MATCH founder Michael Goldstein, now blogging on Starting an Ed School, looks at what happened over time to the companies praised in Jim Collins’ influential management book, Good to Great. After analyzing 1,435 companies, Collins 11 that had gone from “good to great.”
Corporate transformations don’t rely on a “miracle moment,” Collins wrote.
Instead, a down-to-earth, pragmatic, committed-to-excellence process—a framework—kept each company, its leaders, and its people on track for the long haul. In each case, it was the triumph of the Flywheel Effect over the Doom Loop, the victory of steadfast discipline over the quick fix.
Doom Loopers “launch change programs with huge fanfare,” then change direction. “Disappointing results lead to reaction without understanding, which leads to a new direction—a new leader, a new program—which leads to no momentum, which leads to disappointing results. It’s a steady, downward spiral.”
Many people in the K-12 world use Collins’ “ideas for how a school might go from good to great,” writes Goldstein. “Or mediocre to good. Or crappy to mediocre.” Yet urban teachers know the Doom Loop all too well.
Doom Loop is why my teacher friends in some traditional large urban schools have indigestion when they hear about any sort of “reform.”
In their direct experience, all they’ve seen is Doom Loop. More precisely, Doom Loop masquerading with claims that this time it would be Flywheel. This time. Righto.
Only two of the 11 companies in Good to Great, published in 2001, are still Great when measured by stock prices, Nucor and Philip Morris, Goldstein discovered. Five have posted average performance. One, Gillette, was bought out. That leaves three that went from Great to Lousy:
Pitney Bowes is half its market cap of 2001.
Circuit City is defunct.
Fannie Mae (securities fraud, delisted by NYSE, contributed to gigantic financial meltdown)
So does that mean Collins was wrong — or that well-managed companies couldn’t keep it up over time?