Recommended Resource – Great by Choice

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

About the Reference

Great by Choice by Jim Collins and Morten Hansen represents a detailed assessment of companies thriving in times of uncertainty compared with similar organizations not performing so well. In the analytical tradition of Built to Last, Good to Great, and How the Mighty Fall, Collins and Hansen imperially demonstrate that organizations performing well in tumultuous times:

  • Have leaders who were more disciplined, more empirical, and more paranoid
  • Believed that a ‘fast world’ necessitated ‘fast decisions’ and ‘fast actions’ was a good way to fail
  • Changed less in reaction to the radically evolving world than their poorer performing comparison companies

Benefits of Using this Reference

StrategyDriven Contributors like Great by Choice for its data-driven analysis of organizational performance in turbulent times. We believe this assessment and its findings are particularly relevant given today’s highly uncertain marketplace.

However, StrategyDriven Contributors believe there are some flaws in Collins and Hansen’s analysis. First, it appears that a majority of the 10x companies were small, fragile, and subsequently more nimble than their comparisons during the early portion of the comparison period. We feel this difference in organizational structure materially influenced the results each company was able to achieve; the 10x companies having ‘less to lose’ were better positioned to take the actions necessary for a higher long-term payoff whereas their peers were laden with ‘historical scaring’ – legacy contracts and obligations, well established shareholder expectations, etcetera – and were subsequently more confined in what they are able to do and so were less likely to be able to take the action needed to achieve 10x gains.

Another flaw was the comparison of Microsoft to Apple. While both were high tech companies during the assessment period, Microsoft was a software company whereas Apple was an integrated software and hardware company; placing it in a very different business. We disagree that these companies were comparative.

Finally, Collins and Hansen do not broaden their analysis to include companies such as Microsoft and Apple that change performance positions over time. Subjectively, if a company can be great by choice, then turnarounds such as that which Apple orchestrated in the 2000s should not only be possible but, given the vast number of businesses in the marketplace over the past 100+ years and the several periods of market turbulence, should have occurred in other instances. Validating the Great by Choice principles against several turnaround examples would help strengthen their assertions – assuming they are true.

In spite of our analytical reservations, StrategyDriven Contributors like Great by Choice and believe it offers significant, if not groundbreaking, insight to the principles for building a successful organization regardless of the marketplace environment. For its data-driven insights of how to succeed during uncertain times, Great by Choice is a StrategyDriven recommended read.

Leadership Inspirations – The Enemy of Greatness

“Good is the enemy of great.”

Jim Collins
American business consultant, author, and lecturer on the subject of company sustainability and growth

Recommended Resource – How the Mighty Fall

How The Mighty Fall: And Why Some Companies Never Give In
by Jim Collins

About the Reference

How The Mighty Fall: And Why Some Companies Never Give In by Jim Collins examines the reasons great and good companies slip into decline, the five phases of decline, and the questions company leaders can ask to identify if their organization is declining or at risk of doing so. Consistent with his past work, Jim Collins’s conclusions of why organizations fall into decline is founded on rigorous examination of imperial evidence and the book filled with highly illustrative examples.

Benefits of Using this Reference

StrategyDriven Contributors like How The Mighty Fall because of the unique perspective Jim Collins provides on organizational decline founded on imperial research. We believe it is important for business leaders to remain ever watchful for indicators of declining performance and to this end, Jim Collins provides an insightful list of decline indicating markers. If we had one criticism of How The Mighty Fall it would be that Collins omits any thoughts as to how and with what periodicity a leader or an organization might systematically examine itself for the existence of one or more markers of decline.

How The Mighty Fall keeps with the StrategyDriven philosophy of self evaluation; giving readers insight to the warning flags of organizational decline and demise and making How The Mighty Fall a StrategyDriven recommended read.