It’s Finally Time to Retire ‘Good to Great’ From the Leadership Canon

Two decades after Jim Collins’ business bestseller was published, what lessons does it really hold?

The book cover for Good to Great by Jim Collins

“I’m a Level 5 leader.” It’s a phrase I hear frequently from CEOs and senior executives, each assuming familiarity with Jim Collins’ Good to Great. It’s a safe bet; with sales of over four million copies, Collins’ 2001 work is one of the most widely read business books of the last 20 years. Its simple recipe was part of its allure. If you aim high, stay humble, hire the right people, confront brutal facts, and stay disciplined and focused on the metrics that matter while using technology with care, then your business will eventually go from being good to being great.

One of the most successful business books ever written, its publication followed in the wake of the dot-com bust, when business leaders who’d been gorging on indigestible meals of internet promises now hungered for the meat-and-potatoes wisdom Collins offered. That its lessons seemed simple came as a relief: Common sense was back; the status quo was sexy again.

Such simplicity flattered many who thought they did these things already. The beguiling conservatism of the message required no transformational change but persuaded many readers that they were already pretty good and therefore surely capable of greatness. But the book went beyond flattery; underpinning the narrative was a pseudoscientific language that imbued its operating principles with the power and inevitability of laws of nature. And if that wasn’t enough, Collins promised “timeless universal answers” to everything: not just business but to the social sector and even life itself. The message was “Seize the Collins lever, and you can move the world.”

Collins’ definition of greatness is bewilderingly arbitrary: Fortune 500 companies between 1964 and 1999 that achieved returns 6.9 times the stock market over 15 years. Out of 1,435 companies, just 11 meet these criteria. These exemplars might more accurately be called anomalies. Why consider only publicly traded companies and ignore private, family-, or employee-owned businesses? Would a 14-year run or returns 6.8 times the market make a business merely good? With globalization in full swing, the book’s parochialism is also striking: Apparently, only U.S companies are great.

But such tight parameters allow Collins to choose comparison companies that, in roughly the same time frame and markets, failed to do as well, a technique that gives the illusion of a controlled experiment. The reality is more pedestrian: His raw material is only secondhand, published information, no live observation. Choosing so small a number makes it easier for Collins, a Stanford mathematician, to deduce golden rules, but the conceit subtly sidesteps the real challenge: proving that his rules caused the successes he celebrates.

For those of us running companies, what was weird and disappointing was the absence of living detail. When I ran software startups, exhortations to be modest and never boastful were impractical in a world demanding ambition and vision and in which anything less from a woman would have been deemed an instant fail. I would have loved to settle for “nothing less than an enduring great company,” but that was not what my investors had in mind. Good to Great was a very manly book, whose male leaders embody an upright, Midwestern virtue whose strength and confidence overcame all doubt.

Collins is in love with his Level 5 leaders who reflect on their success with poise, claiming their outsize achievement just comes naturally. A Level 5 leader, Collins says, is supposed to be humble, diligent, disciplined, and responsible. I’ve met many such people, a few running outstanding businesses but many running quite ordinary ones. Collins disdains personal egos, which would rule out Bill Gates and Steve Jobs, two of the most admired leaders of their generation, as well as Elon Musk, arguably the most high-profile business leader today. This isn’t to say that the world belongs to egomaniacs; it is to say that anyone who imagines that there is just one way to be a great leader is blind to context and the complex interplay of the millions of factors that contribute to, or block, a firm’s success.

Collins insists that great companies get the right people on the bus and the wrong ones off. But how do you identify them proactively? Collins is thin on detail. Their values matter more than skills, but how can you tell? They’re unafraid to face brutal truths — but we all avoid unpleasant realities, so how do serious leaders foster candor? There’s evidence that what distinguishes high-achieving teams is the quality of connectedness between people rather than the individuals themselves, but such systemic thinking is absent from Good to Great, which inhabits a strictly linear universe. You either are Level 5 or somewhere lower on the ladder. The people on the bus are right or wrong. The toughest parts of leadership are, apparently, easy. That’s how Collins likes it.

Collins isn’t the first management thinker to imagine a company as a machine; it remains the dominant metaphor in business books perhaps because that means all the messy human stuff can be left out. Collins doesn’t care much about markets, competition, the shifting sands of cultural mores. In his quest for timeless truths, context cannot matter. But it does matter. Winston Churchill — who Collins loves to cite as an example to follow — was a great leader in wartime but not before or afterward. He saved lives in Europe but lost millions in Bengal.

Executives frequently fail in one sector while flourishing in another or even just with a different boss. Markets wildly distort and distract CEO thinking and company focus. Collins’ comparison companies throw little light on direct competition although the success of many companies frequently depends on incompetent rivals. Remaining relevant, alert to the world’s subtle shifts and turns, innovation and the role that diversity plays in it, the complexities in time, place, and people that make running a company so hard—all of these might be in Collins’ head, but they aren’t in his math. The difficult part about running a company is thinking, alone and collectively, making sense of a tumultuous world in the search for good decisions. It’s the part few see, but it’s where the action is.

I’ve watched Collins presenting his famous flywheel analogy, breathlessly dramatizing the moment when the machine works perfectly and companies take off; it’s quite a show. Great companies emerge, Collins says, from consistency, focus, and discipline; fickle, flighty contenders fall into a doom loop. But this sidesteps one of the toughest decisions in any company’s lifespan: How do you know when to change? Many leaders talk to me about the “bicycle theory” — whatever happens, just keep going — but they do so only when explaining past successes. But it’s not knowing when to change that drives many companies out of business.

In 2001, Collins’ measured approach to technology defined him as a contrarian, but in this, he’s been proved right; technology is so easily copied that its advantages become generic almost overnight. Yet it’s also here that the book shows its age. It isn’t the tech but the data it delivers that can drive the flywheel. Consistently accumulating information that is a unique and accumulative source of competitive insight, momentum, and defense has become a cheaper and faster way to lock in customers, rewarding and amplifying their loyalty. It also builds competitive defenses higher and thicker. Be as disciplined, dogged, and humble as you like; the chances of outperforming without it are remote.

Strip the engineering euphoria away, and there’s plenty of common sense in Good to Great. A Level 5 leader is really just a serious, steady, competent guy who, to borrow Robert Sutton’s phrase, isn’t an asshole. Consistency, focus, clarity, diligence, and discipline are unarguable strengths, and it would be nice to see more of them. The fundamental belief underlying the book, that execution really matters, is perhaps its greatest legacy. These ideas weren’t new when they came out, and they’re hardly new now, but Collins made them if not fashionable, at least aspirational.

Do they still matter? In a livestreamed interview this year, Collins was introduced as “the world’s most influential business thinker,” but how influential has the book proved? It is certainly hard to find the kind of leaders Collins reveres. Most CEOs are still rattled by fads and market analysts and reluctant to stand outside the crowd. If everyone’s paying bonuses, they pay bonuses. Collins’ rejection of money as a form of motivation has, sadly, never gained traction. Collins’ confidence that the right people don’t need intense supervision has been overtaken by digital management: goals, targets, KPIs, and surveillance. Neither has his disdain for geniuses, layoffs, moonshots, disruption, or celebrities prevailed; their popularity persists to this day.

Good to Great is a classic from a period when all business books were required to be upbeat, flattering their readers. Publishers didn’t expect to sell books that even suggested doubt or failure. What Good to Great does best is persuade its readers that they can be great, even if it is statistically implausible that they will be so. It’s the American dream for businesspeople, giving hope to the nervous by downplaying the complex realities of the challenge, shrinking the world, and packaging common sense as mathematically proven truths. Its values speak of a simpler and more optimistic time. But the book was written during an era of rising inequality, when many of the battles we confront today — social justice, economic polarization, and climate change — were being studiously ignored in favor of shareholder value. The belief on which the book relies, that stock price alone anoints the great, makes reading it today feel inadequate, ideological, and naive. Good in parts perhaps, but not great.

More on books from Marker:

CEO of 5 businesses, her book WILFUL BLINDNESS was called a classic; her TED talks have been seen by over 12 million people. UNCHARTED is her new book.

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