From Good To Great To Built To Last - Good to Great: Why Some Companies Make the Leap... and Others Don't - Jim Collins

Good to Great: Why Some Companies Make the Leap... and Others Don't, 1st Edition Hardcover - Jim Collins (2001)

Chapter 9. From Good To Great To Built To Last

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It is your Work in life that is the ultimate seduction.

—PABLO PICASSO1

When we began the Good to Great research project, we confronted a dilemma: How should we think about the ideas in Built to Last while doing the Good to Great research?

Briefly, Built to Last, based on a six-year research project conducted at Stanford Business School in the early 1990s, answered the question, What does it take to start and build an enduring great company from the ground up? My research mentor and coauthor Jerry I. Porras and I studied eighteen enduring great companies—institutions that stood the test of time, tracing their founding in some cases back to the 1800s, while becoming the iconic great companies of the late twentieth century. We examined companies like Procter & Gamble (founded in 1837), American Express (founded in 1850), Johnson & Johnson (founded in 1886), and GE (founded in 1892). One of the companies, Citicorp (now Citigroup), was founded in 1812, the same year Napoleon marched into Moscow! The “youngest” companies in the study were Wal-Mart and Sony, which trace their origins back to 1945. Similar to this book, we used direct comparison companies—3M versus Norton, Walt Disney versus Columbia Pictures, Marriott versus Howard Johnson, and so forth—for eighteen paired comparisons. In short, we sought to identify the essential distinctions between great companies and good companies as they endure over decades, even centuries.

When I had the first summer research team assembled for the good-to-great project, I asked, “What should be the role of Built to Last in doing this study?”

“I don’t think it should play any role,” said Brian Bagley. “I didn’t join this team to do a derivative piece of work.”

“Neither did I,” added Alyson Sinclair. “I’m excited about a new project and a new question. It wouldn’t be very fulfilling to just fill in the pieces of your other book.”

“But wait a minute,” I responded. “We spent six years on the previous study. It might be helpful to build on our previous work.”

“I seem to recall that you got the idea for this study when a McKinsey partner said that Built to Last didn’t answer the question of how to change a good company into a great one,” noted Paul Weissman. “What if the answers are different?

Back and forth, to and fro, the debate continued for a few weeks. Then Stefanie Judd weighed in with the argument that swayed me. “I love the ideas in Built to Last and that’s what worries me,” she said. “I’m afraid that if we start with BTL as the frame of reference, we’ll just go around in circles, proving our own biases.” It became clear that there would be substantially less risk in starting from scratch, setting out to discover what we would, whether it matched previous work or not.

Early in the research, then, we made a very important decision. We decided to conduct the research for Good to Great as if Built to Last didn’t exist. This was the only way to clearly see the key factors in transforming a good company into a great one with minimal bias from previous work. Then we could return to ask, “How, if at all, do the two studies relate?”

Now, five years later, with this book complete, we can stand back to look at the two works in the context of each other. Surveying across the two studies, I offer the following four conclusions:

1. When I consider the enduring great companies from Built to Last, I now see substantial evidence that their early leaders followed the good-to-great framework. The only real difference is that they did so as entrepreneurs in small, early-stage enterprises trying to get off the ground, rather than as CEOs trying to transform established companies from good to great.

2. In an ironic twist, I now see Good to Great not as a sequel to Built to Last, but as a prequel. Apply the findings in this book to create sustained great results, as a start-up or an established organization, and then apply the findings in Built to Last to go from great results to an enduring great company.

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3. To make the shift from a company with sustained great results to an enduring great company of iconic stature, apply the central concept from Built to Last: Discover your core values and purpose beyond just making money (core ideology) and combine this with the dynamic of preserve the core/stimulate progress.

4. A tremendous resonance exists between the two studies; the ideas from each enrich and inform the ideas in the other. In particular, Good to Great answers a fundamental question raised, but not answered, in Built to Last: What is the difference between a “good” BHAG (Big Hairy Audacious Goal) and a “bad” BHAG?

GOOD TO GREAT IN THE EARLY STAGES OF BUILT TO LAST

Looking back on the Built to Last study, it appears that the enduring great companies did in fact go through a process of buildup to breakthrough, following the good-to-great framework during their formative years.

Consider, for example, the buildup-breakthrough flywheel pattern in the evolution of Wal-Mart. Most people think that Sam Walton just exploded onto the scene with his visionary idea for rural discount retailing, hitting breakthrough almost as a start-up company. But nothing could be further from the truth.

Sam Walton began in 1945 with a single dime store. He didn’t open his second store until seven years later. Walton built incrementally, step by step, turn by turn of the flywheel, until the Hedgehog Concept of large discount marts popped out as a natural evolutionary step in the mid-1960s. It took Walton a quarter of a century to grow from that single dime store to a chain of 38 Wal-Marts. Then, from 1970 to 2000, Wal-Mart hit breakthrough momentum and exploded to over 3,000 stores with over $150 billion (yes, billion) in revenues.2 Just like the story of the chicken jumping out of the egg that we discussed in the flywheel chapter, Wal-Mart had been incubating for decades before the egg cracked open. As Sam Walton himself wrote:

Somehow over the years people have gotten the impression that Wal-Mart was... just this great idea that turned into an overnight success. But...it was an outgrowth of everything we’d been doing since [1945].... And like most overnight successes, it was about twenty years in the making.3

If there ever was a classic case of buildup leading to a Hedgehog Concept, followed by breakthrough momentum in the flywheel, Wal-Mart is it. The only difference is that Sam Walton followed the model as an entrepreneur building a great company from the ground up, rather than as a CEO transforming an established company from good to great. But it’s the same basic idea.4

Hewlett-Packard provides another excellent example of the good-to-great ideas at work in the formative stages of a Built to Last company. For instance, Bill Hewlett and David Packard’s entire founding concept for HP was not what, but who—starting with each other. They’d been best friends in graduate school and simply wanted to build a great company together that would attract other people with similar values and standards. The founding minutes of their first meeting on August 23, 1937, begin by stating that they would design, manufacture, and sell products in the electrical engineering fields, very broadly defined. But then those same founding minutes go on to say, “The question of what to manufacture was postponed....”5

Hewlett and Packard stumbled around for months trying to come up with something, anything, that would get the company out of the garage. They considered yacht transmitters, air-conditioning control devices, medical devices, phonograph amplifiers, you name it. They built electronic bowling alley sensors, a clock-drive for a telescope, and an electronic shock jiggle machine to help overweight people lose weight. It didn’t really matter what the company made in the very early days, as long as it made a technical contribution and would enable Hewlett and Packard to build a company together and with other like-minded people.6 It was the ultimate “first who... then what” start-up.

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Later, as Hewlett and Packard scaled up, they stayed true to the guiding principle of “first who.” After World War II, even as revenues shrank with the end of their wartime contracts, they hired a whole batch of fabulous people streaming out of government labs, with nothing specific in mind for them to do. Recall Packard’s Law, which we cited in chapter 3: “No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company.” Hewlett and Packard lived and breathed this concept and obtained a surplus of great people whenever the opportunity presented itself.

Hewlett and Packard were themselves consummate Level 5 leaders, first as entrepreneurs and later as company builders. Years after HP had established itself as one of the most important technology companies in the world, Hewlett maintained a remarkable personal humility. In 1972, HP vice president Barney Oliver wrote in a recommendation letter to the IEEE Awards Board for the Founders Award:

While our success has been gratifying, it has not spoiled our founders. Only recently, at an executive council meeting, Hewlett remarked: “Look, we’ve grown because the industry grew. We were lucky enough to be sitting on the nose when the rocket took off. We don’t deserve a damn bit of credit.” After a moment’s silence, while everyone digested this humbling comment, Packard said: “Well, Bill, at least we didn’t louse it up completely.”7

Shortly before his death, I had the opportunity to meet Dave Packard. Despite being one of Silicon Valley’s first self-made billionaires, he lived in the same small house that he and his wife built for themselves in 1957, overlooking a simple orchard. The tiny kitchen, with its dated linoleum, and the simply furnished living room bespoke a man who needed no material symbols to proclaim “I’m a billionaire. I’m important. I’m successful.” “His idea of a good time,” said Bill Terry, who worked with Packard for thirty-six years, “was to get some of his friends together to string some barbed wire.”8 Packard bequeathed his $5.6 billion estate to a charitable foundation and, upon his death, his family created a eulogy pamphlet, with a photo of him sitting on a tractor in farming clothes. The caption made no reference to his stature as one of the great industrialists of the twentieth century.9 It simply read: “David Packard, 1912-1996, Rancher, etc.” Level 5, indeed.

CORE IDEOLOGY : THE EXTRA DIMENSION OF ENDURING GREATNESS

During our interview with Bill Hewlett, we asked him what he was most proud of in his long career. “As I look back on my life’s work,” he said, “I’m probably most proud of having helped create a company that by virtue of its values, practices, and success has had a tremendous impact on the way companies are managed around the world.”10 The “HP Way,” as it became known, reflected a deeply held set of core values that distinguished the company more than any of its products. These values included technical contribution, respect for the individual, responsibility to the communities in which the company operates, and a deeply held belief that profit is not the fundamental goal of a company. These principles, while fairly standard today, were radical and progressive in the 1950s. David Packard said of businessmen from those days, “While they were reasonably polite in their disagreement, it was quite evident that they firmly believed that I was not one of them, and obviously not qualified to manage an important enterprise.”11

Hewlett and Packard exemplify a key “extra dimension” that helped elevate their company to the elite status of an enduring great company, a vital dimension for making the transition from good to great to built to last. That extra dimension is a guiding philosophy or a “core ideology,” which consists of core values and a core purpose (reason for being beyond just making money). These resemble the principles in the Declaration of Independence (“We hold these truths to be self-evident”)—never perfectly followed, but always present as an inspiring standard and an answer to the question of why it is important that we exist.

Enduring great companies don’t exist merely to deliver returns to shareholders. Indeed, in a truly great company, profits and cash flow become like blood and water to a healthy body: They are absolutely essential for life, but they are not the very point of life.

We wrote in Built to Last about Merck’s decision to develop and distribute a drug that cured river blindness. This painful disease afflicted over a million people with parasitic worms that swarm through the eyes to cause blindness. Because those who had the disease—tribal people in remote places like the Amazon—had no money, Merck initiated the creation of an independent distribution system to get the drug to remote villages and gave the drug away free to millions of people around the world.12

To be clear, Merck is not a charity organization, nor does it view itself as such. Indeed, it has consistently outperformed the market as a highly profitable company, growing to nearly $6 billion in profits and beating the market by over ten times from 1946 to 2000. Yet, despite its remarkable financial performance, Merck does not view its ultimate reason for being as making money. In 1950, George Merck 2d, son of the founder, set forth his company’s philosophy:

We try to remember that medicine is for the patient....It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.13

An important caveat to the concept of core values is that there are no specific “right” core values for becoming an enduring great company. No matter what core value you propose, we found an enduring great company that does not have that specific core value. A company need not have passion for its customers (Sony didn’t), or respect for the individual (Disney didn’t), or quality (Wal-Mart didn’t), or social responsibility (Ford didn’t) in order to become enduring and great. This was one of the most paradoxical findings from Built to Lastcore values are essential for enduring greatness, but it doesnt seem to matter what those core values are. The point is not what core values you have, but that you have core values at all, that you know what they are, that you build them explicitly into the organization, and that you preserve them over time.

This notion of preserving your core ideology is a central feature of enduring great companies. The obvious question is, How do you preserve the core and yet adapt to a changing world? The answer: Embrace the key concept of preserve the core/stimulate progress.

Enduring great companies preserve their core values and purpose while their business strategies and operating practices endlessly adapt to a changing world. This is the magical combination of “preserve the core and stimulate progress.”

The story of Walt Disney exemplifies this duality. In 1923, an energetic twenty-one-year-old animator moved from Kansas City to Los Angeles and tried to get a job in the movie business. No film company would hire him, so he used his meager savings to rent a camera, set up a studio in his uncle’s garage, and begin making animated cartoons. In 1934, Mr. Disney took the bold step, never before taken, to create successful full-length animated feature films, including Snow White, Pinocchio, Fantasia, and Bambi. In the 1950s, Disney moved into television with the Mickey Mouse Club. Also in the 1950s, Walt Disney paid a fateful visit to a number of amusement parks and came away disgusted, calling them “dirty, phony places, run by tough-looking people.”14 He decided that Disney could build something much better, perhaps even the best in the world, and the company launched a whole new business in theme parks, first with Disneyland and later with Walt Disney World and EPCOT Center.

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Over time, Disney theme parks have become a cornerstone experience for many families from all over the world.

Throughout all these dramatic changes—from cartoons to full-length feature animation, from the Mickey Mouse Club to Disney World—the company held firmly to a consistent set of core values that included passionate belief in creative imagination, fanatic attention to detail, abhorrence of cynicism, and preservation of the “Disney Magic.” Mr. Disney also instilled a remarkable constancy of purpose that permeated every new Disney venture—namely, to bring happiness to millions, especially children. This purpose cut across national borders and has endured through time. When my wife and I visited Israel in 1995, we met the man who brought Disney products to the Middle East. “The whole idea,” he told us with pride, “is to bring a smile to a child’s face. That’s really important here, where there aren’t enough smiles on the children.” Walt Disney provides a classic case of preserve the core and stimulate progress, holding a core ideology fixed while changing strategies and practices over time, and its adherence to this principle is the fundamental reason why it has endured as a great company.

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GOOD BHAGS , BAD BHAGS , AND OTHER CONCEPTUAL LINKS

In the table on page 198, I’ve outlined a sketch of conceptual links between the two studies. As a general pattern, the Good-to-Great ideas appear to lay the groundwork for the ultimate success of the Built to Last ideas. I like to think of Good to Great as providing the core ideas for getting a flywheel turning from buildup through breakthrough, while Built to Last outlines the core ideas for keeping a flywheel accelerating long into the future and elevating a company to iconic stature. You will notice in examining the table that each of the Good-to-Great findings enables all four of the key ideas from Built to Last. To briefly review, those four key ideas are:

1. Clock Building, Not Time Telling. Build an organization that can endure and adapt through multiple generations of leaders and multiple product life cycles; the exact opposite of being built around a single great leader or a single great idea.

2. Genius of AND. Embrace both extremes on a number of dimensions at the same time. Instead of choosing A OR B, figure out how to have A AND B—purpose AND profit, continuity AND change, freedom AND responsibility, etc.

3. Core Ideology. Instill core values (essential and enduring tenets) and core purpose (fundamental reason for being beyond just making money) as principles to guide decisions and inspire people throughout the organization over a long period of time.

4. Preserve the Core/Stimulate Progress. Preserve the core ideology as an anchor point while stimulating change, improvement, innovation, and renewal in everything else. Change practices and strategies while holding core values and purpose fixed. Set and achieve BHAGs consistent with the core ideology.

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I am not going to belabor all the links from the above table, but I would like to highlight one particularly powerful link: the connection between BHAGs and the three circles of the Hedgehog Concept. In Built to Last, we identified BHAGs as a key way to stimulate progress while preserving the core. A BHAG (pronounced bee-hag, short for “Big Hairy Audacious Goal”) is a huge and daunting goal—like a big mountain to climb. It is clear, compelling, and people “get it” right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating team spirit as people strive toward a finish line. Like the 1960s NASA moon mission, a BHAG captures the imagination and grabs people in the gut.

However, as exciting as BHAGs are, we left a vital question unanswered. What is the difference between a bad BHAG and a good BHAG? Swimming from Australia to New Zealand would be a BHAG for me, but it would also kill me! We can now offer an answer to that question, drawing directly from the study of good-to-great companies.

Bad BHAGs, it turns out, are set with bravado; good BHAGs are set with understanding. Indeed, when you combine quiet understanding of the three circles with the audacity of a BHAG, you get a powerful, almost magical mix.

A superb example of this comes from Boeing in the 1950s. Until the early 1950s, Boeing focused on building huge flying machines for the military— the B-17 Flying Fortress, the B-29 Superfortress, and the B-52 intercontinental jet bomber Stratofortress.15 However, Boeing had virtually no presence in the commercial aircraft market, and the airlines showed no interest in buying aircraft from Boeing. (“You make great bombers up there in Seattle. Why don’t you just stick with that,” they said in response to Boeing’s inquiries.) Today, we take for granted that most air travel takes place on Boeing jets, but in 1952, almost no one outside the military flew on Boeing.16

Wisely, through the 1940s, Boeing had stayed away from the commercial sphere, an arena in which McDonnell Douglas had vastly superior abilities in the smaller, propeller-driven planes that composed the commercial fleet.17In the early 1950s, however, Boeing saw an opportunity to leapfrog McDonnell Douglas by marrying its experience with large aircraft to its understanding of jet engines. Led by a Level 5 leader named Bill Allen, Boeing executives debated the wisdom of moving into the commercial sphere. They came to understand that, whereas Boeing could not have been the best commercial plane maker a decade earlier, the cumulative experience in jets and big planes they had gained from military contracts now made such a dream possible. They also came to see that the economics of commercial aircraft would be vastly superior to the military market and—of no small importance—they were just flat-out turned on by the whole idea of building a commercial jet.

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So, in 1952, Bill Allen and his team made the decision to spend a quarter of the company’s entire net worth to build a prototype jet that could be used for commercial aviation.18 They built the 707 and launched Boeing on a bid to become the leading commercial aviation company in the world. Three decades later, after producing five of the most successful commercial jets in history (the 707, 727, 737, 747, and 757), Boeing stood as the absolute, unquestioned greatest company in the commercial airplane industry, worldwide.19 Not until the late 1990s would Boeing’s number one position be seriously challenged, and it would take a government consortium in the form of Airbus to do it.20

Here is the key point: Boeing’s BHAG, while huge and daunting, was not any random goal. It was a goal that made sense within the context of the three circles. Boeing’s executives understood with calm, equanimity that (1) the company could become the best in the world at commercial jet manufacturing even though it had no presence in the market, (2) the shift would significantly improve Boeing’s economics by increasing profit per aircraft model, and (3) the Boeing people were very passionate about the idea. Boeing acted with understanding, not bravado, at this pivotal moment in its history, and that is one of the key reasons why it endured as a great company.

The Boeing case underscores a key point: To remain great over time requires, on the one hand, staying squarely within the three circles while, on the other hand, being willing to change the specific manifestation of what’s inside the three circles at any given moment. Boeing in 1952 never left the three circles or abandoned its core ideology, but it created an exciting new BHAG and adjusted its Hedgehog Concept to include commercial aircraft.

The three circle/BHAG framework provides one powerful example of how the ideas from the two studies link together, and I’d like to offer it here as a practical tool for creating this link within your own organization. Yet it alone will not make your company great and lasting. To create an enduring great company requires all the key concepts from both studies, tied together and applied consistently over time. Furthermore, if you ever stop doing any one of the key ideas, your organization will inevitably slide backward toward mediocrity. Remember, it is much easier to become great than to remain great. Ultimately, the consistent application of both studies, one building upon the other, gives the best chance for creating greatness that lasts.

WHY GREATNESS?

During a break at a seminar that I gave to a group of my ex-students from Stanford, one came up to me, brow furrowed. “Maybe I’m just not ambitious enough,” he said. “But I don’t really want to build a huge company. Is there something wrong with that?”

“Not at all,” I replied. “Greatness doesn’t depend on size.” I then told him about Sina Simantob, who runs the building where I have my research laboratory. Sina has created a truly great institution. It’s an old 1892 redbrick school building that has been renovated into the most extraordinary space, decorated and maintained with tremendous attention to detail, bordering on perfection. By one definition of results—attracting the most interesting people in Boulder, setting a standard that other local buildings measure themselves against, and generating the highest profit per foot of space—his small enterprise is truly a great institution in my hometown. Simantob has never defined greatness by size, and there is no reason for him to.

The student paused for a moment, then said: “Okay, I accept that I don’t need to build a big company in order to have a great company. But even so, why should I try to build a great company? What if I just want to be successful?”

The question brought me up short. This was not a lazy person asking; he’d started his own business as a young man, put himself through law school, and after graduate school became a driven entrepreneur. He has remarkable energy, an intense and infectious enthusiasm. Of all the students I’ve known over the years, he is one that I have little doubt will be enormously successful. Yet he questions the whole idea of trying to build something great and lasting.

I can offer two answers.

First, I believe that it is no harder to build something great than to build something good. It might be statistically more rare to reach greatness, but it does not require more suffering than perpetuating mediocrity. Indeed, if some of the comparison companies in our study are any indication, it involves less suffering, and perhaps even less work. The beauty and power of the research findings is that they can radically simplify our lives while increasing our effectiveness. There is great solace in the simple fact of clarity—about what is vital, and what is not.

Indeed, the point of this entire book is not that we should “add” these findings to what we are already doing and make ourselves even more overworked. No, the point is to realize that much of what we’re doing is at best a waste of energy. If we organized the majority of our work time around applying these principles, and pretty much ignored or stopped doing everything else, our lives would be simpler and our results vastly improved.

Let me illustrate this point with a nonbusiness example, the last story of the book. The coaching staff of a high school cross-country running team recently got together for dinner after winning its second state championship in two years. The program had been transformed in the previous five years from good (top twenty in the state) to great (consistent contenders for the state championship, on both the boys’ and girls’ teams).

“I don’t get it,” said one of the coaches. “Why are we so successful? We don’t work any harder than other teams. And what we do is just so simple. Why does it work?”

He was referring to the Hedgehog Concept of the program, captured in the simple statement: We run best at the end. We run best at the end of workouts. We run best at the end of races. And we run best at the end of the season, when it counts the most. Everything is geared to this simple idea, and the coaching staff knows how to create this effect better than any other team in the state. For example, they place a coach at the 2-mile mark (of a 3.1-mile race) to collect data as the runners go past. But unlike most teams, which collect time splits (minutes-per-mile running pace), this team collects place splits (what place the runners are in as they go by). Then the coaches calculate not how fast the runners go, but how many competitors they pass at the end of the race, from mile 2 to the finish. They then use this data to award “head bones” after each race. (Head bones are beads in the shape of shrunken skulls, which the kids make into necklaces and bracelets, symbolizing their vanquished competitors.) The kids learn how to pace themselves, and race with confidence: “We run best at the end,” they think at the end of a hard race. “So, if I’m hurting bad, then my competitors must hurt a whole lot worse!”

Of equal importance is what they don’t waste energy on. For example, when the head coach took over the program, she found herself burdened with expectations to do “fun programs” and “rah-rah stuff” to motivate the kids and keep them interested—parties, and special trips, and shopping adventures to Nike outlets, and inspirational speeches. She quickly put an end to nearly all that distracting (and time-consuming) activity. “Look,” she said, “this program will be built on the idea that running is fun, racing is fun, improving is fun, and winning is fun. If you’re not passionate about what we do here, then go find something else to do.” The result: The number of kids in the program nearly tripled in five years, from thirty to eighty-two.

Before the boys’ team won the first-ever state cross-country championship in the school’s history, she didn’t explicitly set the goal or try to “motivate” the kids toward it. Instead, she let the kids gain momentum, seeing for themselves—race by race, week by week—that they could beat anyone in the state. Then, one day out on a training run, one boy said to his teammates, “Hey, I think we could win state.” “Yeah, I think so, too,” said another. Everyone kept running, the goal quietly understood. The coaching staff never once mentioned the state championship idea until the kids saw for themselves that they could do it.

This created the strongest culture of discipline possible, as the seven varsity runners felt personally responsible for winning state—a commitment made not to the coaches, but to each other. One team member even called all of his teammates the night before the state race, just to make sure they were all getting ready for bed early. (No need for the coaches to be disciplinarians on this team.) Hammering through the last mile, passing competitors (“We run best at the end!”), each kid hurt, but knew it would hurt a lot more if he had to look his teammates in the eyes as the only one who failed to come through. No one failed, and the team beat every other team at the state meet by a large margin.

The head coach began rebuilding the whole program around the idea of “first who.” One of the assistant coaches is a 300-pound ex-shot-putter (hardly the image of a lean distance runner), but he is without question the right who: He shares the values and has the traits needed to help build a great team. As the program built momentum, it attracted more kids and more great coaches. People want to be part of this spinning flywheel; they want to be part of a championship team; they want to be part of a first-class culture. When the cross-country team posts yet another championship banner in the gym, more kids sign up, the gene pool deepens, the team gets faster, which produces more championships, which attracts more kids, which creates even faster teams, and so forth and so on, in the infectious flywheel effect.

Are these coaches suffering more than other teams to create a great program? Are they working harder? No! In fact, all the assistant coaches have full-time professional jobs outside of coaching—engineers, computer technicians, teachers—and they work for essentially no pay, carving precious time out of their busy lives to be part of building a great program. They’re just focusing on the right things, and not the wrong things. They’re doing virtually everything we write about in this book, within their specific situation, and not wasting time on anything that doesn’t fit. Simple, clean, straightforward, elegant—and a heck of a lot of fun.

The point of this story is that these ideas work. When you apply them in any situation, they make your life and your experience better, while improving results. And along the way, you just might make what you’re building great. So, I ask again: If it’s no harder (given these ideas), the results better, and the process so much more fun—well, why wouldn’t you go for greatness?

To be clear, I am not suggesting that going from good to great is easy, or that every organization will successfully make the shift. By definition, it is not possible for everyone to be above average. But I am asserting that those who strive to turn good into great find the process no more painful or exhausting than those who settle for just letting things wallow along in mind-numbing mediocrity. Yes, turning good into great takes energy, but the building of momentum adds more energy back into the pool than it takes out. Conversely, perpetuating mediocrity is an inherently depressing process and drains much more energy out of the pool than it puts back in.

But there is a second answer to the question of why greatness, one that is at the very heart of what motivated us to undertake this huge project in the first place: the search for meaning, or more precisely, the search for meaningful work.

I asked the head coach of the cross-country program why she felt compelled to make it great. She paused before answering. “That’s a really good question.” Long pause. “It’s really hard to answer.” More pause. “I guess... it’s because I really care about what we’re doing. I believe in running and the impact it can make on these kids’ lives. I want them to have a great experience, and to have the experience of being part of something absolutely first class.”

Now for the interesting twist: The coach has an MBA from an elite business school and is a Phi Beta Kappa graduate in economics, having won the prize for the best undergraduate honors thesis at one of the most selective universities in the world. She found, however, that most of what her classmates went on to do—investment banking on Wall Street, starting Internet companies, management consulting, working for IBM, or whatever— held no meaning for her. She just didn’t care enough about those endeavors to want to make them great. For her, those jobs held no meaningful purpose. And so she made the decision to search for meaningful work— work about which she would have such passion that the question, Why try for greatness? would seem almost tautological. If you’re doing something you care that much about, and you believe in its purpose deeply enough, then it is impossible to imagine not trying to make it great. It’s just a given.

I’ve tried to imagine the Level 5 leaders of the companies we’ve studied answering the question “Why greatness?” Of course, most would say: “We’re not great—we could be so much better.” But pushed to answer, “Why try for greatness?” I believe they would respond much like the cross-country coach. They’re doing something they really care about, about which they have great passion. Like Bill Hewlett, they might care first and foremost about creating a company that by virtue of its values and success has a tremendous impact on the way companies are managed around the world. Or like Ken Iverson, they might feel a crusader’s purpose to obliterate the oppressive class hierarchies that cause degradation of both labor and management. Or like Darwin Smith at Kimberly-Clark, they might derive a tremendous sense of purpose from the inner quest for excellence itself, being driven from within to make anything they touch the best it can be. Or perhaps like Lyle Everingham at Kroger or Cork Walgreen at Walgreens, they might have grown up in the business and just really love it. You don’t need to have some grand existential reason for why you love what you’re doing or to care deeply about your work (although you might). All that matters is that you do love it and that you do care.

So, the question of Why greatness? is almost a nonsense question. If you’re engaged in work that you love and care about, for whatever reason, then the question needs no answer. The question is not why, but how.

Indeed, the real question is not, “Why greatness?” but “What work makes you feel compelled to try to create greatness?” If you have to ask the question, “Why should we try to make it great? Isn’t success enough?” then you’re probably engaged in the wrong line of work.

Perhaps your quest to be part of building something great will not fall in your business life. But find it somewhere. If not in corporate life, then perhaps in making your church great. If not there, then perhaps a nonprofit, or a community organization, or a class you teach. Get involved in something that you care so much about that you want to make it the greatest it can possibly be, not because of what you will get, but just because it can be done.

When you do this, you will start to grow, inevitably, toward becoming a Level 5 leader. Early in the book, we wondered about how to become Level 5, and we suggested that you start by practicing the rest of the findings. But under what conditions will you have the drive and discipline to fully practice the other findings? Perhaps it is when you care deeply enough about the work in which you are engaged, and when your responsibilities line up with your own personal three circles.

When all these pieces come together, not only does your work move toward greatness, but so does your life. For, in the end, it is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work. Perhaps, then, you might gain that rare tranquillity that comes from knowing that you’ve had a hand in creating something of intrinsic excellence that makes a contribution. Indeed, you might even gain that deepest of all satisfactions: knowing that your short time here on this earth has been well spent, and that it mattered.