the 7 takeaways I got out of Great by Choice from Jim Collins below my intro. My one word summary: consistent.
The rate of change is picking up. It is not only faster but also more radical then ever in human history. Organisations live a shorter live, competition comes from all over the world in all kind of forms. Most organisations are very well aware of this and embark on all kind of transformative journeys.
What bugs me over and over again is that I miss the apparently sound foundation which initiative(s) will drive the adaption of organisations the best. Sometimes it seems organisations are spending their precious resources on the first one to come by with a good story, a nice trend, an expensive rapport, anything to show the leader (-team) is in control. No consistent framework or the resulting actions seems at work.
I have difficulty seeing great people and organisations wasting precious human energy. We would all benefit if it was spent on more sound and constructive endeavours.
“Don’t just follow trends. Boil things down to the most fundamental truths you can imagine and reason up from there.” ~ Elon Musk
Jim Collins & Morgen Hansen wrote a very nice book “Great by choice” about their intensive study of this problem.“Why do some organisations thrive in uncertainty, even chaos, and others do not?” They came away with surprising conclusions. If I have to frame the book in one word it is : consistent.
The book has excellent summaries at the end of every chapter. I get a deeper understanding by making my own notes I share my notes below with you, hopefully it will help you and your organisation to eliminate some of the waste hidden in not so sound decisions and transformations.
I encourage you to read the book and get your knowledge from the well it self. Have a nice transformation journey!
Some proactive surprises to start you off:
Risk taking, Visionary, Creative
Disciplined, Empirical, Paranoid
Innovate a lot.
Ability to scale innovation, blend creativity with discipline
Fast Decisions, Fast Action
Fast Decisions, Fast Action are a good way to get killed
Change less (stick to your core)
Some are just luckier
The amount of luck is stable, the return on luck is the differentiator.
1 Thriving in Uncertainty: shape events
The studied companies reached their spectacular results in an era of 15+ years, in turbulent environments and started out from a position of vulnerability. It shows that it is always possible to go from good to great (10X). Apple for example when Steve Jobs got back. Be aware in using the outcomes of this study as no social science study can claim to have found a cause. The presented concepts have correlations rooted in evidence. The only hedge against misusing is to keep asking yourself one questions: “What does it take to build a great company?” Or see the more general advice from Elon Musk above. Create a organisation that doesn’t just react to events but shapes events. “The best if not the only way to predict the future is to create it” Peter Drucker.
2 “10X-ers” : a law unto themselves.
The studied companies where not merely successful they truly thrived and beat their industry index at least 10 times. The 10X-ers where on par with the others for creative intensity, ferocious ambition or the courage to bet big. They differentiated with:
- fanatic discipline; they kept on track, set there pace such that they could keep it in all conditions, they are nonconformists in the best sense. They start with values, purpose and long term goals and severe performance standards,
- empirical creativity, they do not reason by analogy, they reason from first principle, for whom they turn to empirical evidence, this enables them to make bold moves and bound their risk (Elon is big in this era there are a lot of youtube videos to be found on this subject), they prepare to meet head on with what they most fear and
- productive paranoia, they are 100% sure that even when things go well a turn against them will happen without warning, they differentia from their counterparts in the effective action they take as a result (for example always have a year of operation cash direct available) supported by
- level 5 ambition: 10X-ers channel their ego and intensity into something larger and more enduring than themselves. A cause beyond themselves, they defined themselves by impact, contribution and purpose.
How to become a 10X-er? The study did not found a consistent pattern in the backgrounds of the 10x-ers versus the comparison leaders.
3 Fanatic discipline : 20 Mile March : stable with confidence
Fanatic discipline, is about having concrete, clear intelligent and rigorously pursued performance mechanisms that keep you on track. It creates two types of discomfort; holding back when all goes well, keep performance up in difficult conditions. Keeping a 20 Mile March is the strongest contract in the study….so if you want to start with anything this may be a save bet. Elements of a good 20 Mile March; performance markers, self-imposed constraints, tailored to the enterprise, lies largely within your control to achieve, goldilocks time frame. A good 20 Mile March must be achieved with great consitency, good intentions do not count. The more turbulent the world, the more you need to be a 20 Mile Marcher.
4 Empircal Creativity : Fire Bullets then Cannonballs : allways test
In only three of seven pairs, the 10X case proved more innovative than the comparison company. So being more innovative is not necessary to be succesfull. Only 9 % of pioneers end up as winners in a market. (So far the first mover advantage) It seems that innovation is good for society but lethal for the pioneer. There is a level of threshold innovation in any industry to be a contender in the game. Blend creative intensity with relentless discipline so as the amplify the creativity rather then to destroy it. Evidence shows that a lot of bullets are fired and only a hand full of canonballs althoug the canonballs get all the attention. A bullet should be relative low in cost, low in risk and low in distraction. Approach: Fire: bullets, Assess: did you hit, Consider: cannonball worthy, Convert: fire calibrated canonball. Terminate: bullets without succes. Only: calibrated canonballs.
5 Productive paranoia : Leading above the deadline : risk-profile? change?
Habit 1 : Build cash reserves and buffers to prepare for the unexpected before they happen.
Habit 2 : Bound risk. Consider death line risk, assymetric risk, uncontrollable risk and time based risk.
Habit 3: Zoom out en then zoom in, remain hypervigiglant to sense changing conditions and respond effectively.
They key questions turns out to be “How much time before our risk profile changes”…and use your time wisely. 10X teams neither freeze up nor immediately react; they think first even when they need to think fast.
“If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.” ~ Einstein
6 Level 5 Ambition : SMaC : Simple Rules
A SMaC recipe is a set of durable operating practices that create a replicable and consistent success formula. (Specific, Methodical and Consistent). The 10X organisations adhered to their SMaC with far greater fanatic discipline the comparisons and they carefully amended their recipes with empirical creativity and productive paranoia. Change is hard but knowing what works, why and how to implement it is much harder. If faced with difficulties 10X leaders first examine if they strained from recipe and lost discipline, if so they reconnect with the underlaying insight to reignite the passion for adhering to it only then will they look if their circumstances have changed dramatically. The signature of mediocrity is not an unwillingness to change; the signature of mediocrity is chronic inconsistency. Most change is just noise and requires no fundamental change in ourselves. There must be a coherent, consistent, enduring framework holding the enterprise together with a very high hurdle for change. See for more on this also my article on FAB.
Take your time to get your recipe right building them upon savvy understanding about what actually works. Continually question and challenge your recipe, but change it rarely.
7 Return on Luck : What is your return on luck? ROL
There is no evidence that amount of luck is different between 10X organisations and their comparisons. The critical questions is: Do you get a high return on luck? Getting a high return on luck requires you throwing yourself at the luck event with ferocious intensity, disrupting your life and not letting up. Hence the famous stories of entrepreneurs leaving education and becoming successful. The concept discussed above all contribute to generating a great Return On Luck (ROL).
I am thankful for all small and big curious minds that existed before me and are here now. I would like to give special thanks to Jim Collins & Morgen Hansen and their helpers for undertaking this study. If you find anything in my representation that is not correct then that is entirely my fault. Don’t hesitate to reach out and correct me. We only learn together.
Thank you for your interest. Go create a nicer world with less waste of human potential 🙂