Book Review: Great By Choice – Jim Collins & Morten T. Hansen

As a business-owner of sorts I am very interested in new findings in business and leadership. I recently was recently talking to my brother about my company and how we need a guiding vision going forward from our first successful year. He recommended “Great By Choice” as a book he had recently read and thoroughly enjoyed. I have to agree with his tastes. I found this book to be quite insightful.

Collins and company started off with a question: Why do some companies thrive in uncertainty, even chaos, and others do not? They then set about conducting research; finding high-achieving companies in fields fraught with risk and change who had nonetheless performed ten times better than comparable companies in the same industries over a 25 year period. These “10X” companies and their comparison companies provide the framework they studied in detail.

The answers are many, but a lot of it comes to discipline: discipline to not over-extend or over-risk, discipline to put out lots of small, less-expensive “feelers” to see which ones work well before committing signficant resources, discipline to always be on the lookout for problems and opportunities alike.

One analogy Collins uses and returns to frequently is the 1911 South Pole expeditions by Roald Amundsen and Robert Falcon Scott. Both were experienced explorers, and both had spent time in Antarctica before. Yet Amundsen made it to the pole first and returned safely, while Scott’s entire expedition, though also reaching the pole, froze to death on the return trip.

The difference was that Amundsen was careful, methodical, and obssessed with minimizing risk. For example, while Scott chose ponies and newly-developed motorized sleds for transportation (the sleds hadn’t been proven at those extreme temperatures and failed quickly, while the ponies were limited in their food options), Amundsen relied on proven dog-sleds (the weaker dogs could be fed to the stronger dogs if needed).

Amundsen also not only carried enough supplies with him to be able to miss several supply depots without difficulty, but he carefully marked each supply depot with flags spread out for ten kilometers to either side so he could be off by as much as ten kilometers and still find his supplies. He scupulously marked his trail for the return journey. Scott, by comparison, carried only enough supplies at one time to get them to the next supply depot. He placed a flag on each depot, but nothing more. He brought only one thermometer, which broke. When searchers found him and his remaining team members frozen in their tent they were only ten miles away from their supply depot.

Amundsen and countless other examples in the book, both companies and individuals, demonstrate Collin’s key traits for “10X” performance: Fanatic discipline, productive paranoia, empirical creativity, and ambition. The companies they trace include many we’ve heard of (Microsoft, Intel, Progressive, Apple) and many we may not have (Pacific Southwest Airlines, Biomet, USSC, Stryker), and not always as winner. Apple, for example, did quite poorly during the period Collins studied. It was only after Steve Jobs’ return in the 2000’s that the company started in the direction we know today.

One of the most interesting sections to me was their study on luck. They wanted to determine if 10X companies are just luckier, or if their comparisons were just unluckier. They found that if anything, their 10X companies were less lucky, but mostly their luck was comparable on both sides of the equation.

The difference was that the 10X companies tended to be better prepared, quicker to act, and more disciplined to act effectively when experiencing both good and bad luck. As a result their bad luck didn’t set them back nearly as much, and their good luck drove them to new heights. Some of their comparison competitors, on the other hand, not only were caught more off guard by the bad luck, but even fumbled the ball during good luck, turning positive developments into near-catastrophies.

The book is research-driven. The study methods, data, and results are all included should you wish to look more deeply, and make the book look thicker than it is. If you don’t care about the detailed data, it’s a quick read. But because the data is there it adds weight to their conclusions. They’re not guessing–the data proves what they claim.

As I read this book I found myself becoming excited about my own company and wanting to take a deeper look at what we’re doing, make some solid plans, and start applying the concepts in the book. I even learned to accept the frustrating pessimism of one of my partners! Bill Gates was an unrelenting pessimist, and as a result was seldom caught by surprise.

All in all, I found it a positive, motivating book. The difficulty is always in applying what you learn, but I’m excited to try. Who wouldn’t want to do at least ten times better than the rest of the field?

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