"Great by Choice" Jim Collins, Morten T. Hansen

Collins and Hansen explain in their book "Great by Choice" how did 10 companies (or 10xers) thrive in dramatically changing environment and how did their leaders succeed. For an answer they used historical analysis, looking at a timeframe of 15+ years, from 1965(-80) to 2002 eg Microsoft, Southwest Airlines and comparative analysis with 10 respective companies, that did not survive.

Myth 1: successful leaders in a turbulent world are bold, risk-seeking visionaries.

Contrary finding: the best leaders do not have the ability to predict future. They observed what worked and found out why it worked, and built upon proven foundations. The successful leaders were more disciplined, empirical and paranoid.

* Fanatic Discipline - Extreme consistency of actions, values, goals, performance standards and methods. Relentless in their focus on their quest. True discipline requires mental independence, ability to remain consistent in the face of intrinsic and social pressures.

* Empirical Creativity - When faced with uncertainty 10xers did not look to other people, believe in conventional wisdom, authority figures or peers for direction, they look primarily at empirical evidence - direct observation, practical experimentation, and direct engagement with tangible evidence. They simultaneously made bold moves and bound their risk. “Fire bullets” to experiment what works, and then based on evidence “fire cannonballs”.

* Productive Paranoia - Highly tuned to threats and changes in the environment even when all is going well. Fear is channeled into extensive preparation ahead of time all the time and effective action. 10xers took less risk and always had cash reserves. “Zoom out” to understand the environment, and if necessary change plans and “zoom in”, to execute objectives.

* Level 5 Ambition - Lead with powerful mixture of personal humility plus professional will. Leaders who deflect attention from themselves, maintain low profile, led with inspired standards, rather than inspiring personality. They define themselves with impact, contribution and purpose. 

Also, they adopt the SMaC (Specific, Methodical and Consistent) recipe. The more uncertain your environment is the more SMaC you need to be. It is a list of things we do, clear, concrete, success formula, enabling enterprise to focus on doing the right thing. Any given element of 10xers recipe lasted on average for more than two decades. For example, a part of the SMaC list of the Howard Putnam, the CEO of Southwest Airlines: utilize 737 as our primary aircraft for 10-12 years, passenger is our 1 product, stay out of food services, keep fun atmosphere aloft, retain Texas as our 1 priority and only go to interstate if high - intensity short - haul markets are available to us etc.

Myth 2: You are either quick or dead.  

Contrary finding: 10xers figure out when to go fast, and when not to.10xers did the “20 Mile March” - requires hitting specified performance markers with great consistency over long period of time. 10xers has sustainable pace, in bad times deliver high performance and in good times hold themselves back.

Myth 3: Innovation distinguishes 10X companies in fast moving, uncertain, and chaotic world.

Contrary finding: 10xers did innovate lot, but not more than their less successful comparisons. The innovation is not a trump card itself, more important is the ability to scale innovation.

Myth 4: Radical change on the outside requires radical change on the inside.

Contrary finding: 10x cases changed less in reaction to their changing world than the comparison cases.  

Myth 5: Great enterprises with 10x success have a lot more good luck.  

Contrary finding: The 10x companies did not have more luck - bad and good - than others. It’s not about “Are you lucky?”, but “Do you get a high return on luck?”. One of the most important type of luck is the “Who Luck” - the luck of finding the right mentor, teammate, leader, and friend. The best way to find a strong current of luck is to swim with great people, and to build great relationships with people for whom you’d risk your life and who would do the same for you. 

To summarise: 10x companies were not more lucky, or had more resources etc, leaders were not more educated (some did well at school some not) nor did come from better family background (had various backgrounds), did have a wide range of different personalities (some were charismatic some were not) compared to the unsuccessful companies. For success the authors urge to act in a data driven and disciplined way. Collins and Hansen: "We cannot predict the future. But we can create it." I wonder is the "education does not matter" part still true, as in our technology bubble era many of the leaders have excellent educational backgrounds? 

I enjoyed the examples and the illustrative names used for the concepts eg fire bullets, then cannonballs. The book is a great example how to explain the research results in a simple and justified way.

Jim Collins, Morten T. Hansen "Great by Choice" (2011)