30 Books in 30 days – Remembering 15 years of the 1st Friday Book Synopsis – (Great by Choice by Jim Collins)

{On April 5, 2013, we will celebrate the 15^th Anniversary of the First Friday Book Synopsis, and begin our 16^th year.  During March, I will post a blog post per day remembering key insights from some of the books I have presented over the 15 years of the First Friday Book Synopsis.  We have met every first Friday of every month since April, 1998 (except for a couple of weather –related cancellations).  These posts will focus only on books I have presented.  My colleague, Karl Krayer, also presented his synopses of business books at each of these gatherings.  I am going in chronological order, from April, 1998, forward.  The fastest way to check on these posts will be at Randy’s blog entries — though there will be some additional blog posts interspersed among these 30.}
Post #28 of 30

——————–

Synopsis presented November, 2011
Great by Choice: Uncertainty, Chaos, and Luck — Why Some Thrive Despite Them All by Jim Collins and Morten T. Hansen. (HarperBusiness.  2011).

{First, a “progress” note.  Skip this if you like.  It was around this time that I made a shift – a personal shift – in how I read my books.  And, we upgraded the look of our handouts.  By his time, I was reading my books on the Kindle App on my iPad.  This means that my highlights (my “underlinings”) are done on a touchscreen, and “show up” accessible on my “Your Highlights” page on my personal Amazon page.  So, now, I can copy and paste excerpts/key quotes from the book.  Thus, on my handouts, there are no longer page numbers, but “Kindle App locations.”  And, I now start with many, many pages of highlighted passages.  Editing it down to the “most important” is getting more and more difficult, and my comprehensive handouts that accompany my synopses are getting longer.

The upgrade is this:  we selected Jen Voiles of JVO Design to design our handouts.  They went from plain-looking Word documents to nice looking, designed documents.  They really are better – a lot better.  I highly recommend Jen and her work.  So, if/when you purchase any of our synopses at our companion site, 15minutebusinessbooks.com, you will see this upgraded look beginning with my synopsis of Good Strategy, Bad Strategy by Richard Rumelt, which I presented in October, 2011.  So, this book, Great by Choice was the second month of our new look handouts}.

What is there to say about Jim Collins?  For the last decade, he is certainly one of the most influential thinkers found in business book writing.  My First Friday Book Synopsis colleague Karl Krayer regularly sings the praises of Good to Great which was published in 2001.  He “got some things wrong” in that book, listing among other exemplar companies Fannie Mae and Circuit City.  They may have been great, but they clearly did not stay great.  He later addressed this in his book How the Mighty Fall.

Jim Collins is a “vocabulary creator,” giving us phrases that become part of the current business vocabulary.  “Hedgehog Circles” in one such phrase, and my blog post, Your Own Personal Hedgehog Circles — Counsel from Jim Collins, Kevin Maney, and Trade-Off, is one of my most viewed posts.  He continues that “vocabulary” creation in this book.  Here is a portion of the glossary from Great by Choice:

A short Great by Choice Glossary:
1)  10Xers – beat their industry, over the long haul, by at least 10 
times
2)  20 Mile March – a set, pre-decided “advance,” on schedule 
(Learned from the daily goal of Roald Admundsen’s team, which trekked a set, pre-determined distance every day, on their way to the South Pole)
3)  SMaC – Specific; Methodical; and Consistent
4)  Bullets and Cannonballs – Bullets – an empirical test aimed at 
learning what works, it meets three criteria: low cost; low risk; low distraction. Cannonballs: big cost, big risk, big focus/energy/distraction.
Two kinds: Callibrated (based on empirical validation) 
vs. Uncallibrated (you don’t want many of these!)
5)  The Death Line – the end, with no coming back. 
(you don’t want this – “duh!”)
6)  Luck – there’s good luck, there’s bad luck. And it is in the 
response to bad luck that the tale is told… ROL – Return on Luck.

I usually summarize a book in a sentence or two.  Here is my “short summary” for this book:

It is the decisions, the choices, made by companies, led by leaders who are crystal clear about what they intend, that set some companies above the others.  Companies are not great by accident – they are great by choice.

Mr. Collins tells the story of Roald Amundsen, who reached the South Pole in 1911 and was the first to “undisputedly” reach the North Pole in 1926.  He prepared himself, and prepared himself, and prepared himself some more, to face any and every difficulty, and then made a critical decision – he and his team would march 20 miles a day toward their goal.  Every day.  If the day’s march was “easy,” they would “rest” at the end.  But not go a step further.  If the day was hard, they would force themselves to make it the full 20 miles, and then collapse.   20 miles a day.  Every day.  He missed the actual daily goal, but reached the destination, and this unbending discipline was critical:

Amundsen clocked in at the South Pole right on pace, having averaged 15.5 miles per day… Having a clear 20 Mile March focuses the mind; because everyone on the team knows the markers and their importance, they can stay on track. …Financial markets are out of your control. Customers are out of your control. Earthquakes are out of your control. Global competition is out of your control. Technological change is out of your control. Most everything is ultimately out of your control. But when you 20 Mile March, you have a tangible point of focus that keeps you and your team moving forward, despite confusion, uncertainty, and even chaos.

This became Collins’ “model” for leadership throughout the book.  Establish the goals.  Make the progress planned for.  Keep moving forward, no matter what…

10x leaders are clear-eyed and stoic, 10xers accept, without complaint, that they face forces beyond their control, that they cannot accurately predict events, and that nothing is certain; yet they utterly reject the idea that luck, chaos, or any other external factor will determine whether they succeed or fail.
and
The 20 Mile March creates two types of self-imposed discomfort: (1) the discomfort of unwavering commitment to high performance in difficult conditions, and (2) the discomfort of holding back in good conditions.

Them, he describes business leaders who have adopted and followed that philosophy.

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. If you set a 20 Mile March and then fail to achieve it — or worse, abandon fanatic discipline altogether — you may well get crushed by events.

In the book, Collins issues a profound warning:

We live in a modern culture that reveres the Next Big Thing… If you always search for the Next Big Thing, that’s largely what you’ll end up doing—always searching for the Next Big Thing.

And, he calls for, in story after story and line after line, focused decisions and a ruthless determination to maintain such focus.  Speaking of Herb Kelleher’s predecessor, the man who set that focus for Southwest Airlines:

Howard Putnam didn’t issue some bland, generic “Southwest Airlines will be a leading low-cost airline” vacuous statement. He specified two-hour segments. He specified 737s. He specified 10-minute turns. He specified no air freight or mail. He specified no food service. He specified no interlining. He specified no seat selection. He specified cash-register receipts. Putnam’s 10 points are easy to grasp, articulate, follow, and understand what to do and what not to do. Putnam laid out a clear, simple, and concrete framework for decisions and action. Putnam’s 10 points reflect insight, based upon empirical validation about what works.

…greatness is not primarily a matter of circumstance; greatness is first and foremost a matter of conscious choice and discipline.

In this book, as in his others, he identifies the exemplar companies.  In this case, the “10xers,” those who beat their industry, over the long haul, by at least 10 
times.  Here’s this list:

• The 10X Companies, (through 2002): Amgen (24.0X) – compare to Genentech; Biomet (18.1X) — compare to Kirschner; Intel (20.7X) — compare to AMD; Microsoft (56.0) — compare to Apple; Progressive Insurance (14.6) — compare to Safeco; Southwest Airlines (63.4) — compare to PSA; Stryker (28.0X) — compare to United States Surgical Corporation, USSC.

And, note the difficulty.

Regarding the selection of Apple as a comparison case, we’re aware that as of this writing in 2011, Apple stands as one of the most impressive comeback stories of all time. Our research lens for the Microsoft-versus-Apple contest focused on the 1980s and 1990s, when Microsoft won big and Apple nearly killed itself. Companies can indeed change over time, from comparison to 10X, and vice versa. It is always possible to go from good to great.

(My observation – maybe Apple was just as “great” in those comparison years.  If you think about Collins’ argument/analogy, Roald Amundsen would not have made his list as a “great” example until he reached the South Pole.  But the years he and his team spent “getting ready” were clearly as important as the year he actually made the journey.  Maybe Apple was “getting ready” in the years they were eclipsed by Microsoft…  But, that’s another discussion…).

Here are some of the key lessons from the book:

The major lessons :
1) 10Xers exemplify fanatic discipline (utterly relentless, monomaniacal, unbending in their focus on their quests)
2) 10Xers exemplify empirical creativity (direct observation, practical experimentation, and direct engagement with tangible evidence)
3) 10Xers exemplify productive paranoia (channeling their fear and worry into action, preparing, developing contingency plans, building buffers, and maintaining large margins of safety).

• A good 20 Mile March has the following seven characteristics:
1. Clear performance markers.

2. Self-imposed constraints.

3. Appropriate to the specific enterprise.

4. Largely within the company’s control to achieve.

5. A proper timeframe—long enough to manage, yet short enough to have teeth.
6. Imposed by the company upon itself.

7. Achieved with high consistency.

And, here are my takeaways from the book, which are included in my synopsis handout:

1)  Cultivate productive paranoia. Assume! that the worst can happen (the worst outside of your control). Prepare for it! (Remember that we function in a VUCA world: Volatile; Uncertain; Complex; Ambiguous – and the greatest of these is uncertain…)
2)  Set your 20 Mile March regimen/routine. Plot it out, do it, stick to it, no matter what! – The long haul, and only the long haul, reveals who is serious, and who will prevail…
3)  Store up plenty of cash…
4)  Be creative enough; innovate enough. And that’s enough. Do the other stuff, with enough innovation, and 
you will endure.
5) And… not in the book, but modeled throughout the book – read widely. Not just a lot – but widely. Read aboutbusiness, and companies; but also read philosophy, and read about mountain climbers and explorers… Learn from a vast array of sources.

Jim Collins is an important author to know, to read.  And, I think that he is right.  To be great, it requires a choice.  Make that a series of choices.  And then, live and behave and “execute” in such a way to honor those choices.  When leaders take the lead in such a choice-driven, disciplined process, a company or organization has a chance to achieve such greatness.

———————

You can purchase many of our synopses, with our comprehensive handouts, and audio recordings of our presentations, at our companion site 15minutebusinessbooks.com.  The recordings may not be studio quality, but they are understandable, usable recordings, to help you learn.
(And though the handouts are simple Word documents, in the last couple of years we have “upgraded” the look of our handouts to a graphically designed format).
We have clients who play these recordings for small groups.  They distribute the handouts, listen to the recordings together, and then have a discussion that is always some form of a “what do we have to learn, what can we do with this?” conversation.  Give it a try.