Tuesday, July 29, 2008

Freakanomics on "Good to Great" companies

There are no easy answers, no silver bullet, no magic formula. What worked yesterday may be ineffective tomorrrow. What got you here may not take you there. ___________________________ (Fill in the blank with your favorite cliché.)

Bottom line, don't get complacent if you want to stay on the leading edge! The authors of the Freaknomics blog (@ NYTimes online) present evidence from the marketplace that is a warning flag for church leaders too...

July 28, 2008, 1:37 pm

From Good to Great … to Below Average

By Steven D. Levitt

I almost never read business books anymore. I got my fill of them years ago when I was a management consultant before I went back and got a Ph.D.

Last week, however, I picked up Good to Great by Jim Collins. This book is an absolute phenomenon in the publishing world. Since it came out in 2001, it has sold millions of copies. It still sells over 300,000 copies a year. It has been so successful that seven years later the book is still in hardcover. I’ve been hearing about it for years and never looked at it. People are always asking me about it. I figured it was about time I took a look.

The book focuses on eleven companies that were just okay, and then transformed themselves into greatness — where greatness is defined as a sustained period over which the stock dramatically outperformed the market and its competitors. Not only did these companies make the transition from good to great, but they also had the sorts of characteristics which made them “built to last” (which is the title of Collins’s earlier book).

Ironically, I began reading the book on the very same day that one of the eleven “good to great” companies, Fannie Mae, made the headlines of the business pages. It looks like Fannie Mae is going to need to be bailed out by the federal government. If you had bought Fannie Mae stock around the time Good to Great was published, you would have lost over 80 percent of your initial investment.

Another one of the “good to great” companies is Circuit City. You would have lost your shirt investing in Circuit City as well, which is also down 80 percent or more. Best Buy has cleaned Circuit City’s clock for the last seven or eight years.

Nine of the eleven companies remain more or less intact. Of these, Nucor is the only one that has dramatically outperformed the stock market since the book came out. Abbott Labs and Wells Fargo have done okay. Overall, a portfolio of the “good to great” companies looks like it would have underperformed the S&P 500.

I seem to remember that someone did an analysis of the companies highlighted in Peters and Waterman’s 1980’s classic book In Search of Excellence and found the same thing.

What does this all mean? In one sense, not much.

These business books are mostly backward-looking: what have companies done that has made them successful? The future is always hard to predict, and understanding the past is valuable; on the other hand, the implicit message of these business books is that the principles that these companies use not only have made them good in the past, but position them for continued success.

To the extent that this doesn’t actually turn out to be true, it calls into question the basic premise of these books, doesn’t it?


Steven D. Levitt is a professor of economics at the University of Chicago.

The book he co-authored, Freakonomics, has sold 3 million copies worldwide.

Wednesday, July 23, 2008

Make something good happen today...

"I like things to happen; and if they don't happen, I like to make them happen." -Winston Churchill

"Life is action and passion."- Oliver Wendell Holmes Jr.

"If everything's under control, you're going too slow." - Mario Andretti

"I do not believe in a fate that falls on men however they act; but I do believe in a fate that falls on them unless they act." -G. K. Chesterton

"Do not wait; the time will never be "just right." Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along." -Napoleon Hill

"If you have a great ambition, take as big a step as possible in the direction of fulfilling it. The step may only be a tiny one, but trust that it may be the largest one possible for now." - Mildred McAfee

"Do or do not. There is no try."-Yoda

"Chaotic action is preferable to orderly inaction." - Carl Weick

"If you do nothing unexpected, nothing unexpected happens."-Fay Weldon

Friday, July 18, 2008

E-Bay auction for out-of-the-box pastor....

Here's is the description you'll find on E-Bay:

"You are looking at/bidding on a very contemporary out of the box Pastor. As you can tell by the pictures He preaches and teaches in a very unorthodox manner. He does it without compromising the true written word of God. He and his family has chosen to go this route of putting themselves on the market in hopes to find a church that is untraditional and is ready to reach their community. He and his family will consider relocating in the contentinental United States. For any questions or more information feel free to email Pastor Chad at pastorchad72@gmail.com or visit his my space at

Monday, July 14, 2008

Drill bits or holes?

"People don't want a quarter-inch drill, they want a quarter-inch hole." -- Dr. Theodore Levitt, Harvard Business School Professor emeritus

Dr. Keith Drury, IWU's leadership guru, made the same point years ago in Strategetics training for youth leaders. Leaders aren't about selling programs, we are about helping our organizations find solutions!

Wednesday, July 9, 2008

Teach them to long...

“If you want to build a ship, don't drum up people to collect wood, divide the work and give orders. Instead, teach them to long for the endless immensity of the sea.

Antoine de Saint-Exupery (The Wisdom of the Sands)