“Great by Choice” by Jim Collins and Morten T. Hansen

Great by Choice

Life – and business – is uncertain, unpredictable, and uncontrollable. So why do some companies thrive in uncertainty, even chaos, and other do not?

That’s the burning question asked by “Great by Choice: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All” (2011). The book was written by author, teacher, and researcher Jim Collins and author and management professor Morten T. Hansen. It’s research-driven and thought-provoking, concluding with the insight that greatness is “first and foremost a matter of conscious choice and discipline” (page 182).

The authors searched for companies that thrived in chaos from the 1960s through 2002, when this research project was started. There were three criteria: the company achieved at least 15 years of spectacular performance; the environment was particularly turbulent; and the company rose to greatness from a position of vulnerability. They identified seven “10X” companies – Amagen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines, and Stryker – and analyzed the traits the companies shared in common.

They discovered that these seven companies displayed three core behaviors that distinguished them from their direct competition: 1. Fanatic discipline (they acted with extreme consistency – sticking with their values, goals, performance standards, and methods); 2. Empirical creativity (they relied on direct observation, practical experimentation, and direct engagement instead of gut instincts or hunches); and 3. Productive paranoia (they maintained hypervigilance, staying highly attuned to threats and changes in their environment, even when – especially when – things were going well).

And underlying the three core behaviors is a motivating force: a passion and ambition for a cause or company larger than themselves.

For a more dramatic comparison between success and failure, the authors discussed the 1911 race to the South Pole by expedition leaders Roald Amundsen, who planted his flag and returned home; and Robert Falcon Scott, who perished with his team. In near identical circumstances, it was Amundsen’s preparation, discipline, and paranoia that led to triumph.

One of the most interesting and helpful ideas in the book is that we often have the wrong idea about success. Collins and Hansen highlight five myths about successful companies:

Myth #1: Successful leaders in a turbulent world are bold, risk-seeking visionaries.
Reality: They were more disciplined, empirical, and paranoid.

Myth #2: Innovation distinguishes 10X companies in a fast-moving, uncertain, and chaotic world.
Reality: More important is the ability to scale innovation, to blend creativity with discipline.

Myth #3: A thread-filled world favors the speedy.
Reality: 10X leaders figure out when to go fast, and when not to.

Myth #4: Radical change on the outside requires radical change on the inside.
Reality: 10X companies changed less in reaction to the changing world.

Myth #5: Great enterprises with 10X success have more good luck.
Reality: The critical question is what you do with the luck you get.

The authors warn entrepreneurs that “Pioneering innovation is good for society but statistically lethal for the individual pioneers” (page 72). They also offer great practical advice product development: Fire bullets, then fire cannonballs. A bullet is a low-cost, low-risk, and low-distraction test or experiment; a cannonball is a big bet with empirical validation.

“Great by Choice” is methodical and careful, full of anecdotes, specific examples of business decisions, and useful chapter summaries. Research foundations and notes are included at the end, so the book doesn’t get bogged down in details. It is a good starting point so that we can better react to economic uncertainty and cope with our own successes. We should all remember: “We cannot predict the future. But we can create it.”

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2 Comments on ““Great by Choice” by Jim Collins and Morten T. Hansen”

  1. Masud Says:

    Reblogged this on vizualbusinessbd.

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