Yeah, but How Do You Define "Great"?

[bcholmes]

So, I've been reading this book, From Good to Great. I don't read a lot of books from the business section of the bookstore, but this one was recommended to me. Basically, the book looks at the transition point when companies moved from "good" companies to "great" companies (and stayed there).

I've been enjoying the book; I think it's given me some interesting ideas and thoughts. But I have this huge disconnect about the way that "great" was defined in terms of value to the stockholder. Again and again, to illustrate their points, they talk about the return on investing USD $1, and what the return on that dollar is over a largish period of time. One of their "Good to great" companies is Phillip Morris, fer example, and they don't seem remotely concerned with (what I consider to be) the huge problems of the tobacco industry.

In the introduction, the author said that stockholder return was the only truly objective easily-available measure, and that using anything else would be both subjective and would expose his personal biases. He promised to discuss some other factors, briefly, in the last chapter, so I hope he has something I can relate to.

It reminds me of when I was working for a company that did U.S. 401k products (what Canadians would call Defined Contribution Pension Plans). One of their investments was called the "Morally Responsible Fund". This was a fund for people who wanted to make ethical investments. When you looked deeper, the largest percentage of the fund's holdings was in Micro$oft. That was their definition of "Morally Responsible".

Comments

[jmthane.livejournal.com]

the author said that stockholder return was the only truly objective easily-available measure, ...

Unfortunately, that also seems to be the way that the business world is run, solely for the stockholder return/$USD made in profit. Nothing else matters. Nothing.

I have a *big* problem with that, myself...

[kalmn.livejournal.com]

yup. i'm doing morally/socially responsible investing, and there's one heck of a lot of my money going to microsoft and to ibm.

i am grimacing and being glad it's not going to exxon or to phillip morris. i could probably find companies to invest in that were better than what i've got now, but there aren't any funds set up to do that that i can find, and i haven't the time or energy to do the investments management myself. it's totally a lesser of two evils situation.

[futabachan.livejournal.com]

Good is +1, and Great is +2 (http://www.fudgerpg.com/files/pdf/fudge_1995.pdf), of course. :-)

I'd rather be Superb. Or Legendary....

[hellsop.livejournal.com]

Well, MS didn't hurt cute animals as part of their business, nor did they sell things that directly caused physical harm. (We'll skip the amound of booze and cigarettes consumed as an indirect cause of MS's products.)

Morally Responsible --and therefore-- GREAT business

[trema-slo.livejournal.com]

What makes a business good is it's success, and how it sets market trends, whether locally, or as far as the media can reach.

The comments so far have addressed the economic investment and shareholder aspects. Yet, it all has to start somewhere, such as with the product, or the first sale.

So, what makes a business great, in my opinion, is how people feel when they transact with said business. Do they luv the experience? Then the business is great!

Maryanne Williamson said a great business is like a church. It's there to give something to the 'customer', the person who walks in the door. It's not just there to be a "good" business and be successful.

Logically then, the same would be true of what makes a great church.
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