Good to great
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The document discusses how good companies can become great by analyzing companies that showed good potential but underperformed for 15 years and then significantly outperformed the market for the next 15 years. It identifies a transition point where the company shifted from being good to great. The research focused on identifying how these companies made the transition independently of their industry and aimed to understand how other good companies could replicate this transition to become great.
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director at Detoitte Services
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is a principal witii Deloitte
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strategy officer for Deloitte
LLP. They are the authors
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ceptional Companies Think,
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MUCH OF THE STRATEGY and m a n a g e m e n t a d v i c e
that business leaders turn to is unreliable or im-
practical. That's because those who would guide
us underestimate the power of chance. Gurus draw
pointed lessons from companies whose outstand-
ing results may be nothing more than random fluc-
tuations. Executives speak proudly of corporate
achievements that may be only lucky coincidences.
Unfortunately, almost no one provides scientifically
credible answers to every business leader's basic
questions about superior performance: Which com-
panies are worth studying? What sets them apart?
How can we follow their examples?
Frustrated by the lack of rigorous research, we
undertook a statistical study of thousands of com-
panies, and eventually identified several hundred
among them that have done well enough for a long
enough period of time to qualify as truly exceptional.
Then we discovered something startling: The many
and diverse choices that made certain companies
great were consistent with just three seemingly el-
ementary rules:
1. Better before cheaper—in other words, com-
pete on differentiators other than price.
2. Revenue before cost—that is, prioritize increas-
ing revenue over reducing costs.
3. There are no other rules—so change anything
you must to follow Rules 1 and 2.
The rules don't dictate specific behaviors; nor are
they even general strategies. They're foundational
concepts on which companies have built great-
ness over many years. How did these organizations'
io8 Harvard Business Review April 2013
HBR.ORG
April 2013 Harvard Business Review 109
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leaders come to adopt them? We have no idea—nor
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Great (2001), but there are many others. The prob-
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Consulting LLP and the chief
strategy officer for Deloitte
LLP. They are the authors
of The Three Rules: How Ex-
ceptional Companies Think,
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MUCH OF THE STRATEGY and m a n a g e m e n t a d v i c e
that business leaders turn to is unreliable or im-
practical. That's because those who would guide
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tuations. Executives speak proudly of corporate
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Good to great
- 1. ‘ Good is the enemy of great’