Why Some Companies Make the Leap and Others Don't - Essay Example

Abstract In the book, Good to Great: Why some companies make the leap…and others don’t, Jim Collins provide a strategic plan using which organizations can achieve successful performances. When right combination of leadership qualities is blended with strategic solutions, which also involves effective handling of circumstantial realities both within and outside the organization, it can effectively transform the organization from good to great. Here, we shall identify the philosophical assumptions underlying Collins’ research methodology along with the practical significance, as well as the effects of these assumptions on the research. Furthermore, we shall discuss how these assumptions are related to the organizational performance, along with critical observations on how the adherents of conventional leadership theory can interpret and respond to Collin’s research. Good to Great - Review Introduction The book Good to Great: Why some companies make the leap…and others don’t by Jim Collins outlines a description of how organizations as well as its employees can achieve greatness instead of being just good. It provides a critical study of how continual organizational success can transform organizations from the status quo of ‘good’ to ‘great’. Collins makes a valid assessment about the reasons behind a company’s success of becoming great, rather than settling for good. He particularly stresses that for a mediocre company to achieve superiority, it has to surpass the notion of being good enough. For this effect to occur, it is inevitable for the company to have or follow the characteristics of leadership that Collins share in his book. Philosophical assumptions In the book, Collins evaluates several philosophical assumptions regarding the success of organizations and what makes them transform from good to great. According to Collins, on acquiring the status of good enough, many companies and individuals become complacent, not venturing further to transform their status to greatness. He assumes that being good hinders the opportunity of becoming great. His notion is good will be the enemy of great, because any organization that settles for being good never develops or initiates to become great. Initially, he identifies the ‘level 5 leadership’, which is regarded to be of great value to the organization for its success. He asserts that the quality and nature of leadership is one among the significant aspects in the organization. He stresses that leadership has to be a perfect blend of competent supervision, profound humility and professional determination. (Collins, 2012). They also have to possess fanatic discipline, creativity and productivity at right combinations. He also assumes that the company has to make an effective strategic decision of putting the right person for the right job at the right time. Moreover, he mentions that the companies should have a consistent belief in those leaders’ abilities, regardless of the challenges. Collins introduces the Hedgehog Concept that stresses on analyzing one’s passion, efficacy and driving force, which would contribute to success. He relies on the assumption that the best way to transform from good to great is not about doing many things, but instead, doing the one best thing efficiently. It is essential to identify the best core solution for the company that would well accommodate its competitive advantages as well as the external changes. The author also asserts that companies must have an overarching organizational culture of discipline that would generate motivation among the employees in the interest of the firm, without the need for bureaucracy and excessive control. Having the right people with right attitude would ensure that they are motivated well and so rules and regulations become unnecessary. (Collins, 2012). Practical significance: The principle characteristics and assumptions delivered by Collins are completely within the scope of successful business practice. Companies incorporating centralized structures for accomplishing their goals have to implement these characteristics strategically, for them to achieve greatness. As mentioned by Collins, an efficient leadership model is the key ingredient for any company to turn out from mediocre to superiority. This level 5 executive has to possess a good blend of professional dedication and personal humility which is indeed identified with many successful business leaders in Collin’s research. Leaders who approach complexity with a combination of confidence and humility, by incorporating competencies and spirit can maximize the effectiveness of the circumstances. (Fullan, 2011). He has proved that such CEOs do exist by presenting evidences from real life examples through his research. He broke the conception that an efficient leader has to be a larger-than-life person with charismatic nature. He showed that even an ordinary man like Darwin E. Smith, the chief executive of Kimberly Clark, can transform a company from its fallen state into an extraordinary success. The stocks of the company rose 4 times greater than the past 20 years, outperforming all its venerable competitors. (Collins, 2012). It proved that Smith was a perfect example of a level 5 leader who excelled his business through efficient leadership skills, from merely good to great status, bringing a turnaround for Kimberly-Clark. He possessed paradoxical combination of traits with extreme personal humility and intense professional determination. The research study has proven that these leadership characteristics act as a catalyst for transforming a company from good to great. Likewise, during turbulent times and challenging situations, efficient leaders would be able to confront the brutal reality of the circumstances, at the same time, will fiercely aspire for achieving the intended goal. According to Collin’s research, the companies that made a great leap was found to have a unwavering faith on its ability to succeed, through right confrontation as well as management of the situations, and through appropriate decision-making using due diligence and facts-gathering. The research data also illustrates that companies that prioritize team-building ahead of implementing vision and strategy development is found to get transformed from good to great status quo. In addition to that, the hedgehog concept, when implemented strategically with the core business solution is deemed to drive the company to its best potential. For this purpose, it is viewed that the company has to focus on its best ability, passionate pursuit, and the impulsive force, which are the key drivers to initiate the hedgehog concept. Moreover, Collins stresses on the culture of discipline and use of technology accelerators for its successful venturing from good to great. it is observed that a disciplined corporate values, when accompanied with right balance of responsibilities and technology use would generate better employees and managers. This kind of disciplined culture and thought among the staff would bring conscious action that would transform the company’s status quo to an optimum level. Relations to the assumptions: The assumptions of Collins can be related to current business scenario in various ways. One of the latest trends in leadership and management studies is to accept the current realities and succeed under extreme competitions and unfathomable tribulations. Collins’ research started during the time of global financial crisis, and a period of Recession which swept off even the business tycoons. Through his study, he identified the characteristics of the few companies who overcame the uncertainty and succeeded to greatness. Collins had identified seven companies that rose to greatness amid uncertainty and even chaos, by performing 10 times better than their industry rivals for a period of 15 years. (Hsiao, 2013). The reason for carefully managing companies through tough times and also transforming them into greatness was mainly attributed to the leadership positions. Having an empirical basis coupled with direct observation, and practicality make the great leaders to make bold, creative moves, bounding their risks. (Collins & Hansen, 2011). Observations: There are some key points that can be observed from the assumptions of Collins for transforming a company from good to great. It is an undeniable fact that growth of a company is a long-term process, involving a variety of decision-making processes and strategies, which when implemented with strategic planning leads to greatness, while untactful and unfocused execution turns out to be ineffective, causing breakdown. Similarly, the corporate culture that arises within the firm is one of the aspects that make the company successful, as it has a direct influence and relationship with the employee motivation. Moreover, having a flawless business strategy is less important to having the right staff for the right job. It is evident that great managers hold keen attention to getting the right people rather than right strategy. Once the employees are put in place, great managers start acting about planning and strategy. This is what Collins (2012) asserts as ‘first who… then what’ in his research findings. That is, if the right people are selected for the task, it would be efficient to figure out where and how the business has to be steered, in terms of its tactics and strategy. (Crutchfield & Grant, 2012). According to Collins, people are not the major assets for the successful business, but the right people are. Thus, for great managers, it is essential to take priority on a person’s work ethics, dedication to their values, intelligence and character, before deeply analyzing on their practical skills and credentials. Similarly, who leads the company towards its goal is more important than what and how it is done to make it happen. Unlike the conventionalist leadership model, that stresses on strategic planning and decision-making as a priority, Collins’ leadership characteristics implies on the behaviors and consistency of action, rather on the action itself. Generally, Conventional leaders enact changes in a short-term basis with immediate solutions to problems and do not assiduously look out for answers to the problems and challenges regarding sustainable development. (Erpestad, n. d). With the soaring global competition, businesses are pushed ahead to perform with agility and immediacy, which is indeed an essential tactic of survival. Moreover, conventional leadership focuses on people with positions of power, while Collins’ leadership emphasizes on facilitating elite ideas for conquering new dimensions of business amid uncertainty. They are expected to strive hard for sustainability on a long-term basis, by meeting the needs of present, without compromising the future. Thus, adherents of conventionalist would respond to Collins’ research with a newfangled outlook that would take a new dimension for the leadership model among the modern businesses. Conclusion: From the assumptions and observations of the book, it could be revealed that for the company to transform from mediocre to greatness, a right combination of leadership characteristics with strategic handling of circumstantial realities is essential. Collins holds a strong assumption that there is a tremendous power in continued improvement and sustainability of a business, which would deliver spectacular results in the long-run. The author emphasizes on the fact that as business decisions tend to hoard up incrementally, the success or failure of it is accrued over time. Thus, it could be obvious that the success of a company is developed with a process of relentless push in the right direction, with cautious leadership facilitating the strategic decisions and constructing the business’ impelling force efficiently, until the level of breakthrough and beyond. References: Collins, J. (2012). Good to Great: Why Some Companies Make the Leap--and Other's Don't. Harper Business, 2012. Collins, J and Hansen, M. T. (2011). Great by Choice: Uncertainty, Chaos and Luck- Why Some Thrive Despite Them All. Random House. Crutchfield, L. R and Grant, H. M. (2012). Forces for Good, Revised and Updated: The Six Practices of High-Impact Nonprofits. John Wiley & Sons. Erpestad, M. (n. d). Rethinking Leadership. Retrieved from: http://www.earthcharterinaction.org/invent/images/uploads/Rethinking%20leadership.pdf Fullan, M. (2011). The Six Secrets of Change: What the Best Leaders do to Help their Organizations Survive and Thrive. John Wiley & Sons. Hsiao, F. (2013). Choosing to Be Great. Retrieved from: http://english.cw.com.tw/article.do?action=show&id=14237 Read More