Great by Choice

What's Great by Choice about?

• Thriving in Chaos: Great by Choice explores why some companies succeed in uncertain and chaotic environments while others fail, emphasizing that success is not just about luck but disciplined choices.
• Research-Based Analysis: Authors Jim Collins and Morten T. Hansen conducted a nine-year research project, analyzing companies that achieved exceptional performance in turbulent times, known as "10Xers."
• Key Concepts: The book introduces concepts like the "20 Mile March," "Fire Bullets, Then Cannonballs," and "SMaC" (Specific, Methodical, and Consistent) recipes, which are frameworks for building resilient organizations.

Why should I read Great by Choice?

• Practical Frameworks: The book offers actionable frameworks and principles applicable to any organization, helping leaders navigate uncertainty and chaos effectively.
• Real-World Examples: It includes compelling case studies of successful companies like Southwest Airlines and Intel, illustrating how they implemented the principles discussed.
• Timeless Lessons: The insights are relevant for any organization facing unpredictability, making it a valuable read for leaders in various fields.

What are the key takeaways of Great by Choice?

• Productive Paranoia: Successful leaders maintain a state of productive paranoia, preparing for unexpected events and managing risks effectively.
• 20 Mile March Principle: Companies should set consistent performance markers and adhere to them, regardless of external pressures, to maintain stability and growth.
• Fire Bullets, Then Cannonballs: Organizations should test ideas with low-risk experiments before committing substantial resources, reducing the risk of failure.

What is the "20 Mile March" concept in Great by Choice?

• Consistent Performance Goals: The "20 Mile March" involves setting specific, achievable performance goals that an organization commits to meeting consistently over time.
• Self-Imposed Constraints: It includes establishing both a lower and upper bound to ensure sustainable growth, allowing organizations to weather storms without compromising core values.
• Examples of Success: Companies like Stryker and Southwest Airlines exemplified the 20 Mile March by achieving consistent growth and profitability, even during industry downturns.

How does Great by Choice define "SMaC"?

• Specific, Methodical, and Consistent: SMaC stands for a set of durable operating practices that create a replicable success formula, emphasizing clarity and consistency in decision-making.
• Enduring Practices: A SMaC recipe includes specific practices that guide an organization over time, allowing it to adapt while maintaining core principles.
• Examples from Companies: Southwest Airlines maintained its SMaC recipe through specific operational practices, ensuring long-term success despite external challenges.

What does "Fire Bullets, Then Cannonballs" mean in the context of Great by Choice?

• Empirical Testing: This concept encourages starting with low-cost, low-risk experiments (bullets) to test ideas before committing significant resources (cannonballs).
• Calibrated Decisions: Once a bullet proves successful, organizations can confidently allocate resources to a larger initiative, reducing the risk of failure.
• Real-World Application: Companies like Amgen used this approach by testing various products before launching their blockbuster drug, EPO.

How do luck and preparation interact in Great by Choice?

• Luck is Unpredictable: While luck plays a role in success, it is often the preparation and actions taken by leaders that determine how well an organization can capitalize on lucky breaks.
• Return on Luck: Successful companies do not necessarily have more luck but are better at leveraging the luck they encounter.
• Examples of Preparedness: Leaders like David Breashears illustrate how preparation and resilience can turn potentially disastrous situations into opportunities for success.

What role does "productive paranoia" play in leadership according to Great by Choice?

• Anticipating Change: Productive paranoia involves a heightened awareness of potential threats and uncertainties, prompting leaders to prepare for unexpected challenges.
• Building Buffers: Leaders create financial and operational buffers to withstand shocks, ensuring their organizations can endure turbulent times without collapsing.
• Examples of Success: Companies like Intel and Southwest Airlines exemplify this principle by maintaining conservative financial practices and preparing for potential disruptions.

What are some myths debunked in Great by Choice?

• Myth of Bold Visionaries: The book challenges the notion that successful leaders are bold, risk-seeking visionaries, finding that effective leaders are often disciplined and cautious.
• Innovation Isn't Everything: 10X companies are not necessarily more innovative than their less successful counterparts; they focus on executing well and scaling their innovations effectively.
• Speed Isn't Always Key: Rapid decision-making is not always beneficial; taking the time to make informed decisions can lead to better outcomes, especially in uncertain environments.

What is the concept of "Return on Luck" in Great by Choice?

• Luck as a Factor: "Return on Luck" (ROL) is the ability of organizations to capitalize on good luck and mitigate the impact of bad luck.
• 10X Companies vs. Comparisons: 10X companies excel in leveraging the luck they receive, demonstrating superior execution and decision-making.
• Key to Success: The critical question is not whether a company is lucky, but how effectively it can convert luck into positive outcomes.

How do the authors compare 10X companies to their counterparts?

• Matched Pairs Analysis: The authors use a matched-pair case study methodology, selecting pairs of companies similar in industry, size, and age but differing in performance outcomes.
• Key Differentiators: 10X companies are set apart by disciplined execution, effective risk management, and a strong organizational culture.
• Empirical Evidence: The findings are supported by extensive historical documentation and data analysis, providing a robust foundation for the conclusions drawn.

What are the best quotes from Great by Choice and what do they mean?

• “We simply do not know what the future holds.”: This quote underscores the book's central theme of uncertainty and the importance of preparing for the unpredictable.
• “The best—perhaps even the only—way to predict the future is to create it.”: This emphasizes the proactive approach leaders should take in shaping their organizations' destinies.
• “Victory awaits him who has everything in order—luck people call it.”: This highlights the relationship between preparation and luck, suggesting that success often comes to those who are well-prepared to seize opportunities.