Books, tomes, think tanks and labs have been built in the quest to determine and reveal the elements of great companies. The most famous odes to corporate dominance are non other than Collins’ Built to Last and Good to Great books.
Problem is, nearly every example of greatness in the world of business either uses a short window of assessment or reverse engineers the determination of greatness by curve-fitting a select number of high-achieving companies into a desired algorithm, then cherry-picking certain shared qualities and listing them as the essential elements of greatness.
Unfortunately, while curve fitting can identify historical similarities, it provides little predictive or instructive value. In fact, many of the companies mentioned in the above books not only suffered major stumbles after the books’ publication, but upon deeper analysis, didn’t even outperform other companies in their sectors.
Truth is, there is no such thing as a great company, there are only:
- Great ideas,
- Great moments,
- Great decisions,
- Great strategies,
- Great people, and
- Great execution
And, by definition, every one of these elements of greatness are impermanent.
A company launched and grown into a paramount by a great idea can be felled by a subsequent terrible decision, strategy or person. Witness the epic rises and falls of major players in the U.S. automotive, banking, law and dozens of other industries.
It’s never about the company, it’s about the impact of those 6 defining qualities. So, if you’re thinking of launching a business, instead of studying what unites great companies, you’d be better served by studying greatness in the context of the individual qualities and the impact of their presence and absence.
As always, just thinking out loud. Do you agree, disagree? What have I left out?
What do you think?
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