Top positive review
8/10: Valuable extension of the concepts presented in Good to Great
on 21 January 2018
This book investigates why some companies perform so well in today’s increasingly volatile and uncertain economic environment while their peers often fall by the wayside.
Backed up by rigorous analysis the book identifies a handful of successful companies and then sets out to explain, with empirical evidence, why these companies performed so well in these uncertain times.
The book is structured around 6 main concepts (see below)
I find the writing of Jim Collins very succinct with a perfect blend of anecdote, theory and empirical evidence to make his points.
Please see below for the points I took away from this book:
• Great companies (10xers) accept uncertainty but refuse to accept that forces beyond their control will determine their destiny. Instead they work very hard at a clearly defined goal to build up a reservoir of strength (e.g. through cash on balance sheet or reputation in the market)
• 10xers consistently exhibit three core behaviours to build a reservoir of strength:
1. Fanatic discipline: Consistency of action around clearly defined strategy
2. Empirical creativity: decisions are made from a sound empirical base
3. Productive paranoia: constantly operating with a heightened state of awareness against potential threats
20 Mile March
• 10xers' growth trajectories often exhibit a steady trajectory much like the arctic explorer Anderson’s concept of marching 20 miles every day to the South Pole to be Cpt Scott , regardless of whether the weather was good or bad
• Adopting such a ‘20 Mile March’ will require pushing hard in adversity and reign it in during good times
• Such a philosophy will increase confidence because the organisation will be able to achieve results regardless of conditions
• Conversely, it is not about growing as quickly as possible all the time. Indeed, the study found that there is an inverse relationship between pursuit of maximum growth and 10x success. Growing too quickly can often lead to companies over extending themselves.
Fire Bullets, Then Cannonballs
• 10xers use low-risk empirical tests (‘firing bullets’) to validate what ideas work.
• Only once a company has successfully tested an idea with bullets should they fire the ‘cannonball’
• 10xers are therefore not visionary geniuses but empiricists.
• Acquisitions can qualify as bullets if they’re low-cost, low-risk and low-distraction
Leading above the Death Line
• 10xers effectively identify and manage risk
• When risks are identified these companies spend significant time and energy on understanding the likely impact through empirical analysis and then working very hard to execute their risk mitigation plan
• 10xers have a Specific, Methodical and Consistent (“SMaC”) recipe that they adhered to
• SmaC recipes endured for the long term and were changed by an average of 15% over the era of analysis
• See South Western airline’s SMaC in the book as a good example
Return on Luck
• All companies have good and bad luck. 10xers had their fair share of both
• The rest of the concepts above must be enthusiastically executed well to get a good return on luck