Great by Choice

The New Question: Ten years after the global bestseller Good to Great, Jim Collins returns to ask: Why do some businesses thrive in uncertainty, even chaos, and others don’t? In Great by Choice, Collins and his colleague, Morten T. Hansen, list principles for building a truly great business in unpredictable, tumultuous, and fast-paced times.

The new study: Great by Choice differs from Collins’ earlier work by focusing on the type of unstable environments leaders face today.

New finds:

The best leaders were more disciplined, more empirical and more paranoid.
Following the belief that leading in a “fast world” always requires “quick decisions” and “quick action” is a good way to get killed.
Large companies have changed less in response to a changing world than comparators.
This book is classic Collins: contrarian, data-driven, and uplifting. He and Hansen convincingly show that, even in a chaotic and uncertain world, greatness happens by choice, not by chance.

MM. Collins and Hansen draw some interesting and counter-intuitive conclusions from their research. First, successful leaders were not the most “visionary” or the biggest risk takers; instead, they tended to be more empirical and disciplined, relying on evidence rather than instinct and preferring consistent wins to explosive winners. Successful firms were no more innovative than control firms; indeed, they were in some cases less innovative. Instead, they succeeded in “scaling innovation,” introducing changes gradually, then moving quickly to capitalize on those that showed promise. Successful companies were not necessarily the most likely to adopt internal changes in response to a changing environment. “10X companies changed less in response to their changing world than comparison cases,

Like its predecessor, “Great by Choice” is far from a dry social science book. Mr. Collins is good with words, especially with metaphors. An entire chapter is dedicated to pursuing a “bullets then cannonballs” approach to competition. The book’s organizing metaphor is built around the story of Roald Amundsen and Robert Falcon Scott, the two men who set out separately, in October 1911, to become the first explorers to reach the South Pole. Amundsen won the race by setting lofty goals for each day’s progress but also being careful not to overshoot the good days or understate the bad ones, a disciplined approach shared by 10Xers, according to MM. Collins and Hansen. Scott, on the other hand, outgrew the good days and crumbled the bad, mirroring the controlling companies in “Great by Choice.”

The authors find Amundsen-style discipline in Peter Lewis of Progressive Insurance, who refused to play the analyst game of “predicting” quarterly earnings and made Progressive the first SEC company to publish monthly financial statements so that analysts can track actual results instead. Another disciplined leader is Andy Grove, who was willing to take decisive action at Intel, such as exiting the memory chip business in 1985, but only after fully immersing himself in the evidence of a changing market. . According to the authors, Herb Kelleher of Southwest Airlines was always preparing for the next recession, even when none was in sight.

While “Great by Choice” shares the qualities that made “Good to Great” so popular, it also shares some that have drawn criticism. The authors’ conclusions sometimes resemble the claims of a well-written horoscope – so broadly stated that they are hard to refute. Their 10X leaders are both ‘disciplined’ and ‘creative’, ‘cautious’ and ‘bold’; they go fast when they have to but slow down when they can; they are consistent but open to change. This holistic approach allows the authors to incorporate just about any leader that achieves 10X performance into their analysis. Would it ever be possible, one wonders, to find a leader whose success contradicted his thesis?

Which brings us back to Apple. MM. Collins and Hansen had no way of knowing when they began sifting through their data in 2002 that Apple would become one of the most stunning turnaround stories in business history, overtaking Microsoft in value. Merchant. The late Steve Jobs accomplished this turnaround with a series of boldness, innovation, visionary thinking and selfishness that might seem contrary to the studied conclusions of “Great by Choice” as well as those of “Good to Great”. , in which Mr. Collins found that one of the main attributes of the best business leaders was “humility”. Steve Jobs?

But MM. Collins and Hansen have no trouble fitting Mr. Jobs into their framework. They write that his first task in getting Apple back on track was “not iTunes, not the iPhone, not the iPad” – that is, not an act of innovative genius. Instead, “he increased discipline. That’s right, discipline, because without discipline there would be no chance of doing creative work.” A real Amundsen.