Question

Explain Phase 1: The Search in Good to Great by Jim Collins.

Answer 1

Phase 1: The Search in Good to Great by Jim Collins –

This phase is focused on ‘search’. The first task was to find companies that showed good-to-great pattern. The pattern that were focused on were 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. Companies like Abbot, Circuit City, Gillette, Kroger, Philip Morris, Wells Fargo etc. were considered.

Good to great shift had to be a company shift and should not be an industry event. At the transition point a company should not be a start-up rather it should be an established company and an ongoing company. Also the transition point had to occur before 1985. Moreover at the time of selection the company should still be showing an upward trend.