Collins: Corporate “Greatness” Needs a Measure and a Date

Fannie Mae appears among Jim Collins’s “great” companies. The first chapter’s table identifies its period as 1984–1999. In September 2008, the company was placed into conservatorship under its federal regulator after its financial condition deteriorated; the action also covered Freddie Mac.[6][7]

That does not automatically make the earlier result reported in the book untrue. But it immediately requires us to clarify “great.” Does the word mean measured success over a particular interval, a good organisation in a broader sense, or a promise of future resilience? In Good to Great, those meanings should not be merged.

Greatness for which data could be found

Collins describes a dispute within the research team: should social welfare and employees’ quality of life count? The selection was eventually limited to stock returns because the team could not find a sufficiently defensible way to measure the other characteristics.

That is not a minor technical footnote. A company passing this screen does not automatically become a good employer or a social good. It meets a financial criterion. Other assessments require other information.

The criterion was demanding: for fifteen years before the transition, cumulative stock returns had to remain at or below the market; over the following fifteen years, they had to exceed the market by at least three times. If the entire industry shared the rise, the case was excluded. Collins was looking for a specific historical trajectory, not merely collecting famous brands.

That makes “greatness” more precise, but narrower too. Remove the dates and a financial table quietly turns into an honorary title without an expiry date.

Athletes without gold medals have coaches too

It would be unfair to accuse Collins of looking only at winners. He explains the need for comparison through Olympians: study only gold medallists and you may notice that they all have coaches. But athletes without gold medals have coaches too. A shared characteristic of winners does not yet explain the difference in outcomes.

The successful cases were therefore supplemented with direct-comparison companies and companies that failed to sustain high performance. Appendix 1B shows how the first group was selected: matching considered business activities, size, age, stock performance and starting opportunities. That is more useful than advice simply to imitate someone’s management.

At the same time, comparing historical cases does not automatically establish that an identified set of actions guarantees results for another organisation. In the first chapter, Collins moves from a specific financial study to a search for enduring principles for organisations of every kind. That move needs a separate examination, not just admiration for the volume of material collected.

What a fall after success actually challenges

Fannie Mae’s story should not become a shortcut for dismissing the entire book. A later crisis does not erase earlier data. It establishes something different: membership of a historical group of winners offers no guarantee of subsequent resilience.

In May 2009, Collins himself wrote about the decline of previously successful companies. His answer was that a fall does not invalidate what we can learn from studying a company at its historical best. That is a fair objection to “it later fell, so there was nothing useful to learn,” but not a new demonstration that the management principles are universal.[4]

Read with two separate questions: how does the author explain a particular transition, and what justifies transferring that explanation beyond the cases studied? The first question can be fruitful even if the second promise is too broad.

For a Ukrainian organisation, transfer starts earlier still: defining the desired result. Imagine a charitable project. The amount raised matters, but does not by itself tell us what benefit people received. This is not an argument against counting money; it is a requirement not to substitute money for the whole mission. Before borrowing someone else’s “greatness,” name your own measure of success.

For this purpose, read Chapter 1, “Good Is the Enemy of Great,” followed by Appendix 1B on selecting direct-comparison companies. The first establishes the criterion and the scale of the promise; the second lets us inspect the comparison mechanism. This is a route through the research design, not a complete business-reorganisation plan.

Book source

Jim Collins, «Від хорошого до величного»: Chapter 1; the epilogue, «Найпоширеніші запитання» (Frequently Asked Questions); Appendix 1B. These sections were read, not the entire book. Book-content claims and English chapter names render the consulted Ukrainian translation, not a separately checked English edition. The external sources below establish the historical event of 2008 and Collins’s later response; the current performance of all eleven companies is not assessed here.

Sources

[4] https://www.jimcollins.com/books/how-the-mighty-fall.html — Jim Collins — A Primer on the Warning Signs (May 2009) [6] https://www.fhfa.gov/conservatorship — FHFA — Conservatorship: historical timeline [7] https://www.federalreserve.gov/newsevents/pressreleases/other20080907a.htm — Federal Reserve — Bernanke statement on Fannie Mae and Freddie Mac (7 September 2008)