Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part III
The chapter, First Bullets, then
Cannon Balls, starts with the innovations brought in by PSA (Pacific Southwest Airlines). PSA innovated by ensuring
reliable, simple, safe, fast, fun filled air travel at cheaper rates. South
West Airlines (SWA) sought permission to study PSA and simply copied PSA’s
almost entire business model. While SWA
continues to thrive in the market, PSA as an independent airline doesn’t exist.
The authors discover a big surprise that innovation doesn’t necessarily lead to
success! Whereas they found that SWA, Amgen, Stryker, Intel, Microsoft were no
better innovators than their comparison companies. They also reveal the secret of success in the
statement of John Brown of Stryker that it is ‘best to be one fad behind’ and in
my view, have the best mover advantage than the first mover advantage. The
authors also refer to the findings of Tellis
& Golder? in their Will and Vision, that only 9% of the pioneer innovators
were successful whereas 64% pioneers failed outright! They reveal te following
facts from the book: Star was the pioneer in disposable shaving sets; not
Gillette, Dubroni was the pioneer in instant cameras; not Polaroid, Visicorp
was the pioneer in spreadsheet; not
Microsoft. They also get a quote from Bill Gates that the belief of innovation
as the centerpiece is the stupidest remark. The beauty of the book is in
building the theory on the bedrock of facts observed in the study and then
presented as contrast to the commonly held beliefs for better impact.
In the next part of the chapter
they deliver the secret of creativity supported by discipline. In the authors'
words, ‘blend of creative intensity with relentless discipline to amplify the
creativity than destroy’ As an apt example, they offer Andy Grove’s McIntel
vision, which is an optimum combination of discipline and creativity. AMS (an
earlier avatar of AMD) was the first to come out with 1Kb memory chip, but
ultimately Intel succeeded. Because Intel Delivered! The thrust is on execution
rather than just the idea itself. According to the authors, innovation without
discipline leads to disaster. They also quote from Leslie Berlins ‘The Man
Behind the Microchip’, ‘… orderly steps
in controlled manner’ led to Intel’s success.
On the basis of the above facts,
the authors propose empirical creativity as, first bullets, then cannon balls.
They first offer a very graphical account of visuals associated to a ship navigating in troubled waters. Such a ship first tries bullets to gauge the enemy; once the ship's crew has the enemy vessel in it's cross hairs, it blasts the cannonballs! They
also offer Amgen’s early days, which came out with multiple small innovations
before launching their big innovation, erythropoietin (EPO). I am not so familiar with healthcare sector. But I believe, if the same study would have been
conducted now, I think Google would have definitely qualified as one of the
very few ‘Great by Choice’ companies. Then Google Labs would have been
qualified as an apt example of bullets and cannonballs. In my view, this
approach was mastered by 3M decades back to ensure flawless execution of
innovations of 3M employees. The bullets are characterized by being low in
cost, distraction and risk. In my view, many lean initiatives, especially in
high tech startups, adhere to Minimum Viable Products (MVPs), which are bullets
here and ‘pivoting’ which is the process of calibration here. And then there
are big launches of calibrated cannonballs! They contrast such disciplined
approach of 10Xers with Kirschner’s uncalibrated cannonball gamble of takeover
of Chick Medical which was at 70% of its market capital at that time!
They bring the cautionary tales of
‘the dangerous lures of uncalibrated cannon balls'. Calibration is akin to MVPs
and pivoting being followed by startups. They rattle the statistics of 10Xers
with comparison companies: 10Xers fired calibrated cannonballs 69% of the times
against 23% by the others. 10Xers succeeded 88% of the times with calibrated
cannonballs against 23% by the others. The authors claim that this is 4X better
success rate for both types of companies. In the light of these facts, my
belief is that the decision making is thoroughly data driven and execution is highly disciplined in 10Xers. In my view, this is the biggest take away here.
The authors offer PSA’s gambits
of Fly-Drive-Sleep in 1968, where in it had a JV with motels to offer complete
solution to fliers and expand the market. In 1970s it bought 5 L1011 super wide body
jumbos; a JV planned with Brainiff and acquisition of McDonnell Douglas fleet
as uncallibrated cannonballs. Combined with these gambits and many other moves by
PSA, led to its insolvency in 1975. The authors suggest that the dangers of
achieving good outcome from bad processes are far too high. Implementing good
processes in spite of a few bad outcomes is very much necessary to build great
organizations. In my view, lean management practices in sync with Toyota Way of
continuous implementation and improvement of processes is the solution to build
10X organizations.
It is not that 10Xers never
launch uncalibrated cannonballs. The authors offer SWA’s acquisition of Muse
Air and Intel’s deviation from RAM Bus technology in 1990s as uncalibrated
cannonballs by 10Xers. The 10Xers treat such follies as expensive tuition and
learn and adapt. According to the authors, the 10Xers always seek empirical validation.
Amundsen leveraged empirical validation of dogs and sleds by Eskimos; and SWA
learnt from PSA’s practices. They conclude that 'what works in practice' ie.
Empirical validation is much better than being the first mover or/and the most
innovative. So the stress moves towards flawless execution from mere
innovation.
The authors distinctly differentiate between, Empirical Validation and the Genius of Prediction. Peter Drucker's 'Only way to predict future is to make it happen!' gets re-emphasized. They offer an apt example of Microsoft. I particularly liked the quote, Bill Gates was (and is) 'smart enough know that he wasn't smart enough!' from 'Hard Drive' and 'The waiting game that MicroSoft can't lose' article appeared in Business Week's 12/9/1985 edition. The authors offer a specific example of OS/2. It was predicted by Bill Gates, that it would be a game changer, and that was the general mood prevalent at that time. I used to follow these trends at that time. Windows development was more like a bullet fired to check the hypothesis of compatibility issue with existing DOS base. (One may as well argue that Bill Gates was shrewd enough to develop blockbuster OS for himself. But MicroSoft was a minion before giant IBM, and for any product's success, huge investment was needed.) In 1989, Windows sold 1 million copies in 4 months v/s OS/2's 300K in 3 years! Windows reached 1 million per month in 1992 and ultimately, when Windows95 was launched it sold 1 million copies within 4 days! That is a big justification for Minimum Viable Products (MVP) and pivoting in tech startups. In my view, MVP and pivoting are equivalent to bullets, calibrated cannonballs respectively.
At the end of the chapter, the authors offer a brief case study of Apple's 'rebirth'. As it is widely known and commented repeatedly by Steve Jobs' near ones. The biggest change in Jobs when he returned to Apple was his discipline. My own understanding after reading Steve Jobs by Walter Isaacson is captured in the review. After the failure of NeXT, Jobs emerged as fanatically disciplined and also emphasized on identifying the best talent to delegate execution aspects. In my view, Pixar journey and subsequent success was the greatest learning point for Steve Jobs.
Steve Jobs' initial focus was on Power series Macs. As it is mentioned in other literature, the inspiration for iPod was Napster. In my view, Steve Jobs came up with much bigger vision to create an ecosystem. The ecosystem already had the right subsystems available, ie., small hard drive from Toshiba, mini batteries from Sony, FireWire interface from Texas Instruments and MP3 hardware from PortalPlayer. iPod launch was just a bullet. The genius of Steve Jobs was in connecting the dots and shooting the bullet. The authors note that upto 2002, iPod contribution to net sales was hardly 3%. The cannonballs of iPod variants and iTunes were launched after calibration. In my view, iPod variants launch was more in tune with Geoffrey Moore's specific advice of +1 strategy while at the Main Street phase of the technology adoption cycle. It is interesting to note how far the +1 strategy went, the variants are 30/60/80GB, Mini, Click, Photo, Shuffle, Nano,... I will rather call both Andy Grove and Steve Jobs as pragmatic paranoids! Whereas, in 2002 Apple outperformed the stock markets by more than120%, it became the most valuable company in 2010 and recently in September 2013 Apple was recognized as the most valuable brand by Interbrand.
Each of these lessons hold great potential for the 10X organization leaders! I am eager to share the other lessons in the next parts!
Journey Unto Greatness Demystified!: A Review of 'Great by Choice' by Jim Collins and Morten T Hansen Part III
Ang Lee's spectacular adaptation of Yann Martel's Life of Pi takes us through the magical journey of Pi. Yann Martel's story is woven with fine threads of rationality and spirituality crisscrossing each other resulting in a beautiful fabric bordering on reality and beyond. 
