily with exponential results.

Most people are familiar with what bad management looks like, yet, it’s easily overlooked in workplaces where poor management is the norm. The author provides an insightful and somewhat comical examination of poor management styles and their implications. Not surprisingly, the impact is far-reaching, causing declines in productivity and satisfaction that adversely affect entire organizations.

My favorite analogy in the book, by author Kenneth Blanchard, is his account of working as a college professor. He describes being in trouble with a faculty committee for handing out the final exam on the first day of class. He reasoned that by distributing the final on the first day students would understand exactly what they are being asked to learn. Blanchard asserts that it’s really a choice between providing or withholding the knowledge one needs to succeed. A good manager provides this knowledge with the goal of making everyone on his team a “winner.”

This analogy provides a good introduction into the first “one minute” technique: One Minute Goal Setting.  One Minute Goal Setting occurs when an employee is new or is starting a new assignment. Very simply, this is when employee goals are set. Upon completion the employee has a clear understanding of their areas of responsibility.

Why is this so important? Many employees interviewed by the authors were oblivious to the desires of their managers. They were often working diligently on tasks that had little or nothing to do with what their managers wanted. The employees were not willfully disobedient; instead the culprit was a lack of shared knowledge regarding accountabilities. 

The next two techniques, One Minute Praising and One Minute Reprimands, allow the employee to gauge their performance. The authors dub the prevalent management style in America “leave alone, zap” implying that most employees will hear nothing from management until they do something below expectation resulting in punishment. Despite its prevalence, this technique is contrary to the simplest way to encourage employee productivity and success: catching people doing something right.

The authors point out the key fact that people who feel good about themselves produce good results. Catching people doing something right, and praising them for it, not only improves their feelings about themselves; it encourages the behavior that produced the result.

Finally, One Minute Reprimands are a far cry from the aforementioned “zap.” This simple reprimand technique allows the manager to immediately bring an incident to attention so that behavior can be modified. The best part is that the delivery of the reprimand leaves the individual focused on what they did incorrectly, not on how they were treated, thus negating the typical residual feelings of contempt.

At just over 100 pages this book is too good to pass up. If you are a manager, and you have 45 minutes to read the book and 3 minutes to apply the techniques with an employee I guarantee you’ll be blown away by the results. If you’re not in a management role, read it anyway. The three management techniques have far-reaching applications that can benefit just about anyone in any walk of life.

The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It
by Michael E. Gerber

The E-Myth Revisited is a highly recommended read for anyone interested in business start-up, especially if that interest is fueled by the desire to turn a hobby or a technical skill into a business.

Uncovering the Myth
The book follows the story of Sarah, a woman who grew up baking pies with her aunt. As an adult Sarah is living her dream as the owner of a pie shop. Sarah represents every individual who has ever taken a beloved hobby and turned it into a small business. The pie shop has experienced moderate success, yet, instead of this success bringing freedom, Sarah is overwhelmed. She’s on the verge of a breakdown and her business is on the verge of failure.

Sarah’s pie shop has reached the first stage where small businesses fail. The business, which was supposed to represent freedom from having a boss, has become the most demanding boss ever imagined.

At this stage in the story we are introduced to three key roles in a successful business, the technician, the manager, and the entrepreneur. Each phase of a small business’s growth relies heavily upon one of these three roles. While one person can fill all three roles, many people start a business thinking that one out of three is enough. It’s not. This critical mistake is why most business will never successfully make it from infancy to adolescence to maturity. This is the E-Myth revealed.

What to do about it…
The next section of the book, which I found incredibly interesting, focuses on the impact of the Turn-Key Revolution on small business. This revolution is based on the idea that, while products are important, the way in which a business does business is even more important. If a business can create repeatable processes that generate desired, predictable results, then the customer’s satisfaction and the proprietor’s freedom are assured.

With this end goal in mind, the steps needed in the journey from point A, business infancy, to point B, business maturity, are revealed. These steps can be summed up in one word: strategy. Organizational strategy, people strategy, marketing strategy, etc. The information the author provides about formulating these strategies is insightful, as are the stories used to demonstrate the pitfalls that occur when these strategies are not developed.

Overall, The E-Myth Revisited provides a thought-provoking preview of the journey ahead for any business start up. It’s refreshing to discover a book that describes the path to business ownership without including a seemingly unattainable prerequisite. There is no notion in this book that starting a small business requires someone who is exceptionally rich, smart, daring, or well-connected. As the author intertwines his personal story in with that of Sarah’s, and other entrepreneurs, events are both extraordinary and ordinary, yet nothing is made to seem unattainable. It’s simply a matter of knowing how to get where you want to go, and going.