That key business ratio, says Mr. Collins’s former collaborator, Jerry Porras, “is one of Jim’s most substantial contributions. It’s worth the whole book. Most managers couldn’t tell you what the key denominator, the critical ‘per something’ in their business, would be if you asked. But having a clear sense of that is super critical.”
Ideas like these seem reasonable, even obvious, when spelled out. But they are largely unpracticed in most companies. Moreover, they make most conventional management seem frivolous. As Mr. Collins puts it at the end of Good to Great: “Most of what we are doing [in business] is a waste of energy. If we … pretty much ignored or stopped doing [it], our lives would be simpler and our results vastly improved.” In other words, no dramatic new programs. No reengineering. No flamboyant technological initiatives. No top-to-bottom downsizings.
And none of the Sturm und Drang that people associate with, say, a Lee Iacocca, a Stanley Gault, or an Al Dunlap, all of whom Mr. Collins singles out for stinging criticism. Mr. Iacocca is portrayed in Good to Great as a promoter of his ego over the Chrysler Corporation’s long-term health; Mr. Gault as someone who fostered Rubbermaid Inc.’s dependency on him, so much so that it could not survive his leaving; Mr. Dunlap as beneath contempt. Commenting on the high-profile Jack Welch, Mr. Collins notes that all the good-to-great leaders produced better results than Mr. Welch, some by a significant margin.
The Level 5 Leader embodies a different kind of personality; this is a person who puts the advancement of the company above his or her own reputation, who tends to attribute his or her success to luck but accepts all responsibility for meeting challenges, who operates with strength and humility, and who builds loyalty and trust through quiet but purposeful action.
“Good is the enemy of great,” says Mr. Collins to the 200-plus assembled faculty, students, and alumni from the Wharton School of Business at the University of Pennsylvania. It’s a morning in May 2001; he is the sold-out keynote speaker at the school’s annual conference on leadership. “Most people will look back and realize they did not have a great life,” he says to the crowd, “because it’s just so easy to settle for a good life.” He adds that most people don’t think it’s even possible to move from mediocrity to greatness: Those who are great are born great, aren’t they?
Onstage, Jim Collins is the kind of speaker Pinocchio might have grown up to be, after gaining humanity. Mr. Collins is a boyish and energetic figure, but as he begins his talk he stands stiffly and a bit awkwardly, pronouncing his words at first with the clipped, precise tones of the software engineer he once was. Then he starts telling a story, and suddenly his arms and shoulders acquire the grace and fluidity of a man who is — and lives with — a great athlete. Mr. Collins’s wife, Joanne Ernst, is a Stanford MBA who won the 1985 Hawaii Ironman Triathlon. (She may be best known for her appearance in a Nike ad that same year saying, “And by the way, stop eating like such a pig.”) He refers to her as “the person I work for.”
“We’ve been married 20 years and we have 50–50 ownership,” he says. “But she holds all the voting shares.” Actually, Mr. Collins makes no major decision without the unanimous agreement of a triumvirate consisting of Ms. Ernst, Mr. Collins himself, and his longstanding research associate, Brian Bagley — a group he refers to as his “executive council.”