Tag Archive for Collins

Quotable

“10Xers [leaders who built enterprises that exceeded industry averages by at least 10 times] do not look to conventional wisdom to set their course during times of uncertainty, nor do they primarily look to what other people do, or to what pundits and experts say they should do.  They look primarily to empirical evidence. . . .By ‘empirical,’ we mean relying upon direct observation, conducting practical experiments, and/or engaging directly with evidence rather than relying upon opinion, whim, conventional wisdom, authority, or untested ideas.”(Collins & Hansen, 2011, pp. 25-26)

Collins, J., & Hansen, M. T. (2011). Great by Choice:  Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All. New York, NY: Harper Collins Publishers.

 

Great by Choice, by Jim Collins & Morten Hansen

Great by Choice book coverJim Collins’ most recent work, Great by Choice, is intended to answer the question, “Why do some companies thrive in uncertainty, even chaos, and others do not?”  In this book, Collins’ research focused on a comparative study between organizations with growth that exceeded industry norms over a 15 year or more time period, and similar organizations that struggled or failed during the same time period.  He determined that the differences between these comparison companies boiled down to three core behaviors, which he labeled as fanatic discipline, empirical creativity, and productive paranoia, with an underlying motivation of “passion and ambition for a cause or company larger than themselves.” (p. 37)

Fanatic discipline is described as “consistency of action – consistency with values, goals, performance standards, and methods.” (p. 36) It is explained with the concept of a 20-mile march, or “hitting specified performance markers with great consistency over a long period of time.” (p. 65) This means setting minimum thresholds of achievement, even in difficult times, while also applying self-imposed constraints to keep from over-extending, even in good times. Empirical creativity is described as “relying up direct observation, conducting practical experiments, and/or engaging directly with evidence rather than relying upon opinion, whim, conventional wisdom, authority, or untested ideas.” (p. 26) It is explained with the concept of firing bullets, then cannonballs, which involves testing ideas in a low-risk and low-cost manner, using that information to empirically validate what will actually work, and then concentrating resources on those ideas that have been validated.  Productive paranoia is described as “hyper-vigilance, staying highly attuned to threats and changes in the environment, even when – especially when – all’s going well.” (p. 37)  It is explained using the concept of “leading above the death line,” which means there is an assumption that great difficulty can happen at any time without predictability, therefore decisions, discipline, and buffers are put in place in preparation for those events.  There is also great vigilance to be aware of changing conditions, and an unwillingness to take risks that could destroy the company.

Collins then explains two additional concepts:  SMaC and ROL.  First he states the importance of being SMaC (Specific, Methodical, and Consistent) in creating and adhering to a durable set of operating practices.  Next he explains a concept which he describes as “return on luck” (ROL), and says that the successful companies were not necessarily luckier than the comparable unsuccessful companies; rather, they were better prepared for bad luck and had a better return on good luck.  In his analysis, the three core behaviors – fanatic discipline, empirical creativity, and productive paranoia – are used to build an effective SMaC plan and to get the greatest ROL.  (Note: I will have an upcoming post on the place of luck in a Christian worldview.)

I found this book to be a practical benefit to my leadership, and have already used several concepts in my own planning, decisions, and communication. I resonated with the importance of consistency in behavior and actions, and especially found the idea of “firing bullets, then cannonballs” to make a lot of sense.  I would encourage this book as a valuable and practical resource.

Collins, J., & Hansen, M. T. (2011). Great by Choice:  Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All. New York, NY: Harper Collins Publishers.

 

 

Leadership That Makes Sense

The study of leadership can be quite complex, immense, and intimidating.  Many experts, authors, and teachers research and study leadership in an effort to describe or prescribe an effective model; but a “review of the scholarly studies on leadership shows that there is a wide variety of different theoretical approaches to explain the complexities of the leadership process.” (Northouse, 2013, p. 1)  Even more challenging, at times these various leadership theories seem to be in conflict with one another, and so, as Thomas Cronin says in Wren’s The Leader’s Companion, “virtually anything that can be said about leadership can be denied or disproven.” (1995, p. 30)  People then will often believe that leadership is relegated only to those who know everything about the subject or to those few people whom they feel have inherent “greatness.”

However, while good leadership does have good leadership theory as its basis, much of what makes a leader effective is in the practice of leadership, and much of what is effective in practice can be seen by doing things that make sense.  In fact, studies validate that leaders, organizations, and followers are more effective when they identify practical actions that make sense, and implement those actions.  That is why Jim Collins says, in Great by Choice, “Social psychology research indicates that . . .10Xers [leaders who built enterprises that beat industry averages by at least 10 times] do not look to conventional wisdom to set their course during times of uncertainty, nor do they primarily look to what other people do, or to what pundits and experts say they should do.  They look primarily to empirical evidence.” (Collins & Hansen, p. 25).  Edgar Schein adds, in Organizational Culture and Leadership, that this “is the basic reason why sociologists who study how work is actually done in organizations always find sufficient variations from the formally designated procedures to talk of the ‘informal organization’ and to point out that without such innovative behavior on the part of the employees, the organization might not be as effective.” (2010, p. 60)  In other words, people look around to see what makes sense and what actually works, and that is what they do.

When John Kotter, in Leading Change, talks about determining vision, he says that “all effective visions seem to be grounded in sensible values as well as analytically sound thinking, and the values have to be ones that resonate.” (2012, p. 84)  A good leader knows the culture in his organization and environment, and can identify the things that make sense, and that make sense in his specific culture.  Those things are the principles and practices that have reason behind them (leadership theory), but that resonate within the context of that culture and make practical sense (leadership practice).

So what does this mean for leaders?  It means that there is a good deal of common sense involved in effective leadership.  Don’t let the myriad of authors, experts, and theories confuse or discourage you.  Instead, remember that most often, decisions based upon empirical validation are the ones that work.  Look for what you can see works – what makes sense – and look for why it specifically works in your organizational culture, and you will be much closer to effective leadership than you realize.

 

Collins, J., & Hansen, M. T. (2011). Great by Choice:  Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All. New York, NY: Harper Collins Publishers.

Kotter, J. P. (2012). Leading change. Boston: Harvard Business School Press.

Northouse, P. G. (2013). Leadership: Theory and practice (6th ed.). Thousand Oaks, CA: SAGE Publications.

Schein, E. H. (2010). Organizational Culture and Leadership (4th Edition ed.). San Francisco, CA: Jossey-Bass.

Wren, J. T. (1995). The leader’s companion: insights on leadership through the ages. New York: Free Press.