Episode 6 - Good to Great by Jim Collins

Episode 6 of Stacks and Strategies takes on a true heavyweight in the world of business thinking—Good to Great by Jim Collins. This isn’t just a book about success; it’s a deep, research-driven breakdown of what separates companies that merely survive from those that consistently outperform over time.

In this episode, we dig into the core concepts that have made Good to Great a staple for leaders and entrepreneurs alike—Level 5 Leadership, the Hedgehog Concept, the Flywheel Effect, and the discipline required to build something that lasts. More importantly, we challenge how these ideas hold up in today’s fast-moving, AI-driven, attention-fragmented business environment.

If you're building a business, scaling a team, or trying to move from “doing well” to truly standing out, this conversation is about what it actually takes—and what most people get wrong along the way.

Let’s get into what it really means to go from good… to great.

Transcript

SPEAKER_02 0:09

Welcome to Stacks and Strategies, where we go through Stacks and Books and pull out all the strategies for business owners to apply. We're three business owners and advisors that work for small and medium-sized businesses on a regular basis. We've come together to share our passion for learning and, in particular, business learning. Knowing that business owners are very busy and their time to read is sometimes limited, and also that the volume of books is so large it makes it difficult to know what to read and what not to read. We still recommend reading for all business owners, but if we can accelerate that process or reduce some of the effort, then we know our local businesses will improve. Our goal is to highlight the quality of the content and help the reader know if it applies to them. In short, our purpose is to cut through the uncertainty so the listener can choose to apply as we've shared it. They can choose to learn more, read the book, or they can move on to some other topic so they can improve their businesses and their lives. So I'm Jimon Davis. I'm a business coach with Action Coach, and I know the businesses grow to the level of the owner, and by learning we improve. So I want to support that growth through learning. I work with owners to provide clarity on their destination, how to get there, and what they need to learn to be successful to achieve their goals. Our other hosts are Wendy Pace. Wendy, would you like to introduce yourself?

SPEAKER_01 1:17

Hi, I'm Wendy Pace, the owner of Paysetting Media, where marketing is a marathon, not a sprint. We're here to get you connected with your clients online and meet them where they're at on their social media platforms.

SPEAKER_02 1:29

Excellent. Our other host, Jess Viegas.

SPEAKER_00 1:32

Hi, Jess Viegas, Acuity Business Consultant. A QD demystifies the challenge of translating talent and resources into exceptional and sustainable organizational performance by surfacing actionable clarity and providing execution expertise in the areas of strategic design, financial management, operational excellence, and leadership development so that leadership can confidently navigate their organizations towards next level performance.

SPEAKER_02 1:57

Excellent, excellent. So this episode, the book was chosen by Wendy, and Wendy's going to walk us through her selection and uh lead our discussion. So, Wendy, take it away.

SPEAKER_01 2:10

Okay, so we read Good to Great, Why Some Companies Make the Leap and Others Don't by Jim Collins, published in 2001. So Collins is asking the question: what makes a company great? And he goes in depth and at nauseam, in my opinion, about the data collection and the 1400 companies that they talked to and looked at to compile their data, to look at how they went from good to great and what made other companies not, right? I'm just gonna put it out there. This is the first time I picked a book that I could not stand.

SPEAKER_02 2:47

Wow.

SPEAKER_01 2:48

Um, and it's not that the cut it's not that the content wasn't good. It had things that I needed to hear and to digest. It was the way it was delivered. I'm the child of an economist. And if I hear about data points one more time, I'm gonna lose my mind. So for me, it was dry. I struggled to finish this book. So just I know that you love data. How do you feel about this book?

SPEAKER_00 3:18

Yeah, so I think I was gonna say I echo some of what you say, but echo is not the right word. Maybe I'd like to sort of build off of a couple of things you said. I found difficulty in some of the data points, but not because of the dryness, but because of the basic premise, which is that they were essentially trying to determine how they operated against the market. And that's uh that's kind of an esoteric term for most small business owners. They're not trying to figure out how they operate against the market. You know? So this book sounded perfect for uh someone who's in a big company already and who says, well, I've got a lot of moving parts. I've got to organize my all my resources into uh strong and sustainable delivery of our of our value. And so it just seemed more uh it was more written for that demographic. The other thing I would say about it is there's a strange kind of piece I get when I'm thinking, wow, I don't really want to hear all of this data, but I'm glad somebody did it so that I can believe what I'm reading. And so that's like a low-that's bittersweet, right? It's like, all right, the more data you give me, the more I trust it, but I don't want to keep listening to it. But I think it's the basic premise of what the book is trying to communicate. And I would say that it's more from that standpoint that uh I didn't have difficulty with it, because I'd actually read the book a couple of times. But that's one of the reasons that was my big takeaway that a lot of companies won't relate to to some of the message.

SPEAKER_01 4:40

Aaron Powell John, what did you think?

SPEAKER_02 4:42

I was surprised. I was surprised first by by both opinions there. Um I I do agree with what Jess was saying, and and I understand what you're saying about the data. I I love the data. And to the point that really what the study was trying to do is you had this quantitative information. These stock prices have doubled, tripled, 10 times, 15 times. But what he was trying to get to was the qualitative information behind it that drove that. What is it intrinsically about those companies that made them different, other than just the results were different? Trevor Burrus, Jr. And I agree with you, Jess, that is slanted towards the bigger businesses. But as he points out early on, the reason he did that is because it was publicly available information. You couldn't get that type of information on small businesses. It was publicly available, the stock prices that he that was the measurement of what was a great company, what was a good company. Trevor Burrus, Jr. So he prefaced why it went that way. As a result, it it is oriented to a bigger company or somebody who aspires to have a bigger company with a leadership team. But I think the lessons, the quality of what he came out of it, and as you pointed out, Jess, it was the numbers that led to those results. And I think there was a lot of I don't know if I'm going to have the right term, say the personal science, the sociology behind it and how people acted and what they did, that's just what the value is, and therefore it relates to a small business owner. Now, if a small business owner maybe can't draw those connections, that's possible because it feels too abnormal. But the idea is of level five leadership and getting the right people on the bus and then deciding where you're going and all the lessons, I think they work, I think they apply. And the last thing I'll say, and I'll hush up here, this book resonated more than the first time I read it. And it's because I think I don't remember the first time I read it, but I think I was in a great company at the time, but I didn't have the perspective of realizing I was in a great company. And now having moved on a couple times, I could reread that book and go, oh my gosh, I was in that environment and I was in that environment, and I could see the differences. So it really resonated with me. So for me personally, it was a really, really good connection.

SPEAKER_01 6:48

So I'm glad you mentioned the level five leadership, because the key leaders of great companies, as far as the book is concerned, is a level five leader and they blend personal humility with professional will. So they credit success to others, take blame when things go wrong, focus on building enduring greatness rather than personal fame. For me, that's when you know that the buck stops with you. And I do this with my team. I will take my most complicated clients, my most demanding clients, and I will hold them in my own basket. Because if anything goes sideways, it's gonna fall on me. And I don't want that to hit my team in any way. And I try to be that buffer for that high demanding client. I'm not saying that that's humility, that's me just trying to control the narrative for the most part. But I feel like if it's my company, it's my responsibility to be that buffer. So I'll put it back to you, John, and then we'll go to Jess. Do you see yourself as a level five leader or have you worked with a level five leader?

SPEAKER_02 7:52

It's easier to answer the second question. I absolutely have worked with a level five leader, and I've worked with a level four leader. And right now I'm working with another level five leadership, and I can see it, right? The the willingness to work harder than anybody else. You know, I used to get in at 6 30 and he was always there. Right. And then I get in earlier and he goes, Stop trying to get in before me because you're not. I'm gonna work. Um and it wasn't a pride thing, right? He was telling me to to relax. Right. So yes, I've I worked with one in Texas. And there's a term with the third one who I'm working with, and I this may be uh maybe a credit to another author. She uses the term hungry, humble, and smart. That's in their company values. And I'm like, oh my gosh. Barbara's talking about being hungry, humble, and smart. And Gary, the first one, was hungry, humble, and smart. And I think that captures what a level five is. They're hungry, they're humble, and they're smart enough to just keep going, you know, and not give up.

SPEAKER_01 8:52

How about you, Jess?

SPEAKER_00 8:53

Yeah, that's interesting. Um, I would say that I've worked for a lot of level good level four leaders. Um I can't say particularly that I've worked with a level five leader. I will say that as I read the book, I I could see that most of the things are the types of things that I aspire to. And then I imagine someone's out there saying, oh, Jess is probably a decent level four leader. Um but you know, a lot of it is you aspire to a particular uh set of characteristics and then you you go in that direction and then you you hit it or you don't. But then what happens if you don't have a stock market to measure yourself against, you know? And uh Wendy and I were just talking a little bit off-mic a while back, and we were just talking about how you're gonna measure greatness for companies that aren't the 11 or 12 that were good to grade, uh measured against all the comparison companies. And I think that makes a lot of sense because if you think about some of the methods, like the hedgehog, it's just for the listeners, hedgehog was more a stick-tuitiveness around uh an organizing principle about how you're gonna run your business, how you're gonna operate. And they talk about process and productive hedgehog, and you have to read the book to kind of get it all. But the idea is that the hedgehog process for a company that's doing hundreds of millions of dollars versus an entrepreneur with a small team, they have to operate wildly differently. They have to be more entrepreneurial. And it's gonna be hard for them to organize around a hedgehog principle. So maybe at that level, what you're talking about is is a good focus and on the things that you know that you're gonna be good at and that you can try and be great at. And there's just some things that you're not gonna worry about, but you're gonna try a lot of things that a leader at the higher level might not try. Trevor Burrus, Jr.: Because you don't have the resources, you you you have to make some accommodations. I would say uh generally for me, the book was much more powerful for me in terms of its overarching messages in terms of the characteristics around people who are just trying to run a really good company or or a great company. For me, there's not a lot of difference for me.

SPEAKER_01 10:52

Welcome back to this uh conversation that uh Jess and I had off mic to fill you guys in. I was saying that for the small business owner, you may see yourself already as great in in the pool that you're swimming in, right? Some people might consider, for me, for instance, a marketing company, I've already exceeded my expectations from when I started paysetting media 11 years ago. So I already feel like I'm doing great because there's so many other social media marketing companies that didn't make it. So what one person might consider is my good, or I consider as my great, is something that somebody wouldn't even conceive of being able to start. Does that make sense? So I think there's a level of greatness that you have to give yourself as a small business owner just from starting something and and making it last 11 years or 12 years or however many years you've been in business. So I think greatness is your perception more so than somebody else's saying they're great.

SPEAKER_02 11:53

Yeah, it's relative, I think. Um and I think it depends on where you're going and what you're trying to accomplish. Um You're right, right? If you if your business lasts five years compared to all the other small business owners, you do great. But if your goal is to take over the world, if you will, this is what it takes.

SPEAKER_01 12:10

Right.

SPEAKER_02 12:10

But you can still learn from some of those lessons.

SPEAKER_01 12:13

There's definitely lessons.

SPEAKER_02 12:15

To realize you you think you're great, maybe you're just good. Right. And I think people that are willing to hear that and to get better to be a better leader will will take that and use it. They don't want to hear the message, they're not going to, and it's not going to matter, but they're going to be limited by that. Uh I was just listening to a podcast. It was talking about conflict, and you know, people can't read your mind. And a lot of business owners I know are surprised that their team can't read their mind. They have to recognize if they want to be a level, if they want to be a better leader, they have to recognize that as an example of being maybe they're not going to five, but if they're going from three to four that way.

SPEAKER_01 12:50

Well, since you mentioned, I'm sorry, Jessica.

SPEAKER_00 12:52

Well, I was just going to mention that one of the things that I did get uh that I thought was a positive from the book, and it's touching on what you just talked about. So that one end of the spectrum is okay, if you can be publicly traded and be on the stock market, you could beat the market by three times. You know, that's pretty it's pretty good. But if you're um like Wendy and you really feel really, really good about where you're at and the business you were at relative to where you started, and then the odds might have been against you, that's good too. That's great, too. Yeah. I think what the book does help me understand is the reflection that it forces. So for example, there were many times where I thought, well, gee, yeah, but what about and then he would end up talking about that thing. And I feel a couple of times he sort of tortured his logic into making sense for for the point he was trying to make. It didn't seem wrong or anything. It just seemed like, wow, that was a long way around, but okay, I can see it. But the point I want to make is that one danger is that because greatness, in the way Wendy described it, is relative. It's not a far leap to start then rationalizing lack of greatness, because then you start saying, well, my company is pretty great, even though in your mind you know that there's several more things you can do. So the main thing is is a reflection, is to hold yourself accountable and say, I really feel that my company is great, and not follow with in the back of my mind, my but I should probably should have done these seven or eight other things. You don't want to get into a rationalization, uh, which is easy to fall into when when things become relative, which is kind of the way life works anyway.

SPEAKER_01 14:19

So we come back to the crux of the book, which is basically don't settle. Right? Don't settle. Don't settle.

SPEAKER_02 14:25

Okay.

SPEAKER_01 14:26

You can always do and be more than what you are. And as that business owner or leading that business, you should always be striving to take your business to the next level, whatever that may be. And for some businesses it's incremental. And some businesses it's huge leaps. You had touched, John, on your team, right? And he talks about great companies start by getting the right people on the bus and the wrong people off before deciding where to drive. Right people are self-motivated and disciplined, less management is required. And for me, that hit home a lot because I take a lot of time before I hire somebody on when I'm expanding my team. And one of the things that I'm looking for is the person that I hire needs minimal supervision. I'm one of those bosses that I want to give you what you need to do, give you your tools to do it with, and then let you do it and get out of the way because I've got other things. And that's the only way I've been able to grow my business is by putting people on my team that I can just drop and go. Since you coach, John, have you ever had to have that conversation with a business owner going, This is a sore spot on your team, and this is causing the culture of this company not to be great?

SPEAKER_02 15:45

Absolutely. Every day, weekly, yesterday. I gotta be careful, right? You guys get out there. Yeah, absolutely. And uh you know, sometimes you say, Okay, an individual has an event, an episode, a situation, and you you say, Okay, well, can we coach this person or this company through it, right? And by coaching the owner to engage that person differently. But at some point it just comes up over and over and over that you just keep okay, why are we talking about this person again? Why are they still here? And most of the time it's fear. People are afraid to move on, especially right now. People are also afraid of that they can't find the right person. And well, if I if I let that person go and I don't know what my backup plan is, I can never find it, I'm gonna be stuck doing their job forever. So, yeah, absolutely. The the short answer is yes. I don't know if you want me to elaborate much more than that, but it happens repetitively. And I've also seen where once you get the right people, everything blossoms and then grows from there.

unknown 16:43

Trevor Burrus, Jr.

SPEAKER_01 16:43

Your thoughts, Jess?

SPEAKER_00 16:45

Uh yeah, I I agree with the idea of finding well, there's another there's another piece to this. There's one is you get the right people on, and then when you've got the right people on, then you start to figure out what to do because now you see what your team is capable of. So there's just a little bit of a nuance that I would put to that. Preceding all that is knowing how do you judge what the right person is. And the way you judge that is that they're going to go into the slot that's required for your business to run properly. So it's the process for me is I've got five slots. If you can start from zero, which you can rarely start from. I've got five management slots. This is what each one wants to do, uh, needs to do in a perfect world. Then I go find those people. Right. And that's a little different than go find really, really good people who can manage themselves and then start to do what you got to do. I think it's a little bit of an iterative process. But all of that is different than a lot of management mindset thinking from early in my career, which is you gotta force people into the right slots, you gotta be uh really careful, you wanna be empathic, you don't want to disrupt people's lives. And I would tend to work really hard to save an individual. And maybe it was a good idea, maybe it wasn't, but it just felt like that was the paradigm at the time. Now it seems more empathic to know the positions, hire the right individuals, so that you don't have to get to that point where you're disrupting lives and you're starting to make other people suffer for your lack of preparation, your lack of mistakes. But all of it to say there's something that says maybe it's not people first and then positions, it's positions first and then it's people.

SPEAKER_02 18:15

I think some of that also depends on the organization going back to the small and large. First off, is I think you know, to figure out that they come on, it's do they fit your values, right? Do you have to figure out do they fit your values? The larger corporations have the ability, and I've witnessed this, where somebody was a troublemaker, let's just say like it was a trouble spot, but we were able to put them in a different position, and all of a sudden they weren't a trouble spot. A big company has more positions and therefore more options. A smaller company doesn't. So when you take your team of five, if you miss on two of the hires, well, forty percent of your business is gonna be a mess. So you you don't have that ability, so you have to be better with who you let on your bus because there's only five seats on your bus. You gotta be really, really good at it. But I think it starts with the values and a small b unfortunately, I think a small business is more likely to just take those that are available with the right budget than do they really fit. So Wendy's point about hiring slow, that's the right approach that so few do for a variety of reasons.

SPEAKER_01 19:19

But I think what you see as companies grow, it will always come back to the one at the top because they set the culture. And again, it comes back to, you know, a level five leader and they set the speed, they set the pace. Sorry, pun intended. They set the pace as to how the company is gonna grow because they have to be humble enough to go, I'm not good at this, but I know I need this, and I know this person is good, or they seem to be able to do that better than me. And so for the small business owner, it's being able to take off those hats and going, okay, I need you to wear that hat, and I need you to wear that hat. And that at the end of the day comes back to the book and never settling or taking on somebody because they just fit the budget. You think you're gonna train them into the position? All of those things come together and are important, but it starts with the head. It just does.

SPEAKER_02 20:19

Absolutely. Yeah. I mentioned Gary earlier, right? And he's the one who first one who taught me. I wasn't probably many of you heard this. You hire for attitude and aptitude, right? Unfortunately, I think a lot of times we hire for experience first. Have they done X before? Right? Well, they did this before, but maybe they don't have the attitude or the right aptitude. If you get the right attitude and the right aptitude, you can apply them. But it starts with if he's hiring, if they're hiring good people, then it dominates it cascades downward. If they're not doing the right thing, nobody else is gonna do it.

SPEAKER_01 20:51

So we're gonna wrap this up. The key takeaways from the book are greatness is a conscious choice, not an accident. It begins with disciplined people followed by disciplined thoughts and disciplined actions. The journey is gradual, but no single defining moment creates greatness. Jess, what do you think of those?

SPEAKER_00 21:13

I think those are good, solid ways of being and and ways of acting. And I would say that uh in terms of giving someone strong ideas about you can be a level five leader, even if you're not a level five leader at a uh Fortune 500 company, you can be a level five leader in any company you're in. Because what fundamentally what it comes down to is making the right decisions, treating people properly, and not having your own ego and your own appetites and passion get in the way of what the right decisions. And that's just a good message for anyone. So I would say generally, the biggest takeaway for me is that it's the reflection that the book says think deeply about what it is that you're doing if you think about it. You know, find out if you're in a in a doom failed. Scope or whatever the term was. Think about why Doom Loop. If Jim calls me, I'm going to ask him to change that term. Or just the idea of just having the endurance to stick with the thing that makes sense. These are all timeless principles. So I think from that standpoint, I think there's some just excellent messaging in the book for that purpose. I have other thoughts on the practicality of it, but that's my takeaway.

SPEAKER_02 22:29

Yeah, so the the big takeaways, right? Get the right people in the bus first, right? That's the one I always remembered, right? We talked about the hedgehog. I just want to elaborate on that real quick. I think the questions that are in the hedgehog concept about can you make money at it, are you passionate about it? Can you be best in the world? There's a lot of people who dismissively say, Yeah, I got the answer to those questions. And I think the point is you have to keep seeking the answers to those questions and get deeper and deeper and deeper. And I think some people would just go, oh, this is what it is. And I don't think you're likely to get it in the first 10 seconds. And that's the whole point of the book. You have to be passionate about digging to that. Jeff mentioned the flywheel and the Doom Wheel. It's point it's worth pointing out what I did like about it is he talked about the effort it takes to move the wheel once. And each time you get it, it goes faster and faster and faster. And that's the whole point of the book. And the persistence is just keep doing it and keep going the right direction. And the business and the growth will get easier, not harder. Some people think a bigger business is harder to run than a small business. It's just different. And I just want to call out some other things I thought were interesting. Brutal facts in the Stockdale paradox. James Stockdale, who was the at the Hanoi Hilton ride, he was famous for in a presid vice presidential debate. He kind of stumbled for a variety of reasons. But he was the one about the this the people that survived in the Hanoi Hilton who were the ones who understood where they were and what it took to get there, not the people who just believed, oh, it's going to be better tomorrow. We're going to we're going to be saved tomorrow. Those are the people that didn't make it. And I think that goes to a little bit about what Jess is saying is knowing where you are and making good decisions, it doesn't happen unless you really get to the brutal facts. But you you maintain the optimism and the persistence that you're going to overcome them and be successful. So those are just some of the other things that I thought were really, really important from the book, other than what I recalled before, which was get the right people on the bus.

SPEAKER_01 24:20

So in your book stack, with the top book being the one you want to read the most and the bottom book being I'll get to it when I get to it, where do you stack this book? Aaron Ross Powell Right.

SPEAKER_02 24:31

So just be clear, five is on top, one is on the bottom, right? So for me, I gave it a four. It's probably not surprising. But I will say I don't know if the content is novel anymore. It's 20-some years old. But I I would put it almost in the business classic category. So to that effect, every owner should read it at some point. But I don't know toward Jess's point the relevance to a smaller business owner if they can see the how it applies. And also to my experience, a younger owner maybe I I don't know, I can't say it. I I read it 20 years ago and I got it, but I I didn't really get it. So a younger owner may think they got it, but they probably don't. So it may not resonate as well for smaller and younger owners. So even though it's a good idea. But I gave it a four. Because I think it's a classic and I think it's got classic lessons.

SPEAKER_01 25:21

Even though it was my choice of book, I'm giving it a two. It needs to be read. The ideas in the book are important for business. It was just not my kind of read.

SPEAKER_00 25:31

That's not for you.

SPEAKER_01 25:32

It just was not my kind of read. But that's okay.

SPEAKER_00 25:34

Just so I'm gonna give it a three, and the reason is because I think the category of you need to read it at some point. I think what John said is true, it's a classic. But there are a lot of ways that those same messages get communicated even much more creatively and much more energetically. There was nothing in this we have the benefit of high sight, but there's nothing here that makes you think, wow, I wish people would go back and remember that book from year 2000. The other thing is the other reason is because I've said on this podcast and on others my worldview is it's the journey, not the destination. Because if you think about the destination, you know, some of these companies fell into pretty ill repute afterwards. You know, they had problems with different leaders. Well, with different leaders, but that's the idea, is that if you make if you write a book about being good to great, it's pretty easy to say I'm not saying the that the eleven companies or twelve companies you picked have to be great forever, but what I'm what I'm saying is they won't be great forever. And so what you gotta draw from the book is not so much the greatness that they had in that moment, it's the greatness that comes from being a level five leader and hedgehog, things like that. So that's my uh so I give it a three.

SPEAKER_01 26:46

Jess, tell us um what we're reading next.

SPEAKER_00 26:51

Oh. Well, I'm very excited. The uh book we're gonna read next is From Strength to Strength by Arthur C. Brooks. It's a book that I've read a few years back, and I reread it, and uh just think it'll provide some interesting perspective for business owners. So I'm looking forward to that.

SPEAKER_02 27:08

Excellent. Well, thanks, Jess. Looking forward to that. Wendy, thanks for uh bringing up good to great, even though it wasn't your favorite. That's okay. So, just in conclusion, you have stacks and strategies. It's where we go through stacks of business books to pull out the strategies for business owners to learn to apply to the