It’s seems like I have heard a lot people still extolling the virtues of Good To Great, Jim Collins’ 2001 book. Nine years on, and people still like his message. So, I decided to re-read it. And yes indeed, he makes some very good points.
But what struck me is that no matter how sound the principles and examples that are presented in business books, the reality seems to be that nothing…nothing…remains true forever. Except for the blandest of advice, today’s truisms are often tomorrow’s embarrassments.
Consider some of the companies that Collins lauds in Good To Great. In a 2008 Freakonomics blog post, Steven D. Levitt pointed out that since the time the book appeared, only one of the companies—Nucor—has dramatically outperformed the stock market. Overall, Levitt wrote that a portfolio of “Good To Great” companies would have underperformed the S&P 500.
He also mentioned 2 notable busts: Circuit City (bankrupt) and Fannie Mae (down 80% and required a government bailout).
Does this negate all of Collins’ points? No, but it is a reminder that most wisdom (and business books) are backward-looking. Their application to future developments is iffy.
As is often the case, the answer to the question of “Will this wisdom work for me?” is “It depends.” So, beware of those “Eureka! I have the answer!” authors that purport to have discovered the one insight that will change everything for the better.
If it were that easy, it wouldn’t have taken until now to discover it.