Great By Choice: Uncertainty, Chaos And Luck—Why Some Thrive Despite Them All by Jim Collins and Morten Hansen (HarperBusiness) is the latest of best-sellers on the topic of organizational excellence. Other books by Collins include Good to Great: Why Some Companies Make the Leap…and Others Don’t; Built to Last: Successful Habits of Visionary Companies; and How the Mighty Fall—And Why Some Companies Never Give In. These well researched and written books contain valuable contributions for CEOs and other executives on how leaders can manage effectively in good and difficult times.
“Collins on Chaos: It’s one thing to rise to greatness. It’s another to do so in a time of upheaval, disruption, and economic turmoil (hello, 2011)” was Fortune Magazine’s cover story on October 17, 2011, a great introduction to the choices that leaders have made for success and that led them to failures.
The bottom line is that no matter the temptation, you can choose to be great and not let events you can’t control impact your pace and your plans. As companies choose to get the right people on the bus, executives can choose habits that will help their companies be built to last.
The authors of “Great by Choice” identified “The Steady Seven,” top companies that survived successfully in a depressed economy. “Different companies exposed to the same set of circumstances achieve vastly different results,” Collins writes. Why? “Part of the answer lies in the distinctive behavior of their leaders.”
The seven companies that “outperformed their industries by a wide margin” were:
Amgen: a combination of creativity and discipline
Biomet: dedication to new iterations of its products
Intel: moving forward ignoring economic climate
Microsoft: updating relentlessly and not overextending financially
Progressive Insurance: not sacrificing underwriting profit for growth
Southwest Airlines: discipline to hold back in good times
Stryker: demanding 20% annual net income growth
Twenty-Mile March is the term Collins uses to define the concept for companies to keep a steady pace no matter the environmental factors. The analogy Collins used was about the results of two teams led by Roald Amundsen and Robert Falcon Scott in 1911 who wanted to be the first ones in modern history to reach the South Pole. Amundsen and his team survived while Scott and his did not.
Collins writes that, “The 20-Mile March is more than a philosophy. It’s about having concrete, clear, intelligent and rigorously pursued performance mechanisms that you keep on track.” Both teams were led by men of around the same ages and same expertise, the teams were similarly outfitted, and they started their hopeful roundtrips of 1,400 miles almost at the same time in the same weather as each other. It was the behaviors of the leaders that made the difference. Amundsen made the roundtrip home with his crew; Scott and his crew lay frozen near but not at the South Pole.
What was the difference? “Amundsen adhered to a regimen of consistent progress, never going too far in good weather, careful to stay far away from the red line of exhaustion that could leave his team exposed, yet pressing ahead in nasty weather to stay on pace.” The pace he followed was between 15 and 20 miles a day. Amundsen arrived at the South Pole after keeping up a regimented daily pace in good and bad weather that averaged 15½ per day.
Scott, on the other hand, “would sometimes drive his team to exhaustion on good days and then sit in his tent and complain about the weather on bad days.” He was erratic about keeping any sort of regimen, responding instead to the climate and energy. Scott’s behavior led to him and his team not making the trip home.
Five Business Lessons I Learned
1. Set a pace for your company. How much can you achieve in a quarter? a year? How will you meet the goals you set? Stryker CEO John Brown set a 20% net income growth and while he was in charge met that goal more than 90% of the time.
2. Don’t compete as much as attract. Many companies want to be number one in an industry. Attract customers by being the best in what your company is capable of doing, like Southwest Airlines.
3. Keep growth in the picture. If consumers aren’t buying your product at the rate you expect, ask yourself, “What area of growth can be developed to offset that income reduction?” Biogen created new iterations of their products.
4. Be a leader who is authentic and open to growth. Was Scott comfortable with marching in spurts and not a consistent pace? Did anyone on his team lead up and suggest to Scott that there was a better way to make the march to the South Pole? Did he listen to or ignore any suggestions?
5. Assess current offerings to see if time to update while not overspending the way Microsoft did.
What are your lessons on the 20-Mile March?