This month, a client invited me to lead a discussion on one of my favorite books Great By Choice for their national agency meeting. As luck would have it, I wrote a review of the book for this newsletter over 10 years ago. I believe this book is as relevant, if not more relevant today than ever before.
Best-selling author Jim Collins is at it again. He has co-authored another great book for small business owners. You may remember his previous critically acclaimed books: Built to Last, Good to Great, and How the Mighty Fall. His recipe for writing success has remained the same with his new book as he and his team of researchers did nine years of massive research as a basis for the book.
Each of Collin’s books starts with a question. This time the question is, “Why do some companies thrive in uncertainty, even chaos, and others do not?” In answering this question, Collins and his team develop a formula for building a company that can be great in unpredictable, tumultuous, and fast-moving times. Sound familiar?
Collins and his co-author Morten Hansen examined companies that became great by beating their industry growth averages by a minimum of 10 times (10X) over 15 years in industries that faced tremendous uncertainty and massive change. Several of the 10X companies were Southwest Airlines, Microsoft, and Progressive Insurance.
The most interesting findings from the book include:
- The 10X company leaders were not more risk-taking, more visionary, or any more creative than their counterparts within the industry were. Instead, they were more disciplined, more empirical, and more paranoid.
- These great companies changed less in reaction to their fast-changing environments than comparison companies.
- Innovation was not a differentiator for these 10X companies.
- The 10X companies were not any luckier than other companies but enjoyed a much higher “return on luck” than others.
The most important takeaway for me from Great by Choice was the concept of having a “20 Mile March”. Essentially, a “20 Mile March” is a specific performance marker that a business commits to achieve over a long period of time. Examples in the book include:
- Southwest Airlines’s commitment to always be profitable each quarter
- Stryker committed to a minimum rate of earnings growth of 20%
- Progressive Insurance never allowed its combined ratio to fall above 100%.
I like to think of these concepts as a no matter what. It may or may not be a financial performance measurement. It forces companies to have discipline and self-control in their growth plans. What is your no matter what?
I loved this book. For a more extensive review, see the web link below for a recent article in Fortune magazine.