Jim Collins, writing with his research associate Morten Hansen, has written a new book called Great By Choice: Uncertainty, Chaos, and Luck--Why Some Thrive Despite Them All. And it's, well, great. And by choice, I might add.
You see, I think the most brilliant stroke by Collins is that the arc of his work—having published three books that are a breed apart—follows his own themes. His books are everlasting bestsellers—he's had books on the bestselling lists since 1997. In other words, his work is "Built to Last," (the title of his first major book). A Collins book doesn't just sell well, it sits at or near the top of a bestseller list; it's not just a good book, it's a great book. (Good To Great, his second major book, sold over 4 million copies.) Finally, he's extremely selective and disciplined in what, when and with whom he chooses to publish. These are extremely chaotic and uncertain times for book publishers, and one could argue that the ability for any one book to break out is more luck than anything. For Collins, though, greatness is a choice.
And that brings me to the major theme of Great By Choice: the ability of any company to not merely survive, but to thrive in the face of extreme business conditions, depends on the quality of decisions its leadership makes. Uncertainty, chaos and luck are constraints, and the great leaders understand that these forces can't be controlled, only managed to.
From each of Collins's books, the business world has adopted a new meme—a sticky phrase meaningful enough in metaphor to become part of a new lexicon. From Built To Last we got "BHAG"—Big, Hairy, Audacious Goal. It was so sticky and worked so well that Collins tripled the meme level in Good To Great: Hedgehog (focus on the one thing your company is passionate about, can perfect, and is profitable), Level 5 Leadership (great leaders are less flashy and charismatic than humble servants, giving credit for success to others while taking upon themselves the responsibility for failure), and Flywheel (focusing on incremental successes over the long term rather than seeking instant breakthrough success).
In Great By Choice we get even more, each given its own chapter:
10X. A 10Xer is a company that beat its competitors by at least 10 fold over the course of "an era of 15+ years relative to the general stock market and relative to its industry.
Collins's study ends in 2002, but he handles the question of relevancy right up front: "Just because the UCLA Bruins basketball dynasty of the 1960s and 1970s under Coach John Wooden (with its 10 NCAA championships in 12 years) declined after Wooden retired does not invalidate insights obtained by studying the Bruins during its dynastic era."
Seven companies make the cut: Amgen, Biomet, Intel, Micosoft, Progressive Insurance, Southwest Airlines and Stryker. What's interesting is what these companies are not: "They're not more creative. They’re not more visionary. They’re not more charismatic. They’re not more ambitious. They’re not more blessed by luck. They’re not more risk seeking. They’re not more heroic. They’re not more prone to making big, bold moves."
So what sets 10Xers apart? Each company shares three common characteristics: 1) fanatic discipline, 2) empirical creativity, 3) productive paranoia. These add up to what Collins calls Level 5 Ambition. The authors use the story of the quest to reach the South Pole by two teams of adventurers in 1911. Roald Amundsen, the winner, and Robert Scott, the loser, had comparable opportunities, but it was Amundsen who exhibited the three 10X qualities.
20 Mile March. This is the metaphor for fanatic discipline, which is self-imposed restraint to keep growth under control. "If you want to achieve consistent performance, you need both parts of a 20 Mile March: a lower bound and an upper bound, a hurdle that you jump over and a ceiling that you will not rise above, the ambition to achieve and the self-control to hold back. A good 20 Mile March has a Goldilocks time frame, not too short and not too long but just right."
Fire Bullets, Then Cannonballs. This is the metaphor for empirical creativity. "10Xers had a much deeper empirical foundation for their decisions and actions. First, you fire bullets to figure out what’ll work. Then once you have empirical confidence based on the bullets, you concentrate your resources and fire a cannonball. After the cannonball hits, you keep 20 Mile Marching to make the most of your big success."
Leading above the death line. This is the metaphor for productive paranoia. "The only mistakes you can learn from are the ones you survive," write the authors. "10Xers remain productively paranoid in good times, recognizing that it’s what they do before the storm comes that matters most. Since it’s impossible to consistently predict specific disruptive events, they systematically build buffers and shock absorbers for dealing with unexpected events. They put in place their extra oxygen canisters long before they’re hit with a storm."
There are a couple of others, reminiscent of BHAG. There's "SMaC," which stands for Specific, Methodological, and Consistent—the more uncertain your environment, the more SMaC you need to be. A SMaC recipe is a set of enduring principles and practices that create a consistently repeatable formula for success. And there's "ROL," which stands for Return on Luck—10Xers weren't more lucky or unlucky than their competitors, they simply had better ROL because they exploited good luck and mitigated the effects of bad luck.
One of things I admire most about Jim Collins is his ability to focus on a single question, and then do the deepest of historical and comparative dives to provide the answer. In Built to Last, the central question was: Why are some companies able to achieve and sustain success through multiple generations of leaders, across decades and even centuries? In Good to Great, the question was: Why do some companies make the leap from good to great, and others don't? The question driving Great by Choice is: Why do some companies thrive in uncertainty, even chaos, and others do not?
"What's coming next?" the authors ask as they tee up this question. "All we know is that no one knows. Yet some companies and leaders navigate this type of world exceptionally well. They don’t merely react; they create. They don’t merely survive; they prevail. They don’t merely succeed; they thrive. They build great enterprises that can endure. We do not believe that chaos, uncertainty, and instability are good; companies, leaders, organizations, and societies do not thrive on chaos. But they can thrive in chaos."
The authors deliver the book's most eloquent and elegant passage in the Epilogue: "The greatest leaders we've studied throughout all our research cared as much about values as victory, as much about purpose as profit. As much about being useful as being successful. Their drive and stamina are ultimately internal, rising from where deep inside."