Over the last 30 years there has been a massive output on books, magazines and now websites and blogs all with a message or theory about business and organizations. As a part of this there is an abundance of “fads”, concepts and silver bullets – all to “make business better”- people more aware – developing better leaders and managers – it is an industry in its own right.
Just reflect on Management by Objectives– In Search of Excellence – Total Quality Management– Activity Based Costing -Business Process Re-engineering –Lean – 6 Sigma –triple bottom line reporting and a myriad of other business ideas – all promoted by Consulting Groups, Academic systems and the publishing industry.
In addition many CEO’s have gone on the record to document their outstanding business successes. Some business leaders (founders) have a mythology around them such that everything they have said and or say has assumed the status of gospel –Jobs, Gates, Buffett. You can add to the list!
The book publications are endless! Just visit any airport bookstore to see the range available – all selling and or promoting a way to do business.
One of the many authors to emerge is James Collins. Based on serious research he has written a number of books:
- Beyond Entrepreneurship (1992)
- Built to Last (1994)
- Good to Great (2001)
- How the Mighty Fall (2009)
- Great by Choice (2012)
While there are many “great” business authors – few have put together the body of research as substantial as Jim Collins.
The concept of greatness is one that we all can grasp at some level.
The body of work Collins has produced has not only defined greatness in absolute terms – he has identified a number of criteria for great businesses.
In his work Good to Great defines Greatness:
“The good-to-great examples that made the final cut into the study attained extraordinary results, averaging cumulative stock returns 6.9 times the general market in the 15 years following their transition points. To put this in perspective, General Electric (considered by many to be the best-led company in America at the end of the 20th century) outperformed the market by 2.8 times over the 15-year period 1985-2000.) Further more if you invested $1 in a Mutual fund of the Good to Great companies in 1965, holding each company at the General market rate until the date of transition and simultaneously invested $1 in a general market stock fund, your $1 in the g t g fund taken out in Jan 2000 would have multiplied by 471 times compared to 56 times in the market.” Page 3
Good to Great, James Collins 2001
Just pondering this – it is an extraordinary standard – “averaging cumulative stock returns 6.9 times the general market – in the 15 years following their transition points.
So there is the standard or the benchmark. GREATNESS?
So In Australian business what is the standard for greatness in business? If research has been done it is not published widely – and if research has not been done why is that?
We talk about great sporting teams – St George (rugby league) in the 50’s/60’s – the Invincibles (cricket) 1948
We talk about great racehorses – Phar lap; Tulloch; Black Caviar
We recognise Great sports people – even celebrate them!
But recognising Great businesses and/ or great business people – this seems to be beyond us?
In general terms, the word “great” implies “well above average” – outstanding!
Does it mean we do not have great businesses – or does it mean we place little value on them?
It seems to me that Australians are more interested in things other than business – the chance of us talking about great businesses as we talk about great sporting teams or great business leaders is remote at best!