“Power tends to corrupt and absolute power corrupts absolutely.  Great men are almost always bad men.”  Lord Acton

This well-known quote from the 1800’s rings true.  As countless observers continue to remark, great historical leaders (in business, politics, and the arts) are rarely good individuals.  In pursuing their ambition to exercise their power, achieve, and be great, these leaders leave behind a trail of unfilled promises, broken relationships, unhappy families….

What works for leaders often works for companies as well. 

In his 2001 book, Good to Great, Jim Collins defines great companies solely by their ability to achieve consistent and long-term outstanding results year after year.  But let’s think about one company on that list of “great companies”: Philip Morris, the cigarette manufacturer.  Would anyone argue that they are a good and ethical company?

To be truly great, the companies that we build need to combine outstanding long-term financial performance with being good and doing good.  A great and good company is ethical, contributes to society, treats their employees well, delights their customers, and achieves consistent outstanding results year after year.

In short, as leaders we need to build great and good companies. 

1. Focus on some product or service that contributes to society.
2. Have a purpose for the company that is about more than just making money.
3. Hire for more than capability and ambition; hire for character.
4. Treat our good employees well and value them.
5. Satisfy customers and treat them well; do not screw them over or confuse them.
6. Play by the rules of society and follow the spirit and the letter of the law.

Unfortunately, too many companies today fail on at least one of these six measures.  Right off the top, we can think of:

1. Hospitals, pharmaceutical companies, and health care companies that contribute to society, but screw over those least able to afford them – the uninsured.
2. Private Equity companies and technology companies, and countless others who manipulate the law and the tax code to pay far less than their fair share.
3. Hotels, rental car companies, banks, restaurants and other companies with hidden fees and surcharges that confuse and take advantage of customers.

For truly long term success great and good companies will prevail.

As an aside, of the 11 companies in Good to Great (Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, Wells Fargo), only three – Abbott, Nucor, and Kroger – have avoided a major scandal and continue to out-perform in the approximately 20 years since the book was published in 2001.