A Practical Review of One of the Most Influential Business Books Ever Written
Introduction
Few business books have had the lasting impact of Good to Great by Jim Collins.
First published in 2001, the book quickly became a global bestseller and remains one of the most respected business and leadership books ever written. More than two decades later, business owners, CEOs, board members, entrepreneurs and leadership teams continue to reference its findings when discussing business growth, leadership effectiveness, organisational culture and long-term success.
The central question Collins sought to answer was remarkably simple:
Why do some companies make the leap from being good to becoming truly great, while others never do?
To answer this question, Collins and his research team spent five years studying thousands of companies, analysing decades of performance data and comparing exceptional businesses against similar organisations that failed to achieve comparable results.
The findings challenged many conventional assumptions about leadership and business success.
For SME owners, founders, family-owned businesses and leadership teams throughout Perth, Western Australia and beyond, the lessons contained within Good to Great remain highly relevant today.
While the original research focused on large corporations, the principles can be applied equally effectively within small-to-medium businesses seeking sustainable growth, stronger leadership, improved accountability and better strategic execution.
This review examines the key concepts from the book and explores how business owners can apply these lessons to build stronger and more successful organisations.
About Jim Collins
Jim Collins is an American researcher, author and business consultant widely recognised as one of the world’s leading thinkers on organisational performance.
Unlike many business authors who rely heavily on personal opinion or anecdotal stories, Collins is known for his disciplined, research-driven approach.
His work focuses on understanding why some organisations consistently outperform others and what leaders can do to improve business performance over the long term.
Other notable books by Collins include:
- Built to Last
- Great by Choice
- How the Mighty Fall
- Beyond Entrepreneurship
However, Good to Great remains his most influential and widely read publication.
The book’s enduring popularity stems from its combination of rigorous research and highly practical insights.
The Central Premise of Good to Great
One of the most powerful ideas presented in the book is that:
Good is the enemy of great.
Many businesses achieve acceptable levels of success.
They generate profits.
They satisfy customers.
They provide employment.
They survive for years or even decades.
However, relatively few businesses achieve sustained greatness.
According to Collins, many organisations never become exceptional because they become comfortable being good.
Rather than continually striving for improvement, they settle for acceptable performance.
The organisations studied in Good to Great demonstrated a relentless commitment to improvement and long-term excellence.
Importantly, Collins discovered that these companies were not necessarily operating in better industries.
They did not always possess superior products.
They did not have greater access to capital.
Nor were they always led by charismatic celebrity CEOs.
Instead, they shared several common characteristics that consistently distinguished them from their competitors.
Level 5 Leadership
The most famous concept to emerge from Good to Great is Level 5 Leadership.
Before reading the book, many people assume that highly successful companies are led by charismatic, larger-than-life personalities.
Collins found the opposite.
The leaders of great companies were often modest, humble and relatively understated individuals.
Yet beneath this humility was an extraordinary level of determination and commitment.
The Two Characteristics of Level 5 Leaders
Level 5 Leaders combine:
- Personal humility
- Professional will
Personal humility means placing organisational success ahead of personal recognition.
Professional will refers to an unwavering determination to achieve organisational objectives and create long-term success.
These leaders are ambitious.
However, their ambition is directed toward the organisation rather than themselves.
They focus on building enduring businesses rather than personal reputations.
Why Level 5 Leadership Matters for SME Owners
This lesson is particularly relevant for business owners and founders.
Many SMEs become heavily dependent on their owner.
The owner becomes:
- Chief decision-maker
- Chief salesperson
- Chief strategist
- Chief problem solver
While this may be necessary in the early stages of business growth, it eventually becomes a limitation.
Businesses that depend entirely on one individual often struggle to scale.
Level 5 Leaders understand that sustainable growth requires building systems, processes and leadership capability throughout the organisation.
The goal is not to become indispensable.
The goal is to build a business capable of succeeding without constant owner involvement.
For many SME owners, this may be the single most valuable lesson contained within the book.
First Who, Then What
One of the most surprising findings in Good to Great relates to people.
Most organisations focus on strategy first.
They ask:
- What should we do?
- Which markets should we enter?
- What products should we launch?
- What opportunities should we pursue?
Collins discovered that great companies approached these questions differently.
Rather than focusing on strategy first, they focused on people.
He summarised this concept with the phrase:
First Who, Then What.
Getting the Right People on the Bus
The most successful organisations first focused on getting the right people into the business.
They ensured they had capable individuals in key positions before making major strategic decisions.
They also removed individuals who were not aligned with the organisation’s values, standards or direction.
Once the right people were in place, determining strategic direction became significantly easier.
Lessons for Growing Businesses
Many business problems are actually people problems.
Poor performance often stems from:
- Recruitment mistakes
- Leadership capability gaps
- Cultural misalignment
- Weak accountability
- Poor communication
Business owners frequently spend enormous amounts of time attempting to fix operational problems when the underlying issue is having the wrong people in key roles.
The lesson from Collins is clear:
The right people make strategy easier.
The wrong people make strategy almost impossible.
The Hedgehog Concept
Another powerful idea presented in Good to Great is the Hedgehog Concept.
The concept is based on an ancient Greek parable:
“The fox knows many things, but the hedgehog knows one big thing.”
Foxes pursue many opportunities simultaneously.
Hedgehogs remain focused on one core strength.
Collins argues that great companies behave more like hedgehogs.
Rather than chasing every opportunity, they focus relentlessly on the area where they can achieve exceptional results.
The Three Circles of the Hedgehog Concept
According to Collins, organisations should identify the intersection of three key questions:
What Are You Deeply Passionate About?
Businesses perform best when leaders genuinely care about what they do.
Passion creates energy, commitment and resilience.
What Can You Be Best in the World At?
This does not necessarily mean being the largest.
It means identifying the area where you can genuinely outperform competitors.
What Drives Your Economic Engine?
What activity generates sustainable profitability?
What creates long-term economic value?
The intersection of these three circles forms the organisation’s Hedgehog Concept.
Application for SME Owners
Many businesses attempt to do too much.
They pursue too many products, services and opportunities.
As a result, resources become diluted and performance suffers.
The Hedgehog Concept encourages focus.
Businesses that clearly understand what they do exceptionally well often outperform competitors attempting to be everything to everyone.
Confront the Brutal Facts
One of the most powerful concepts in Good to Great is the importance of confronting reality.
Many leaders prefer optimism.
They focus on opportunities, possibilities and positive outcomes.
While optimism is important, Collins discovered that great leaders combine optimism with an unflinching willingness to face difficult truths.
This principle became known as the Stockdale Paradox.
The Stockdale Paradox
The concept is named after Admiral James Stockdale, a senior United States military officer who spent more than seven years as a prisoner of war during the Vietnam War.
When asked how he survived such an extreme ordeal, Stockdale explained that successful prisoners maintained two seemingly contradictory beliefs:
- They never lost faith that they would ultimately prevail.
- They confronted the brutal facts of their current reality.
Collins concluded that great leaders operate in exactly the same way.
They maintain confidence about the future while simultaneously acknowledging current challenges.
Why This Matters for Business Owners
Many businesses struggle because leaders avoid confronting uncomfortable realities.
Examples include:
- Declining profitability
- Customer dissatisfaction
- Excessive debt
- Weak cash flow
- Outdated business models
- Increasing competition
Ignoring problems rarely makes them disappear.
In fact, delays often make them worse.
Level 5 Leaders confront difficult issues quickly and honestly.
They encourage open discussion.
They seek facts.
They challenge assumptions.
Most importantly, they make decisions based on reality rather than hope.
Practical Application
Business owners should regularly ask:
- What challenges are we avoiding?
- What conversations are we postponing?
- What assumptions may no longer be true?
- What facts are telling us that change is required?
The ability to face reality often becomes a significant competitive advantage.
A Culture of Discipline
Another defining characteristic of great organisations is discipline.
Many businesses rely heavily on supervision, controls and bureaucracy.
As they grow, layers of management, reporting and approval processes often emerge.
Collins found that truly great companies approached discipline differently.
They created cultures where disciplined people consistently produced disciplined outcomes.
What Is a Culture of Discipline?
A culture of discipline is not about strict rules or authoritarian leadership.
Instead, it involves:
- Clear expectations
- Consistent execution
- Strong ownership
- Professional standards
People understand what is expected of them.
They take responsibility for delivering results.
They require less supervision because accountability becomes embedded within the culture.
Why Discipline Drives Performance
Disciplined organisations typically experience:
- Better execution
- Greater consistency
- Improved customer service
- Higher productivity
- Stronger profitability
Without discipline, businesses often become reactive.
They spend their time solving recurring problems instead of pursuing strategic opportunities.
Lessons for SME Owners
Many growing businesses experience increasing complexity.
Additional staff, customers, suppliers and systems create new challenges.
The solution is not necessarily more bureaucracy.
The solution is often greater discipline.
This includes:
- Clear responsibilities
- Defined KPIs
- Consistent reporting
- Regular accountability discussions
- Strong leadership expectations
Businesses that establish discipline early are generally better positioned for sustainable growth.
Technology Accelerators
One of the more surprising findings from Good to Great relates to technology.
Many organisations assume that technology is the primary driver of business success.
Collins found otherwise.
Great companies did not rely on technology to create greatness.
Instead, they used technology to accelerate momentum already being generated through strong leadership, disciplined execution and strategic clarity.
Technology Is Not the Solution
Technology cannot compensate for:
- Poor leadership
- Weak strategy
- Low accountability
- Dysfunctional culture
- Poor customer service
No software platform can solve fundamental leadership issues.
Technology should enhance an already effective organisation.
Technology as an Accelerator
The best companies use technology to:
- Improve efficiency
- Enhance customer experience
- Support decision-making
- Strengthen communication
- Increase scalability
Technology amplifies what already exists.
If leadership and culture are strong, technology can accelerate growth.
If leadership and culture are weak, technology often accelerates problems.
Application for Modern Businesses
This lesson is particularly relevant today given the rapid growth of:
- Automation
- Data analytics
- CRM platforms
- ERP systems
While these tools can create significant value, they should support a clear strategy rather than replace one.
Business owners should avoid the temptation to view technology as a substitute for leadership.
The Flywheel Effect
The Flywheel Effect is perhaps one of the most practical and memorable concepts presented in Good to Great.
Imagine attempting to move a giant flywheel.
Initially, progress is slow.
Each push appears to have little impact.
The wheel barely moves.
However, every push contributes to momentum.
Gradually the flywheel begins turning.
As momentum increases, each additional push becomes more effective.
Eventually, the flywheel is moving rapidly.
The breakthrough appears dramatic.
Yet it was actually the result of hundreds or thousands of small, consistent actions.
The Myth of Overnight Success
Many businesses search for:
- Breakthrough strategies
- Quick wins
- Silver bullets
- Overnight success
Collins found that great companies rarely achieve success through one dramatic event.
Instead, success typically results from:
- Consistent effort
- Disciplined execution
- Continuous improvement
- Long-term commitment
The Flywheel Effect reminds leaders that sustainable success is usually gradual rather than sudden.
Lessons for Business Owners
Many SME owners become discouraged when results do not appear immediately.
Growth initiatives may take months or years to produce meaningful outcomes.
The Flywheel Effect encourages persistence.
Small improvements compound over time.
Consistent execution ultimately creates momentum.
Businesses that remain committed to long-term improvement often outperform those continually chasing the next big opportunity.
What SME Owners Can Learn from Good to Great
Although Collins studied large corporations, the lessons apply remarkably well to smaller businesses.
Many of the challenges facing SMEs are leadership challenges rather than operational challenges.
The book provides several practical lessons.
Build Leadership Capability
Leadership drives organisational performance.
Investing in leadership development often produces returns far greater than investing solely in systems or technology.
Focus on People
The quality of a business rarely exceeds the quality of its people.
Recruit carefully.
Develop talent.
Address underperformance promptly.
Clarify Strategic Direction
Know what your business stands for.
Understand your competitive advantages.
Remain focused on your core strengths.
Create Accountability
Accountability improves execution.
Clear expectations create better outcomes.
Strong accountability supports sustainable growth.
Think Long Term
Many business owners become overly focused on short-term results.
Great businesses are built through consistent effort over many years.
Long-term thinking often leads to superior outcomes.
Relevance to Family-Owned Businesses
Many family-owned businesses face unique challenges including:
- Leadership transitions
- Family dynamics
- Long-term sustainability
Several concepts from Good to Great are particularly relevant to family enterprises.
Level 5 Leadership and Family Business
Family businesses often succeed when leaders place organisational interests ahead of personal interests.
Humility, accountability and long-term thinking are essential.
The Right People in the Right Seats
Family involvement should not automatically determine leadership positions.
Roles should align with capability and organisational needs.
Governance Matters
As family businesses grow, governance becomes increasingly important.
Independent perspectives, advisory boards and structured decision-making can strengthen performance and reduce conflict.
These lessons remain highly relevant for family-owned businesses throughout Western Australia and beyond.
Strengths of Good to Great
One of the reasons Good to Great has remained influential for more than two decades is that it combines rigorous research with highly practical business insights.
Many business books are based largely on personal opinions or individual experiences. Collins approached the subject differently.
His conclusions were derived from extensive analysis of company performance over long periods, providing greater credibility and practical relevance.
Research-Based Insights
The book is built upon a substantial body of research rather than theory alone.
This gives readers confidence that the concepts are supported by evidence rather than anecdotal observations.
Practical Frameworks
The concepts introduced throughout the book are memorable and easy to apply.
Examples include:
- Level 5 Leadership
- First Who, Then What
- The Hedgehog Concept
- The Flywheel Effect
- The Stockdale Paradox
- A Culture of Discipline
Each framework provides practical guidance for leaders seeking to improve organisational performance.
Long-Term Perspective
One of the book’s greatest strengths is its emphasis on sustainable success.
Rather than focusing on short-term wins or quick fixes, Collins concentrates on the factors that create enduring business performance.
This long-term perspective remains particularly relevant for SME owners and family businesses.
Strong Leadership Lessons
The leadership lessons contained within the book are arguably its most valuable contribution.
The concept of Level 5 Leadership has influenced countless organisations around the world and continues to shape modern leadership thinking.
Criticisms of Good to Great
No business book is without criticism.
While Good to Great remains highly respected, several commentators have challenged aspects of the research and conclusions.
Some Featured Companies Later Struggled
One of the most common criticisms is that several companies identified as “great” subsequently experienced performance challenges.
Critics argue that this raises questions regarding the long-term validity of some findings.
However, Collins has consistently maintained that the book examined performance during a specific period rather than predicting future outcomes indefinitely.
Business Environments Change
Markets evolve.
Technology advances.
Consumer preferences shift.
Competitive dynamics change.
Some critics suggest that the book underestimates the impact of external forces on organisational performance.
While this criticism has merit, the leadership and organisational principles outlined in the book remain highly relevant.
Success Is Often Multifactorial
Business success is rarely attributable to a single factor.
Leadership, culture, strategy, market conditions, technology and timing all play important roles.
Some critics argue that the book occasionally oversimplifies complex organisational outcomes.
Despite these criticisms, most readers agree that the core lessons remain valuable and practical.
Key Lessons for Modern Business Owners
More than twenty years after publication, several lessons from Good to Great remain especially relevant.
Leadership Matters More Than Ever
Technology continues to evolve rapidly.
Artificial intelligence is reshaping industries.
Markets are becoming increasingly competitive.
Yet leadership remains one of the strongest predictors of organisational success.
Businesses rarely outperform the quality of their leadership over sustained periods.
Culture Creates Competitive Advantage
Products can be copied.
Services can be replicated.
Technology advantages often disappear over time.
Culture is much harder to replicate.
Strong cultures continue to provide significant competitive advantages.
Accountability Drives Performance
Many organisations struggle not because of poor strategy but because of poor execution.
Clear accountability remains one of the most effective ways to improve performance.
Sustainable Growth Requires Discipline
Rapid growth without discipline often creates chaos.
Sustainable growth requires:
- Strong leadership
- Effective systems
- Accountability
- Strategic focus
- Consistent execution
These principles remain highly relevant for growing SMEs.
Practical Recommendations for SME Owners
After reading Good to Great, business owners should consider asking themselves several important questions.
Leadership Questions
- Am I building a business that can succeed without me?
- Do I demonstrate Level 5 Leadership behaviours?
- Am I developing future leaders?
People Questions
- Do I have the right people in key roles?
- Are there capability gaps within my leadership team?
- Am I addressing underperformance effectively?
Strategy Questions
- What is our Hedgehog Concept?
- What can we genuinely be best at?
- Are we focused on our core strengths?
Culture Questions
- Does our culture support accountability?
- Are our values reflected in behaviour?
- Are we creating disciplined execution?
Growth Questions
- Are we building momentum through consistent improvement?
- Are we looking for shortcuts instead of building a flywheel?
- Are we thinking long term?
These questions can provide valuable insights into areas requiring improvement.
Overall Assessment
Few business books have influenced modern management thinking as significantly as Good to Great.
The concepts introduced by Jim Collins continue to appear in:
- Boardrooms
- Leadership programs
- Strategic planning workshops
- MBA programs
- Executive coaching engagements
The book’s enduring relevance stems from the fact that its core lessons focus on timeless principles rather than short-term business trends.
Leadership.
People.
Culture.
Discipline.
Focus.
Execution.
These fundamentals remain as important today as they were when the book was first published.
Key Takeaways
- Great companies are not necessarily born great.
- Leadership is one of the most important drivers of long-term success.
- Level 5 Leaders combine humility with determination.
- The right people are more important than the right strategy.
- Focus creates competitive advantage.
- Accountability improves execution.
- Culture influences performance.
- Technology accelerates success but rarely creates it.
- Sustainable growth requires discipline.
- Long-term commitment creates momentum.
Who Should Read This Book?
This book is highly recommended for:
- SME Owners
- Founders
- Family Business Owners
- CEOs
- Managing Directors
- Board Members
- Non-Executive Directors
- Leadership Teams
- Business Advisors
- Business Coaches
- Emerging Leaders
Regardless of industry, the principles can be applied to improve organisational performance.
Final Verdict
If you only read a handful of business books throughout your career, Good to Great deserves a place on that list.
While some examples have aged and certain aspects of the research have been challenged, the core principles remain highly relevant.
The concepts of:
- Level 5 Leadership
- The Hedgehog Concept
- First Who, Then What
- The Flywheel Effect
- The Stockdale Paradox
- A Culture of Discipline
continue to provide practical guidance for leaders seeking to build stronger organisations.
For SME owners, founders and family-owned businesses, the lessons can help improve leadership effectiveness, strengthen accountability, enhance culture and support sustainable business growth.
Overall Rating
Leadership Value
★★★★★
Strategic Value
★★★★★
Practical Application
★★★★★
Relevance for SME Owners
★★★★★
Readability
★★★★★
Overall Rating
9.5/10
Conclusion
More than twenty years after its publication, Good to Great remains one of the most valuable business and leadership books ever written.
Its enduring appeal lies in its ability to combine research-based insights with practical business application.
The greatest lesson from the book is perhaps the simplest:
Great organisations are not built through luck, charisma or short-term thinking.
They are built through disciplined leadership, exceptional people, strategic focus and consistent execution over time.
For business owners seeking to build stronger organisations, develop future leaders and create lasting value, Good to Great remains essential reading.
It is not merely a book about business success.
It is a book about building organisations capable of achieving excellence over the long term.
And that lesson remains just as relevant today as it was when Jim Collins first published it.
