Great by Choice

Great by Choice: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All

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In unpredictable business environments, companies that are well prepared prevail.

Don’t let conditions determine your success; prepare to survive and thrive in any environment

10 April, 2016 19:08 Share

Companies that thrive in uncertainty rely on discipline, evidence-based innovation and preparedness based on paranoia.

First, 10Xers display fanatic discipline. Discipline in this context does not mean everybody in the organization obeying orders but rather consistency in action.

10 April, 2016 19:09 Share

Likewise, once 10X leaders identify their goals and preferred methods, they stick to them doggedly.

10 April, 2016 19:10 Share

10Xers use empirical creativity when making decisions. What matters is evidence. They aren’t interested in others’ opinions or following the established consensus, but in finding out what really works.

10 April, 2016 19:10 Share

Productive Paranoia helps 10Xers survive changes in their competitive environment. Their leaders remain hypervigilant; they are never comfortable but always fearful of what might go wrong.

10 April, 2016 19:11 Share

Likewise, 10Xers channel their fears to create policies that prepare their companies for difficult times.

10 April, 2016 19:11 Share

10X companies set themselves targets which they hit precisely year after year – no matter what the conditions.

When twenty-mile marching, the pressure is always on: the marker must be met in difficult times, but must not be overshot in favorable ones. Though this may seem counterintuitive, it is crucial – and it takes self-discipline. Push too hard and your company may become unbalanced and unable to adapt to changing circumstances.

10 April, 2016 19:12 Share

They will then drive themselves to reach this target consistently through both good and bad times.

10 April, 2016 19:13 Share

10Xers are bold and innovative, but only when the evidence supports such a tactic.

This so-called empirical creativity is implemented through a policy of firing first bullets, then cannonballs. A 10X company will first test the market with a series of low-risk, low-cost innovations, essentially firing many ‘bullets’ in many directions. Once a good target has been identified they then pursue that opportunity with full force: they fire cannonballs to smash it.

10 April, 2016 19:14 Share

Innovation isn’t everything; it must be combined with discipline in business practice.

Of course, every company must innovate to a certain degree, and every industry has an innovation threshold:a level of innovation firms must meet to avoid being left behind by their competitors. This threshold is higher in some industries than in others. The information-technology industry, for example, has a relatively high innovation threshold. Products become obsolete quickly, so companies must innovate constantly to stay competitive

10 April, 2016 19:15 Share

innovation at higher levels seems to bring little advantage. This is because a company that focuses too much on innovation will become unbalanced.

10 April, 2016 19:17 Share

What is needed is the discipline to ensure that all areas of business, such as manufacturing, marketing or accounting, are given the attention they require.

10 April, 2016 19:17 Share

Innovation isn’t everything; it must be combined with discipline in business practice.

10 April, 2016 19:18 Share

10Xers are ‘productively paranoid’ – they fear the worst and obsessively prepare for it.

This vigilance enables them to develop a deep understanding of their industry, which, combined with their obsessive preparation, gives them a huge competitive advantage. It allows them to identify the defining situations on the horizon and take advantage of them.

10 April, 2016 19:19 Share

One way 10Xers prepare for difficult times is by hoarding huge reserves of cash. On average, their ratio of cash to assets is three to ten times higher than their competitors.

10 April, 2016 19:19 Share

10X companies create durable and specific operating procedures which breed consistency and success.

10Xers are experts at developing SMaC operating procedures. They base their lists on the huge amount of empirical evidence they collect, knowing what procedures will work and which will not.

10 April, 2016 19:21 Share

Final summary

It’s this mixture of consistency and evidence-based analysis that allows some companies show long-term success in a chaotic world.

10 April, 2016 19:23 Share

About the book:

The world is an uncertain place, constantly changing and often chaotic. While many companies are unable to survive in this chaos, some companies are not only able to survive in these shifting conditions but even thrive in them. Great by Choice analyses why these companies succeed while most others fail.

Great By Choice is the result of exhaustive, in-depth research into the business environment. It argues that success is not the result of a company being more innovative, bold or open to taking risks, nor is it a result of mere luck or chance. Success in fact comes from a mixture of discipline, evidence-based innovation and a fear of failure that borders on paranoia. It is this recipe, rather than luck, which enables certain companies to become great.

About the author:

Jim Collins is a business consultant and author of many bestsellers including Good to Great and Built to Last. His books have sold over ten millions copies worldwide. He now operates a management laboratory where he conducts research and teaches.

Morten T. Hansen is a management professor at the University of California. He is the author of Collaboration: How Leaders Avoid the Traps, Build Common Ground and Reap Big Results. He consults and gives talks for companies across the globe.

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