Great By Choice: Uncertainty, Chaos, and Luck--Why Some Thrive Despite Them All - By Jim Collins and Morten T. Hansen
Date read: 2017-06-05How strongly I recommend it: 8/10
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Similar to Jim Collns' other book, Good to Great, this one focuses on the strategies and tactics of companies that were able to obtain 10X results. He covers companies from different industries including Southwest Airlines, Apple, Microsoft, and biotech. Some interesting findings on what you think makes these companies great is actually the opposite.
Contents:
My Notes
Why do some companies thrive in uncertainty, even chaos, and others do not?
Throw leaders into an extreme environment, and it will separate the stark differences between greatness and mediocrity.
Prepare with intensity, all the time, so that when conditions turn against you, you can draw from a deep reservoir of strength. And equally, you prepare so that when conditions turn in your favor, you can strike hard.
10Xers understand that they face continuous uncertainty and that they cannot control, and cannot accurately predict, significant aspects of the world around them. On the other hand, 10Xers reject the idea that forces outside their control or chance events will determine their results; they accept full resposibility for their own fate.
These behavioral traits correlate with achieving 10X results in chaotic and uncertain environments: Fanatic discipline keeps 10X enterprises on track, empirical creativity keeps them vibrant, productive paranoia keeps them alive, and Level 5 ambition provides inspired motivation.
True discipline requires the independence of mind to reject pressures to conform in ways incompatible with values, preformance standards, and long-term aspirations.
Start with values, purpose, long-term goals, and severe performance standards; and have fanatic discipline to adhere to them. If that requires you to diverge from normal behavior, then so be it. Don't let external pressures, or even social norms, knock you off course.
Do not look to conventional wisdom to set your course during times of uncertainty, nor do you primarily look to what other people do, or to what pundits and experts say you should do. Look primarily to empirical evidence.
You need to believe that conditions will turn against you without warning, at some unpredictable point in time, at some highly inconvenient moment. And you'd better be prepared.
A Level 5 leaders' most important trait: they're incredibly ambitious, but their ambition is first and foremost for the cause, for the company, for the work, not themselves.
10X cases did not win because of one gigantic piece of luck that dwarfed everything else. Luck does not cause 10X success. People do. The critical question is not "Are you lucky?" but "Do you get a high return on luck?"
Greatness is not primarily a matter of circumstance; greatness is first and foremost a matter of conscious choice and discipline.
If you want to achieve consistent preformance, 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.
Elements of a good 20 Mile March:
The 20 Mile March imposes order amidst disorder, consistency amidst swirling inconsistency. But it works only if you actually achieve your march year after year.
Accomplishing a 20 Mile March, consistently, in good times and bad, builds confidence. Tangible achievement in the face of adversity reinforces the 10X perspective: we are ultimately responsible for improving performance. We never blame circumstance; we never blame the environment.
Research does not support the premise that 10X companies will necessarily be more innovative than their less successful comparisons. And in some surprise cases, the 10X companies were less innovative than the comparisons.
Each environment has a level of "threshold innovation" that you need to meet to be a contender in the game; some industries, such as biotechnology, command a high threshold. Companies that fall even to meet the innovation threshold cannot win.
When you marry operating excellence with innovation, you multiply the value of your creativity.
"Fire bullets, then fire cannonballs": Fire bullets to figure out what'll work. Then once you have emperical confidence based on 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.
What makes a bullet? An empirical test aimed at learning what works and what meets three criteria:
Empirical Validation: Be creative, but validate your creative ideas with empirical evidence.
In the face of instability, uncertainty, and rapid change, relying upon pure analysis will likely not work, and just might get you killed. Analytic skills still matter, but empirical validation matters much more.
10Xers don't have any particular genius for visionary prediction.
Always assume conditions can - and often do - unexpectedly change. Be hypersensitive to changing conditions, continually asking, "What if?" By preparing ahead of time, building reserves, maintaining "irrationally" large margins of safety, bounding their risk, and honing their disciplines in good times and bad, they handled disruptions from a position of strength and flexibility.
The only mistakes you can learn from are the ones you can survive.
Productive Paranoias:
Zoom Out:
Then, Zoom In:
Specific, Methodical, and Consistent.
A solid SMaC recipe is the operating code for turning strategic concepts into reality, a set of practices more enduring than mere tactics.
It is possible to develop practices that are both specific and durable.
SMaC recipes also contain things you should not do.
Change is not the most difficult part. Far more difficult than implementing change is figuring out what works, understanding why it works, and grasping when to change, and knowing when not to.
Ask, "Is our recipe no longer working because we've lost discipline? Or is it no longer working because our circumstances have fundamentally changed?"
The signature of mediocrity is not an unwillingness to change; the signature of mediocrity is chronic inconsistency.
A great company must evolve its recipe, revising selected elements when conditions merit, while keeping most of its recipe intact.