Chapter 7: Technology Accelerators
Today, many businesses have come to depend upon technology to increase efficiency, reduce overhead, and maximize competitive advantage. However, Collins cautions that technology should not be regarded as a potential panacea for all that ails a company. The folly of this kind of thinking was revealed in the aftermath of the crash of the tech bubble in the early 2000s. The market correction threw into sharp relief the differences between sustainable uses of the Internet to extend established businesses and ill-planned, unviable online start-ups.
Collins contends that the good-to-great companies approach the prospect of new and emerging technologies with the same prudence and careful deliberation that characterizes all of their other business decisions. Further, these companies tend to apply technology in a manner that is reflective of their "hedgehog concepts" -- typically by selecting and focusing solely upon the development of a few technologies that are fundamentally compatible with their established strengths and objectives. Collins characterizes the ideal approach to technology with the following cycle: "Pause -- Think -- Crawl -- Walk -- Run."
Chapter 8: The Flywheel and the Doom Loop
In this chapter, Collins describes two cycles that demonstrate the way that business decisions tend to accumulate incrementally in either an advantageous or a disadvantageous manner. Both, the author emphasizes, accrue over time. Despite the popular misperception that business success or failure often occurs suddenly, Collins asserts that it more typically occurs over the course of years, and that both only transpire after sufficient positive or negative momentum has been accrued.
Collins describes the advantageous business cycle that, in some cases, can foster the transition from Good to Great as "the flywheel effect." By making decisions and taking actions that reinforce and affirm the company’s "hedgehog" competencies, executives initiate positive momentum. This, in turn, results in the accumulation of tangible positive outcomes, which serve to energize and earn the investment and loyalty of the staff. This revitalization of the team serves to further build momentum. If the cycle continues to repeat in this manner, the transition from Good to Great is likely to transpire. In contrast, the doom loop is characterized by reactive decision-making, an overextension into too many diverse areas of concentration, following short-lived trends, frequent changes in leadership and personnel, loss of morale, and disappointing results.
Chapter 9: From Good to Great to Built to Last
In the concluding chapter of Good to Great, Collins makes a connection between this book and his previous work, Built to Last, which represented the findings of a six-year study into the factors that determined whether a new company would survive in the long-term. First and foremost, Collins contends that companies need a set of core values in order to achieve the kind of long-term, sustainable success that may lead to greatness. Companies need to exist for a higher purpose than mere profit generation in order to transcend the category of merely good. According to Collins, this purpose does not have to be specific -- even if the shared values that compel the company toward success are as open-ended as being the best at what they do and achieving excellence consistently, that may be sufficient as long as the team members are equally dedicated to the same set of values.
Although many of the conclusions of both of the books overlap, Collins notes that Good to Great should not be seen as the follow-up to Built to Last, which focuses on sustaining success in the long-term. Instead, Good to Great actually functions as the prequel to Built to Last. First, a company should focus on developing the foundation that is necessary to work toward greatness. Then, they can begin to apply the principles of longevity that are set forth in Built to Last.