‘Good is the enemy of great’

The vast majorities of companies never become great, precisely because the vast majority become quite good – that’s the problem.

Truly great companies have for the most part always been great; with the vast majority of good companies remaining just good.

So can good companies ever become great?

Phase 1: the search

Find companies that showed good to great potential. - companies showing following basic pattern; fifteen-year cumulative stock returns at or below the general stock market, punctuated by a transition point, then cumulative returns at least three times the market over the next fifteen years.

Why these specific patterns? – -fifteen years; would transcend one-hit wonders and lucky breaks + would exceed average tenure of most cheif execs.-Three time the market; exceeds performance of most widely acknowledged great companies.

A company had to demonstrate the good to great pattern independent of its industry, if whole industry showed same pattern them company was dropped from list.

Main focus of research is how to turn companies into just good to great.

Can be done, as research showed that ‘Fannie Mae’ beat companies like ‘GE’ and ‘Coca-Cola’ and ‘Walgreens’ beat ‘Intel’.

Therefore research showed how companies of just good status can turn into great in unfamiliar situations.