Book review: Good to Great by Jim Collins

Good to Great: Why some companies make the jump… and others don’t – Jim Collins

Synopsis:
Jim Collins and his research team set out to answer the questions, “can a good company become a great company?” and “if they can, how?”. By studying countless articles, interview transcripts and data, the research team came up with a definition of a ‘great’ company. The team would study two companies that started off in similar situations with similar future prospects but in one point in time (what they call the transition point) one company skyrocketed while the other withered. The great company (the one that skyrocketed) is compared to the comparison company (the one that underperformed). The results are the basis of this book. The chapters explain concepts and principles that were consistent among all the great companies but lacking in the comparison companies.
Companies such as Wells Fargo, Gillette and Circuit City (among many others) are analysed throughout the chapters. The book concludes with a very insightful FAQ section and wealth of information in the appendices.

What I gained from reading this book:
I read this book expecting it to be very similar to The E-Myth. It turned out to be very different. I am still undecided if I like this book or not. While I could clearly see that much effort has gone into the research, I’m not too convinced on the value of the results. Some concepts seemed so obvious that it seemed a waste of time to read about them.
The main problem I had with this book is the way the concepts were explained. Phrases such as ‘Getting the right people on the bus’, ‘the hedgehog concept’, ‘the three circles’, ‘grasp the flywheel, not the doom loop’, ‘level 5 managers’ pretty much sum up the type of lingo used throughout the entire book. I was expecting straight forward explanations and was disappointed to find that most explanations followed the lines of ‘make sure you get the right people on the bus in the right seats and the wrong people off the bus’. While using metaphors continuously may work for some people, it sure didn’t work for me.
Most people could probably guess the principles and values the great companies have before even picking up the book. So I was not impressed when I came across the part where the author explains why the company that gave the executives lavish perks in expensive buildings underperformed the disciplined company that cut executive’s pay 75% when times became tough and ran the business in a dental sized suite.
Although I do feel that most of the findings could have been explained better on a single A4 sheet of paper, I did enjoy reading this book (only some parts). For example: hearing about Walgreens and how they crammed so many stores in a small area and why was very interesting.

Positives:
Provides insight into many great companies and their culture. Very thorough explanations on the principles and concepts. Plenty of information in the appendices.

Negatives:
Most concepts and principles are obvious before even reading the book. A lot of buzz words and metaphors are used that may distract rather than assist. The viability of the study and the results is questionable.

Recommended for: Small business owners
I recommend this book for small business owners to get a better understanding of the types of principles and values they should apply to their business. Although many of the principles are obvious and common sense, it always helps to read up about them to help you apply them.

Genre: Business

Overall rating: 6 out of 10 stars

Australians can buy the book by clicking the picture below:

Where to from here:
I recommend reading The E-Myth: Revisited instead of this book. Read my review to understand why.

If you have read this book, feel free to give it your own rating by posting a comment below.

Book review: Microeconomic theory (Concepts and connections) by Michael Wetzstein

Microeconomic theory: concepts and connections – Michael Wetzstein

Synopsis:
This book explains the principles of microeconomic theory. Starting from the basics in consumer preference and utility maximisation, it progressively covers more complicated topics all the way up to asymmetric information and externalities. Each chapter is ‘mapped’ out so you can see how the concepts connect to each other (hence the title). There are plenty of diagrams to graphically explain the concepts and there are plenty of tables and equations. The examples are very useful to see how the concepts are applied to situations.
Real life questions are asked throughout the chapters to show the connection between the theoretical concepts and real world use. The ‘application’ boxes provide insight to issues seen in the real world and use the concepts to explain how these issues are dealt with. For example: an application box explaining the minimum wage explains if you should be for it or oppose it.

What I gained from reading this book:
I think the best aspect in this book is the real life questions it answers. So many people don’t realise the potential use economics has in their daily life decisions. Each chapter answers specific important questions such as ‘How do we decrease our dependence on foreign oil?’, ‘Is allowing the poor to have affordable housing desirable?’, ‘Why have equal opportunity legislation?’, ‘Should you always play the lottery?’. The answers to these questions are very insightful and revealing. In addition to reading the answers, I learned how to answer similar questions on my own using economics. As you can see, economics is useful in a wide range of topics. The number one gain I made from this book was the ability to question everything I hear or see and find answers.

Positives:
Well set out and provides useful examples and studies. Provides a good connection between the concepts and real world application. A wide range of topics are dealt with in detail.

Negatives:
The book uses a lot of equations and mathematics to explain the concepts. If you don’t like maths, you won’t enjoy these explanations. Of course the book also explains the concepts through words and diagrams, so it isn’t just math.

Recommended for: People interested in economics
I recommend this book for people wanting to learn economics. Because it starts from the very basics and covers a wide range of topics, it is a good choice. On the other hand, people who always question the Government’s policies will benefit from studying economics because it will give you a good understanding of why those policies were created. Economics provides a way to analyse the choices we make and helps us better understand those choices.
Genre: Economics

Overall rating: 6 out of 10 stars

Australians can buy the book by clicking the picture below:

Where to from here:
If you decide you don’t want an in-depth book on economics and prefer to learn a general understanding of business as a whole, I recommend the following book:
MBA in a day by Steven Stralser

Alternatively, to read another book on economics, I recommend:

Freakonomics by Steven Levitt