The Greatest Business Decisions of All Time

1. Greatest Decisions Are About "Who," Not "What"

Fundamentally, the world is uncertain.

People are the greatest hedge. In an uncertain world, the most critical decision a leader can make is about the people they surround themselves with. Having the right team, capable of adapting to unforeseen challenges, is more important than having a perfect plan. Jim Collins emphasizes that his research consistently shows "who" decisions underpin the greatest outcomes.

Examples from the book:

• Wells Fargo CEO Dick Cooley built a strong team in the 1970s, trusting they would figure out how to navigate deregulation when it hit.
• Mount Robson climbers Jim Logan and Mugs Stump succeeded because Logan picked the right partner for an uncertain ascent.
• Apple's decision to bring back Steve Jobs, a founder with unique vision and energy, was fundamentally a "who" decision that revitalized the company.

Leaders must admit "I don't know." Great leaders are comfortable saying "I don't know" until they have the right people and information to figure things out. This humility allows them to tap into the collective intelligence of their team, fostering debate and diverse perspectives necessary for sound decision-making.

2. Counterintuitive Choices Can Change Everything

Many of these great decisions eventually unleashed a storm of imitation—Google now lets employees spend a chunk of their time on their own projects, some 50 years after McKnight at 3M set the precedent.

Going against the grain. The most impactful business decisions often defy conventional wisdom and popular practice at the time they are made. These counterintuitive moves, while risky, can create entirely new directions for companies, industries, and even markets. They challenge the status quo and force competitors to adapt.

Examples of counterintuitive decisions:

• 3M allowing employees to spend 15% of their time on personal projects (daydreaming).
• Intel branding a commodity component (the chip) directly to consumers ("Intel Inside").
• Samsung paying star employees to "goof off" and immerse themselves in foreign cultures.

Unleashing imitation and innovation. While initially met with skepticism, successful counterintuitive decisions often become blueprints for others. Companies like Google adopted 3M's free time policy, and many online retailers copied Zappos' free shipping. These decisions prove that challenging norms can lead to significant competitive advantages and shape future business practices.

3. Extreme Customer Focus Creates Lasting Value

We believe our first responsibility is to the doctors, nurses, and patients, to mothers and fathers and all others who use our products and services.

Customers come first. Companies that prioritize the needs and satisfaction of their customers above all else, including short-term shareholder returns, build enduring trust and loyalty. This deep commitment to the customer can become a powerful competitive advantage, especially in times of crisis or intense competition. It shifts the focus from merely selling products to serving people.

Manifestations of customer obsession:

• Johnson & Johnson's immediate, costly nationwide recall during the Tylenol crisis based on their credo.
• Nordstrom's legendary, no-questions-asked return policy, even for items not bought there.
• Zappos offering free shipping and returns, realizing their advantage was service, not price or selection.

Building relationships and intelligence. Extreme customer focus isn't just about service; it's also a vital source of market intelligence. IBM's "Operation Bear Hug" under Lou Gerstner involved executives meeting customers globally to understand their needs, leading to a strategic pivot towards consulting and solutions. Listening to the customer provides invaluable insights that can reshape a company's direction.

4. Investing in People and Culture Drives Long-Term Success

The HP Way, as it came to be called, instilled teamwork, trust, and risk taking throughout the organization and became a template for how today’s most successful companies, from Starbucks to Google, operate.

Culture as a competitive edge. Companies that make deliberate decisions to cultivate a strong, positive internal culture, built on trust, respect, and employee empowerment, often outperform those focused solely on metrics. This focus on the "how" of working together fosters innovation, loyalty, and a shared sense of purpose that transcends individual tasks.

Examples of culture-building decisions:

• Hewlett-Packard's "HP Way," emphasizing trust, respect, and employee autonomy ("Rule No. 1: Use good judgment").
• GE's investment in Crotonville, a world-class executive education center, to instill corporate values and vision.
• Samsung's regional specialist program, immersing employees in foreign cultures to broaden global perspective.
• Henry Ford doubling workers' wages, viewing them as valuable assets and potential customers.

Empowerment and development. These decisions empower employees, encourage risk-taking, and develop future leaders from within. GE's Crotonville became a pipeline for CEOs, while HP's culture fostered innovation. Investing in employee growth and well-being, even when counterintuitive like Ford's wage hike or Tata Steel's generous downsizing package, can lead to increased productivity, loyalty, and a positive external reputation.

5. Bold, "Bet the Farm" Decisions Define Industries

When Allen decided to launch the 707, he had no orders in hand.

High stakes, high reward. Some of the most transformative business decisions involve risking the company's future on a single, audacious vision or product, often before market demand is proven. These "bet the farm" moments require immense courage and conviction from leaders willing to push beyond incremental improvements and create entirely new possibilities.

Examples of bold bets:

• Boeing CEO Bill Allen investing heavily in the 707 jetliner when airlines weren't interested and Boeing lacked commercial success.
• Eli Whitney pivoting from cotton gins to mass-producing muskets using a revolutionary, unproven system of interchangeable parts.
• Softsoap buying up the entire U.S. supply of plastic pumps to block larger competitors.

Visionary leadership. These decisions are often driven by a leader's intuition about future trends and a belief in their company's ability to execute. Allen's gamble on the 707 foreshadowed Steve Jobs' approach with the iPod, iPhone, and iPad. While risky, success in these moments can fundamentally reshape industries and secure a company's place in history.

6. Strategic Reflection and Learning Are Essential for Leaders

During the six days of Think Week, I did nothing other than reading and sleeping and eating.

Dedicated time for deep thought. Leaders in fast-changing environments need structured time away from daily operations to reflect, learn, and recalibrate strategy. Bill Gates' "Think Week" exemplifies this, providing uninterrupted time to absorb new ideas, evaluate internal projects, and contemplate the future direction of Microsoft. This deliberate pause allows for strategic insights that are impossible in the daily grind.

Mechanisms for learning and adaptation:

• Bill Gates' annual/biannual "Think Week" for reading and evaluating submissions from employees.
• Sam Walton's Saturday morning meeting at Wal-Mart, reviewing weekly numbers and making rapid adjustments.
• IBM's "Operation Bear Hug," forcing executives to reconnect with customers and gather market intelligence.

Rapid learning and action. These practices foster a culture of continuous learning and rapid adaptation. Wal-Mart's Saturday meeting allowed them to make corrections days ahead of competitors. IBM's Bear Hug provided Gerstner with the insights needed to pivot the company's strategy. While the specific methods vary, the underlying principle is that leaders must actively seek information and dedicate time to synthesize it into strategic action.

7. Relentless Pursuit of Quality and Process Excellence Pays Off

Years later Shoichiro Toyoda, now Toyota’s honorary chairman, would explain, “We simply put quality first and follow through with the honest practice of developing quality products and quality people.”

Quality as a foundation. For companies like Toyota and 3M, a deep commitment to quality and continuous process improvement became a core competitive advantage. Toyota's adoption of W. Edwards Deming's principles transformed it from a maker of shoddy cars into a global leader renowned for reliability. This focus on getting things "done right" permeates the entire organization, from manufacturing to management.

Principles of quality and process:

• Toyota's adoption of Deming's total quality management, focusing on reducing defects and treating production as a system.
• 3M's culture of innovation, supported by policies like the 15% rule and dedicated spaces for experimentation.
• Eli Whitney's system of interchangeable parts, revolutionizing manufacturing efficiency and scale.

Beyond the product. Quality isn't just about the final product; it's embedded in the processes and culture. Toyota's production system became a model for manufacturers worldwide. 3M's innovation culture, fostered by allowing employees freedom to explore, led to a stream of successful products. These decisions highlight that investing in how work is done, and empowering employees to improve processes, is crucial for long-term success.

8. Controlling Strategic Bottlenecks Can Thwart Giants

You buy time.

Identify and control critical points. A powerful strategy for smaller companies facing larger competitors is to identify a crucial, limited resource or component in the industry value chain and secure control over its supply. This can effectively block larger rivals from entering or competing effectively, buying the smaller company valuable time to establish its market position.

Examples of bottleneck control:

• Softsoap buying up the entire U.S. supply of plastic pumps needed for liquid soap dispensers.
• John D. Rockefeller purchasing the company that made iron rings for oil barrels.
• Apple securing supply of critical components like flash memory for its devices.

Outmaneuvering the elephant. This tactic allows an "ant" to outmaneuver an "elephant" by creating a temporary, but significant, barrier to entry or expansion. It requires foresight to identify the bottleneck and the financial capacity or nerve to secure control. While competitors may eventually find alternatives, the delay can be decisive in a fast-moving market.

9. Crisis Management is a Test of Core Values

By the time the crisis hit, there was no question in his mind about how to handle it.

Values guide action under pressure. A company's true character and leadership are revealed during a crisis. Decisions made in these high-pressure moments, guided by deeply held values rather than expediency or fear, can define a company's reputation for decades. James Burke's handling of the Tylenol crisis at Johnson & Johnson is the textbook example.

Key elements of crisis response:

• Immediate prioritization of public safety over financial concerns (J&J's nationwide recall).
• Full transparency and open communication with the public and authorities.
• Taking responsibility and implementing necessary changes (tamper-proof packaging).

Building or destroying trust. J&J's decision, rooted in its credo, rebuilt consumer trust and saved the Tylenol brand, despite initial predictions of its demise. Conversely, mishandling a crisis can severely damage a company's reputation and long-term viability. The Tylenol case demonstrates that adhering to core values when it's hardest is the most powerful decision a leader can make.

10. Long-Term Ambition Trumps Short-Term Gains

Those leaders were very clear that their ambition was for the long-term greatness of the company.

Managing for the quarter-century. Great business decisions are often made with a vision extending far beyond immediate financial results or quarterly targets. Leaders who prioritize the enduring health, innovation capacity, and societal role of their company over short-term profits build organizations that achieve sustained greatness and navigate challenges more effectively.

Examples of long-term focus:

• GE's investment in Crotonville, developing leaders for decades to come.
• Tata Steel's generous downsizing package, preserving the company's reputation and easing future transitions.
• Jim Collins' research highlighting leaders who managed for the long term (Grove at Intel, Allen at Boeing, Burke at J&J).

Enduring legacy. This long-term perspective allows for investments in R&D, culture, and people that may not pay off immediately but are crucial for future relevance. Tata's approach, while costly upfront, likely facilitated later international acquisitions by maintaining trust. Prioritizing long-term greatness ensures the company can adapt, innovate, and remain impactful across generations.

Last updated: May 22, 2025