Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part I
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part II
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part III
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part IV
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part V
It is a great pleasure going through Great by Choice. I had been waiting to read the book for quite sometime. The craving to read a book of this caliber was being felt. Personally, I believe that there are very few authors who delve deep into the chaotic changes in business management world, identify the right issues to demystify the chaos around us. Then they present the outcomes to the readers in clear, simple terms. Such books turn out to be highly successful and also greatly help the management practitioners vastly. The books by authors like Jim Collins, Geoffrey Moore, Clayton Christensen, not to forget Peter Drucker, Warren Bennis, Tom Peters amongst others, offer great insights and wisdom. With due respect to Morten Hansen, as I have been more familiar with Jim Collins as an author or co-author, I will continue to review as if this is written by Jim Collins, but the due credit goes to both the co-authors. There are chances that in my exhilarated state of finding such a wonderful book, I may be exaggerating the virtues of the wisdom and knowledge found in the book.
One of the greatest aspect of Jim Collins is that the topic is almost exhaustively researched for long years by 'a small army' of researchers as is the case here. Additionally, the 'topic chooses the authors', so is the case here as was with 'Good to Great'! This is evident in the acknowledgement itself.
The first chapter on uncertainty is aptly titled as 'Thriving in Uncertainty'. Please note the preposition is not 'on' but it is 'in'. In fact, the thrust of the study is not just identifying the factors which contributed to 'greatness' not but in extremely chaotic uncertain times. As the subtitle suggests, the study is about thriving despite all uncertainty, chaos and (mostly, bad) luck! Though in my view, 'Thriving on Chaos', (That was the title of a book by Tom Peters almost a decade back.) is much bigger challenge as the leader is adept and agile enough to navigate through the chaos to achieve success. Definitely, the leaders who thrive 'in' uncertainty will also thrive on chaos, someday! The companies chosen for the study are based on the following three characteristics:
1. The companies performed minimum 10X over at least 15 years over the performance of the companies listed in general stock markets.
2. The companies achieved 10X returns through chaotic conditions in their business environments and
3. The companies started their journey being at vulnerable position.
These are fairly tough criteria to measure the greatness of the organizations. But the authors have a reason. If a great mountaineer is compared with a normal person on leisurely walk, the distinguishing characteristics of the great mountaineer may not be visible. Similar sentiments are offered in Toyota Way literature about when the water is gone, then the river or sea bed offers the true picture. When the conditions are conducive and good; and the challenges are not too demanding, everybody performs! Thus the authors end up with only seven companies, though they started with nearly 20,400 companies. These 7 companies, delivered 600X within 30 years (generally between 1972 and 2002). As an example, Southwest Airlines offered 1,200X value within the 30 years period. The companies chosen are much better in performance than the business publishing darlings like Walmart, GE, Johnson n Johnson, Walt Disney...! The authors also offer disclaimers about the 'dynastic eras' in the companies, they may or might have faded after a leader/ series of leaders have left but the learning from the era/s is/are critical here. In fact, they point to Apple contrasting between John Sculley's era and Steve Jobs' second innings! The companies thus chosen are Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines and Stryker. Intel, Microsoft, Southwest Airlines; and in the comparison companies Apple and AMD, which are deliberately pitted as contrast against Microsoft and Intel, respectively; these are the familiar companies to me.
Giving a brief background on the earlier work and concepts thus derived; the authors talk about the bigger quest to find new truths. However they assure that the earlier concepts remain relevant, those concepts are, namely, Hedegehog Concept, Stockdale Paradox, BHAG (Big Hairy Audacious Goal), First-who-then-what and Flywheel. Level 5 Leadership finds a critically important role in this book too! According to the authors, earlier the thrust was on humility of the Level 5 Leadership; now the thrust is on the enduring quest driving the Level 5 Leadership.
The companies under study are aptly named as 10Xers, the chapter introducing the companies and the introduction to the key findings takes off with Roald Amundsen's quote on victory which is akin to Sun Tzu's quote on victory for the general who knows self, the terrain and the enemy.
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part II
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part III
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part IV
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part V
It is a great pleasure going through Great by Choice. I had been waiting to read the book for quite sometime. The craving to read a book of this caliber was being felt. Personally, I believe that there are very few authors who delve deep into the chaotic changes in business management world, identify the right issues to demystify the chaos around us. Then they present the outcomes to the readers in clear, simple terms. Such books turn out to be highly successful and also greatly help the management practitioners vastly. The books by authors like Jim Collins, Geoffrey Moore, Clayton Christensen, not to forget Peter Drucker, Warren Bennis, Tom Peters amongst others, offer great insights and wisdom. With due respect to Morten Hansen, as I have been more familiar with Jim Collins as an author or co-author, I will continue to review as if this is written by Jim Collins, but the due credit goes to both the co-authors. There are chances that in my exhilarated state of finding such a wonderful book, I may be exaggerating the virtues of the wisdom and knowledge found in the book.
One of the greatest aspect of Jim Collins is that the topic is almost exhaustively researched for long years by 'a small army' of researchers as is the case here. Additionally, the 'topic chooses the authors', so is the case here as was with 'Good to Great'! This is evident in the acknowledgement itself.
The first chapter on uncertainty is aptly titled as 'Thriving in Uncertainty'. Please note the preposition is not 'on' but it is 'in'. In fact, the thrust of the study is not just identifying the factors which contributed to 'greatness' not but in extremely chaotic uncertain times. As the subtitle suggests, the study is about thriving despite all uncertainty, chaos and (mostly, bad) luck! Though in my view, 'Thriving on Chaos', (That was the title of a book by Tom Peters almost a decade back.) is much bigger challenge as the leader is adept and agile enough to navigate through the chaos to achieve success. Definitely, the leaders who thrive 'in' uncertainty will also thrive on chaos, someday! The companies chosen for the study are based on the following three characteristics:
1. The companies performed minimum 10X over at least 15 years over the performance of the companies listed in general stock markets.
2. The companies achieved 10X returns through chaotic conditions in their business environments and
3. The companies started their journey being at vulnerable position.
These are fairly tough criteria to measure the greatness of the organizations. But the authors have a reason. If a great mountaineer is compared with a normal person on leisurely walk, the distinguishing characteristics of the great mountaineer may not be visible. Similar sentiments are offered in Toyota Way literature about when the water is gone, then the river or sea bed offers the true picture. When the conditions are conducive and good; and the challenges are not too demanding, everybody performs! Thus the authors end up with only seven companies, though they started with nearly 20,400 companies. These 7 companies, delivered 600X within 30 years (generally between 1972 and 2002). As an example, Southwest Airlines offered 1,200X value within the 30 years period. The companies chosen are much better in performance than the business publishing darlings like Walmart, GE, Johnson n Johnson, Walt Disney...! The authors also offer disclaimers about the 'dynastic eras' in the companies, they may or might have faded after a leader/ series of leaders have left but the learning from the era/s is/are critical here. In fact, they point to Apple contrasting between John Sculley's era and Steve Jobs' second innings! The companies thus chosen are Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines and Stryker. Intel, Microsoft, Southwest Airlines; and in the comparison companies Apple and AMD, which are deliberately pitted as contrast against Microsoft and Intel, respectively; these are the familiar companies to me.
Giving a brief background on the earlier work and concepts thus derived; the authors talk about the bigger quest to find new truths. However they assure that the earlier concepts remain relevant, those concepts are, namely, Hedegehog Concept, Stockdale Paradox, BHAG (Big Hairy Audacious Goal), First-who-then-what and Flywheel. Level 5 Leadership finds a critically important role in this book too! According to the authors, earlier the thrust was on humility of the Level 5 Leadership; now the thrust is on the enduring quest driving the Level 5 Leadership.
The companies under study are aptly named as 10Xers, the chapter introducing the companies and the introduction to the key findings takes off with Roald Amundsen's quote on victory which is akin to Sun Tzu's quote on victory for the general who knows self, the terrain and the enemy.
The study is about the epic quests to achieve greatness. To glean the learning, it is aptly supported by Roald Amundsen's quest of the South Pole contrasted with Robert Falcon Scott's failure. On the way, we also come across similar, yet not so much celebrated expeditions. Amundsen, while preparing himself for the expedition went to extreme extents. Some examples are riding the bicycle for 2,000 miles, eating raw dolphins to familiarize with food if no choice exists, interning with Eskimos to handle dogs and acquainting with the Eskimos to leverage their life experiences and learning passed on through generations. The intensity and empirical creativity of Amundsen was not matched by Scott, who chose ponies to drag the sledges. The ponies had at least two disadvantages over dogs, the threat of ice formation on skin between hair and normal food of grass v/s meat for the dogs.The motor sledges used by Scott were not thoroughly tested for the extreme conditions of the South Pole. In terms of buffers, positions of depots, guideposts, etc., while Amundsen was prepared for the worst and Scott was lacking. To give an example, whereas Amundsen had food buffer of 3 tonnes for 5 men; Scott had 1 tonne for 17 men! Amundsen had planned the depots and buffers in such a way, even if the men missed all the meticulously guided depots they could still go 100 miles. In a dramatic contrast, Scott's team had tragic deaths just a few miles away from one of their depots! Amundsen reached the South Pole on the 15th December 1911 and Scott reached the South Pole on the 17th January 1912!
The authors offer critical insights for the winners on the backdrop of Amundsen's and Scott's expeditions. They had almost the same circumstances. They had the same share of good days and bad days. The outcomes were exactly opposite! The critical insight, there were differences in behaviors but not in the circumstances. The great ones are no more creative, visionary, charismatic, ambitious, lucky, risk seeking, heroic than the ones who failed. The difference lie in the behaviors! After establishing the effect of behaviour rather than the circumstances, the authors proceed to the findings of the study.
Markets swing to extremes based on various factors. Progressive Insurance's market value used to swing to extremities. The solution by Peter Lewis, the CEO of Progressive Insurance was to bring out monthly financial statements. A proactive behavior to rein in the conditions beyond control can come only to the minds which are on the quest to address fundamental issues. These minds have the capability to see through the layers of mechanisms and come out with solutions. In addition, they should have the capability to execute their idea flawlessly and consistently in a sustained manner. Only, then the conditions beyond control can be tamed. This can be only possible by the ones who can demonstrate 'fanatic discipline', which, others feel is not required in the prevailing conditions. The parallels which come to my mind which are not in this book are: Jamshed Tata's efforts in setting up the Steel Plant in Jamshedpur, which is Tata Steel now; the same may be said about JRD Tata's Tata Airlines which became Air India later, Amazon's Jeff Bezos continued thrust on investments and Google's Page n Brin's Google Labs. Such fanatic discipline leads to consistency in action which in turn sets the pace for victory march unhindered by the forces beyond control. The authors could find similar discipline in Herb Kelleher, who strongly emphasized on 'Warrior Spirit'! The authors find that fanatic discipline is shaped by values, purpose and severe performance standards. Definitely, such a behavior diverges from normal behavior!
To highlight empirical creativity shown by 10Xers the authors take up Andy Grove's personal experience of addressing the issue of his own health condition, when he was diagnosed of having cancer. Unlike other patients, Andy Grove addressed his issue by learning everything about it. He arrived at his own solution to address his condition. Andy Grove's efforts highlight his quest to address the issue by going to the core of it, observing the prevailing practices and devising his own solution on the basis of the current incomplete understanding. These basic characteristics of Andy Grove's efforts highlight empirical creativity of 10Xers. In the case of Roald Amundsen's expedition to South Pole, Bay of Whales was never considered the appropriate base for the expedition. Amundsen arrived at the conclusion to make it as the base. I noticed in wikipedia that, in fact, Scott also was offered to make Bay of Whales as his base, which was declined. Such empirical creativity based on much deeper pragmatic considerations may sound contrary to prevailing practices; many times, such creativity determines the winners. 10Xers displayed empirical creativity repeatedly.
For me productive paranoia has been a great concept, thanks to Andy Grove's 'Only the Paranoid Survive'. The beauty of 'Great by Choice', is that the concepts are rigorously studied and well supported with the facts from diverse backgrounds. Productive paranoia has been highlighted using Microsoft in '80s. When the underwriters and valuers approached Microsoft in its heydays for IPO, they were wondering how to make the management appreciate the risks of business. But they were surprised by the candor of Steve Ballmer in raising his own concerns on various risks. In fact, one of the team members considered Ballmer as a nightmare hero! The authors contrast Sculley's 9 weeks vacation soon after he set Apple in order! Bill Gates' own apprehensions about preparedness for internet era is well documented. In my view, such paranoia will keep the 10Xers on edge always for the events around, which in turn, makes them extremely sensitive to the signals which portend disruptive changes. The sensitivity enables them to prepare the organization to arrive at appropriate adaptive methods, as the disruptive changes evolve. As the disruptive changes are getting more frequent; such paranoia, which is quite healthy for 10Xers, is needed by the organizations.
Level 5 Ambition, which has been introduced in Good to Great is the driving force behind the 10Xers. The Level 5 Leaders are deeply committed to a much bigger purpose than short term gains like quarterly performances, fluctuations in market cap, their own incomes,... though they are the basic necessities for survival. The authors emphasize that Dave Miller of Biomet was one of the CEOs of high performance companies with the least compensation. His aversion to greed is highlighted. The level 5 ambition is summed up in Gordon Moore's 'What are we in it for?' quote. The 10Xer leaders are driven more by changing the world or a bigger purpose.
The key aspects of the book are the facts driven rigorous analyses and appropriate case studies to highlight to drive the concepts to the readers. The data from the research are shared with the readers at the end of the book.
The data for fanatic discipline provides insights into the wide fluctuation of performance in comparison companies and consistency in 10Xers. In fact, the data gives an insight about the causes of such divergence among the companies. Whereas 10Xers seem to have developed processes and systems to ensure consistent performance irrespective of the changes outside. Eventually, the genetic make up of the organization is defined in 10Xers case. The comparison companies seem to be driven either by individual leaders and their idiosyncrasies or by the compulsions. Additionally, comparison companies miss the opportunity to institutionalize the learning and consequent capability building.
The data for empirical creativity points to pragmatism, data driven approach, deliberate proactive decision making and near flawless execution in 10Xers. Comparison companies, in contrast, seem to be driven by compulsion or hubris while taking plunge in new ventures. Adherence to deliberate decision making is missing and there are far fewer flawless executions by comparison companies. There seems to be failure with respect to institutionalizing improvements within the comparison companies.
The productive paranoia highlights the 10Xers avoidance of high risks both qualitatively and quantitatively. The comparison companies demonstrate tendency to embrace higher risks and also fail badly on execution aspects. 10Xers seem to have mastered the art of choosing the right risks and also deliver well!
The Level 5 leadership data emphasizes adoption and adherence of Systematic, Methodical and Consistent (SMaC) recipe within the 10Xers. Additionally, there are fewer changes in the SMaC recipe in 10Xers. The comparison companies' adoption or/and adherence to SMaC recipe is relatively lower and the changes in SMaC recipe is higher. This points out to the fact that SMaC recipe development itself is based on shallower truths and additionally the will to execute well and wherewithal are lacking in comparison companies.
In this part, the overview of the book is offered. Later, we will go deeper into the concepts. The reading of the book takes us deeper into the psyche of 10Xers and the leaders. I personally looked forward to deeper analyses and insights into Level 5 Leadership. I feel that, there is a need for an exhaustive book on Level 5 Leadership and I hope that Jim Collins will take care of that. Good to Great offered the right habits for the organizations to achieve greatness starting from being 'good enough'. Great by Choice, goes deeper and offers more fundamental aspects of great organizations, namely, Fanatic Discipline, Empirical Creativity, Productive Paranoia and the central drive, Level 5 Leadership. In my view, Level 5 Ambition of the leaders is the bed rock of emergence of great companies.
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part I
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part II
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part III
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part IV
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part V
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