This is a very timely, inspiring, and practical book for leading in turbulent times. It’s the culmination of a nine year research project that began in 2002 “in the aftermath of 9/11 and the bursting stock bubble, watching the exponential rise of global competition and the relentless onslaught of technological disruption, hearing the rising chant of ‘change, change, change…'”
While a faculty member at Harvard Business School, Morten Hansen provided Jim Collins with input on his seminal book, Good to Great. In the turbulent times after 9/11, they talked further about their strong sense that “uncertainty is permanent, chaotic times are normal, change is accelerating, and instability will likely characterize the rest of our lives.”How true that’s proved to be in the last 10 years!
The central question that began the nine year research quest and led to publishing Great by Choice, was why do some thrive in the face of immense uncertainty, even chaos, and others do not?So they looked for companies that started in vulnerable positions and rose to spectacular performance in dangerously fast changing, unstable environments with major events and forces outside of their control. Sounding familiar?
As with Collins’ first book, Built to Last, and with Good to Great (read my review of both books on LinkedIn or The Leader Letter archive), they compared the outstanding companies to a control group of comparison companies in the very same industries and extreme environments that failed to thrive. Many failed altogether and are no longer with us. They started with a list of 20,400 companies and went through 11 stages of cutting, screening, and shifting to identify the “10Xers.” They called them “10 times companies” because they didn’t merely get by or just become successful. They truly thrived. Every 10X case beat its industry index by at least 10 times.” During the 30 year period of this research study, the 10Xers beat their industry stock performance indices by 32 times! Where’s that time traveling machine to go back and make those investments?
The book is structured around the main finding of the research. This boils down to three core behaviors:
- “Fanatic discipline: 10Xers display extreme consistency of action — consistency with values, goals, performance standards, and methods. They are utterly relentless, monomaniacal, unbending in their focus on their quests.
- Empirical creativity: When faced with uncertainty, 10Xers do not look primarily to other people, conventional wisdom, authority figures, or peers for direction; they look primarily to empirical evidence. They rely upon direct observation, practical experimentation, and direct engagement with tangible evidence. They make their bold, creative moves from a sound empirical base.
- Productive paranoia: 10Xers maintain hyper-vigilance, staying highly attuned to threats and changes in their environment, even when — especially when — all’s going well. They assume conditions will turn against them, at perhaps the worst possible moment. They channel their fear and worry into action, preparing, developing contingency plans, building buffers, and maintaining large margins of safety.”
The authors also found that “underlying the three core 10Xer behaviors is a motivating force: passion and ambition for a cause or company larger than themselves. They have egos, but their egos are channeled into their companies and their purposes, not personal aggrandizement.”
An especially fascinating chapter reports their findings on what role luck played in the 10Xers success and the failure of their comparison companies. They concluded:
“The best leaders we’ve studied maintain a paradoxical relationship to luck. On the one hand, they credit good luck in retrospect for having played a role in their achievements, despite the undeniable fact that others were just as lucky. On the other hand, they don’t blame bad luck for failures, and they hold only themselves responsible if they fail to turn their luck into great results. 10Xers grasp that if they blame bad luck for failure, they capitulate to fate. Equally, they grasp that if they fail to perceive when good luck helped, they might overestimate their own skill and leave themselves exposed when good luck runs dry. There might be more good luck down the road, but 10Xers never count on it.”
Great by Choice is very aptly titled. Collins and Hansen present incredibly strong evidence through their exhaustive research (which included reviewing 7,000 historical documents!) that it’s not what happens to us but what we do about it; “…this study shows that whether we prevail or fail, endure or die, depends more upon what we do than on what the world does to us…every 10Xer made mistakes, even some very big mistakes, yet was able to self-correct, survive, and build greatness.”