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This US book analyses the performance of 7 leading US listed companies, comparing them with 7 rival companies over the 30 years to 2002. It studies these businesses through good and bad times, and tries to distil what made the differences over these longer periods. This has real relevance for today.
It specifically looks at businesses that have out-performed their industries and the Dow/Nasdaq indexes by more than 10 times - in other words 1000%. In fact these 7 businesses exceeded the industry and share averages by 36 times over the 30 years. They include companies like Intel & Microsoft.
The book is around 300 pages long, and is an easy read, but only 200 pages are the story - the last 100 pages are the methodology employed and the very long bibliography.
Overall the view is that these super-companies have at their core, 4 behaviours that excel at over time - 3 of these are covered in full detail within the book.
Disappointingly, the fourth (Level 5 Ambition) is hardly mentioned, as readers are presumed to have read the earlier book "Good to Great". For that reason I can't give this a top score. Given that there are nearly 100 pages of notes, it would have been sensible to have a chapter on "Level 5 Ambition" to make the book a stand-alone read.
Most of these businesses were small in 1971, in many ways the equivalent of UK AIM companies - so it is interesting to see how and why they were able to become the huge global successes they did, and why other companies in their sectors failed at the same time.
It's a good reading, simple and full of examples. The method used in the analysis is explained, which is not often the case on this kind of books. The author claims that 4 key points have been found as the success factors in the companies analyzed: the 20 miles march (= stepwise progression), the bullets vs. cannonballs (= test small things before going big), building buffers (= keep a margin of safety, especially in finance), and the discipline (= follow the guidelines). However, this recipe suffers the same problem as many others: the narrative fallacy (D. Kahnemann). It is quite easy to reconstruct the cases as to support the theory one wishes to promote. The points claimed by the author are surely important for success, but are not the only ones. This leads to the other two problems: the over-simplification and the role of randomness. The parameters that may affect success (or failure) are just too many and inter-correlated in a complex cause-and-effect structure, as to support a simple 4-points theory. Indeed the author dedicates a chapter to the study of luck, but the role of randomness is not deeply analyzed and, to my opinion, generally underestimated.
Another hit by Jim Collins - although shorter than usual for his books.
As usual Jim condenses years of his teams research into something that our mortal minds can understand, using his unique mix of framework thinking and empirical research to build a case thats easy to follow and apply in your business (or see in other businesses).
Perhaps not as great as Built to Last or Good to Great (and perhaps a lot shorter - but in some ways that makes it a lot easier to get through!)
Tha is another excellent book by Jim Collins who has made understanding success in building and developing business easier. Personally I couldn't put it down. We now have all our managers and executives in our company reading this book. We are also shipping out over 1500 copies of this book to select CEOs of organisations we like to secure as our clients.