How proper leadership can take a company from “good to great”

Leaders are often tasked with transforming a business and navigating both external obstacles and internal changes. Given that some organizations have successfully navigated this journey, what lessons can leaders draw from these examples?

One of the most enduring answers to this question is found in Jim Collins’ influential book “Good to Great,” which explores the underlying traits of companies that have made the transition to being great (and not just good). The companies mentioned in the book may have undergone changes over time, but the lessons remain valid.

Leaders need to consider a couple of factors when making strategic decisions to drive the company forward, the book says. These include:

Hedgehog Concept: Focuses on simplicity of choice and doubling down on the strengths that can truly make a company great.

Flywheel Effect: Focuses on accelerating growth through incremental advancements, so it is important for leaders to identify the right growth flywheel for the company.

The book also warns against a vicious circle approach, which involves frequent changes that do not generate the proper momentum. The behavior of leaders
Strategic decisions would be facilitated by the leaders’ own behavior. The book explains these factors as:

The Power of “Level 5” Leadership: The author defines “Level 5 Leadership” as one in which leaders are ambitious but combine their professional will with personal humility.

In today’s age of social media, leaders are more visible than ever before. While this can build personal branding, the leader’s brand can take precedence over the company’s brand. It’s important for leaders to focus on organizational success rather than on garnering personal praise, she explains.

Building the right team: Another key fact the book points out is that unless leaders have the right people in place, the path to growth or transformation can be derailed. “First the who, then the what,” says Collins. This implies that a key priority for leaders is to ensure that the right people are on board and empowered so that they can inspire, lead and overcome challenges along the way.

Face the facts: To make this journey possible, leaders must face the facts clearly and without blinders.

Organizational changes
Depending on the direction the company needs to take, leaders must foster a culture of discipline. They must ensure that people are motivated and operate with the right balance of freedom and responsibility.

Another momentum accelerator identified in the book, which over time has become indisputable, is technology. In this book, “Great to Good” makes it clear that technology must be aligned with the hedgehog concept. This can bring clarity about technology investments and what is not rooted in the strategic direction of the company.

Finally, companies cannot sustain their greatness over a long period of time unless they are rooted in core values ​​that guide their decisions and actions. These values ​​should not be negotiable, Collins adds.