Book Review: Good to Great by Jim Collins

I don't normally like reading business books. As a subject, business just isn't that interesting, but Good to Great is one of the exceptions. The reason, I think, is that it deals with more than just business, but also touches a little bit on psychology and relationships, both of which can drive our work.

Jim Collins led a research team seeking to uncover the reason "why some companies make the leap...and others don't," which also happens to be the subtitle of the book. Collins and his team began by identifying 11 companies that, after years of being mediocre or decent companies, became great for a sustained period. I won't bore you with the details of how they defined a great company, since that's not the interesting part of the book. Once they had their great companies, along with a set of comparison companies that failed to become great, the Collins' team conducted extensive research to uncover what the great companies did differently than those that remained simply good (or worse).

The conclusions are best described as brilliantly simple, and, I guess I'm not too surprised to see, they are often principles I've been taught all my life. Very briefly, the concepts practiced by the companies that made the leap boiled down to these: strong but humble leadership that welcomed questions and conflict; getting the right people on board before determining direction; be completely and, if necessary, brutally honest; finding out what you are passionate about and what you can do better than anyone else; having discipline of thought and action; only invest in technology that will set you apart (I know I've phrased that poorly, but it comes down to refusing to chase after every new technology - a company should not be driven by the pursuit of fancy new toys); keep pushing - don't give up - and be positive if you know you're going the right direction. Many of these principles - humility, honesty, discipline, persistence - you might recognize from another old book we've all studied (amazing how that works!).

None of the "good to great" companies had leaders who acted as the savior or who tried to drive the organization with their brilliant ideas - that's the reason they brought the good people on board. None of the companies made excuses about being "second generation" or a bad economy or, in the case of Philip Morris, an increasingly hostile social attitude toward their industry. They simply faced reality.

Collins' writing was easy to understand and his illustrations were interesting and apt. I appreciated that they used quantitative research only to back up the qualitative. That is, they didn't focus on numbers, which can be easily twisted, to conjure up points they wanted to make. They kept the numbers in reserve until they had isolated a concept that was proven by the "good to great" companies.

Good to Great is well worth reading if you are interested in business or if you care about the business for which you work. It was the best book I've read in a long time.

Book Review: The Card by Michael O'Keeffe and Teri Thompson

The Card, which carries the subtitle, "Collectors, Con Men, and the True Story of History's Most Desired Baseball Card," is about the recent history of the famous 1909 T206 Honus Wagner card. More accurately, The Card is about The Card - the Gretzky T206 Wagner, which was the first, and as far as I know, only, baseball card to sell for more than a million dollars (it sold for $2.35 million earlier this year). The card earned its nickname when hockey great Wayne Gretzky became part owner of the card in 1991.

The Card is a fun, quick book, just over 200 pages long, including appendices. Chapters detailing the history of The Card since its discovery in 1985 are intermingled with chapters about the business and history of baseball cards, players' compensation for use of their image, the history of card collecting, and, of course, Honus Wagner. The authors even make a case for Wagner as the greatest baseball player of all time. While there is some validity to their argument, it would likely be accepted by few fans outside Pittsburgh. Along with Ty Cobb and Babe Ruth, Wagner was one of only three offensive players in the National Baeball Hall of Fame's inaugural class (1936). In fact, Wagner received the same number of votes as Ruth, and more than twice the votes of Cy Young, who failed to make the cut. So while those who saw him play counted Wagner among baseball's greatest legends, very few of today's fans remember him for more than his appearance on an expensive piece of cardboard.

The T206 Wagner, while not the rarest baseball card, is the rarest card in what is probably the most desired set for collectors of vintage cards. Without going into too much detail, the controversy surrounding the card stems from its almost pristine condition. How can a piece of cardboard survive in such great condition for so many decades? Further adding to the debate, there have been questionable practices and conflicts of interest among the original buyer, auction houses, and the company and individual graders that authenticated the card.

O'Keeffe and Thompson attempt to prove that the card has been altered, and, although there is no smoking gun, I think they succeed. My guess is that most people would agree, but it will probably have little impact on the value of the card. The card's recent fame is based partly on the mystery and the controversy and partly on the intriguing cast of characters who have owned it, Wayne Gretzky being the most famous, but not necessarily the most interesting. In fact, Gretzky sold the card to Wal-Mart for use in a give-away promotion. The winner of the promotion was announced on an episode of Larry King Live, featuring a panel that included Tommy Lasorda and Barry Bonds. Other owners of the card have ties (having nothing to do with the card or the controversy) to such people as Rudy Giuliani and George H.W. Bush. All of these things, but especially the controversy, only serve to make The Card more interesting, more collectible, more valuable.

The only problem I had with the book was its National Enquirer-like tone. I shouldn't have been surprised, though, since the authors work for the New York Daily News, which seems to exist for the sole purpose of dredging up dirt on as many people as it can. That tone makes me wonder if they presented the evidence in its entirety or if they are only telling part of the story. On the positive side, the authors spent just the right amount of time on each chapter, providing sufficient information to move the story along without getting bogged down in details. I recommend this book for any fan of baseball history, even those who don't collect cards.

Organizational Thoughts

In the 1960s, Dr. Laurence Peter formulated the Peter Principle, which states that in hierarchical organizations people are promoted to their level of incompetence. Basically, the principle means that people will do a good job at every level until they are eventually promoted to a position for which they are incompetent. It sounds funny – a Dilbert-like sentiment – but the idea has been the subject of serious research. Experts have proposed numerous reasons for the existence of the Peter Principle, many of them diving deeply into psychology and sociology.

Smart organizations build safety barriers to counter the effects of the Peter Principle. The higher the position, the more the firm will inflate the prerequisites for promotion into that position. The more the firm inflates the requirements, the less likely it is for the Peter Principle to take hold.

Personal observation tells me the Peter Principle is right on the money. I was thinking about it this morning, and I found a couple extensions to the Peter Principle. At first I thought they were exceptions to the rule, but now I realize they are just further validations of the Peter Principle.

First, the Peter Principle doesn’t account for people being promoted well beyond their level of incompetence. We all know someone who was incompetent from the moment they walked into the office, yet they find their way to the highest levels of the company. Maybe this could be termed the Brown Nose Effect, or maybe it's just poor judgment on the part of management. Either way, it’s simply a matter of those who are walking proof of the Peter Principle not being able to correctly evaluate the people they choose to promote.

Second (and this one might be worth studying), is that I think the Peter Principle is subject to itself. In other words, the Peter Principle has done its work so completely in an organization that people can no longer be promoted to their level of incompetence. The Principle itself becomes incompetent to carry out its effect. For example, a person is passed over for a promotion because they are deemed too valuable in their current position. In this case, management, probably with the intent of softening the blow by affirming a person’s importance, is really admitting that in order to be promoted you need to be incompetent in your current position. When management uses this reasoning, it is a sign either of insecurity on the part of the manager or of the fact that the Peter Principle has so saturated the organization with incompetence that the principle itself no longer works.

Either of these two instances, but particularly the second, may be a sign of rough roads ahead. Major reconstruction may be necessary to eradicate the workings of the Peter Principle.