Posts Tagged ‘Great By Choice’

In 100 Words: Return on Luck

Friday, June 15th, 2012 by Troy Schrock

Success comes from a combination of shrewd judgment (strategy), hard work (execution), and good fortune – the last of which often plays a larger role than we would like to admit.

Every company, no matter how disciplined, is susceptible to seemingly coincidental events outside of its control.  We call it luck.  Sometimes it’s good.  Sometimes it’s bad.  It can never be predicted, and it is not obligated to “play fair.”

The critical question is (as Jim Collins writes in Great By Choice): do you get a high return on luck (both good and bad)?  Add that to your list of metrics!

“Luck is not a strategy, but getting a positive return on luck is.”  (Jim Collins)

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Great By Choice and Strategy Execution

Thursday, December 8th, 2011 by Troy Schrock

I recently read Great By Choice, the latest book by Jim Collins.  I have enjoyed all of Collins’s previous work, and this one did not disappoint.  As usual, Collins began with a question: “Why do some companies thrive in uncertainty, even chaos, and others do not?”  His thorough research uncovered a short list of simple, but powerful principles that are easy to remember thanks to Collins’s typically vivid labels.  A few examples:

  • 10Xer: an enterprise that, despite particularly turbulent conditions, sustains truly spectacular results relative to the general stock market and its industry (beats them by at least 10 times).
  • 20 Mile March: a clearly-defined performance standard that includes a lower bound (the ambition to achieve) and an upper bound (the self-control to hold back even when it seems easy to exceed the goal).  Conventional wisdom says to accomplish as much as possible when the going is easy, but Collins shares convincing evidence that doing so expends resources that will be sorely needed when the going gets rough.
  • Fire Bullets, Then Cannonballs: Favoring empiricism as the foundation for decisive action, 10Xers first fire bullets (low cost, low risk, low distraction) to figure out what will work.  Once the bullets consistently find the target, they fire a cannonball (the full resources of the organization).
  • Return on Luck: the measure of an organization’s ability to glean value from any circumstance.  Do you measure Return on Luck? 

Collins’s research also busts a few commonly-held myths about what makes a great company: Boldness, risk taking, and ability to predict the future are not distinguishing factors of the greatest companies.

  • 10X companies are not more innovative than their counterparts.  (Sometimes, they are less innovative.)
  • Speed is not the key to navigating threats.
  • Change is not always good (in fact, it should be rare).
  • Good luck does not explain 10X success.

Overall, what struck me most in Great By Choice was the relentless focus on strategic process and execution.  The 10Xers didn’t know what was coming, but regardless, they took full responsibility for their own fate.  (They “reject the idea that forces outside their control will determine their results,” Collins writes.)  So what did they do?  They started with values, purpose, long-term goals, and high performance standards, then applied a “fanatic discipline” to adhere to them.  It was their effective action (i.e., strategy execution) that separated them from the pack.

As we enter a new year, you and your organization have an opportunity to choose to be great.  Do you have a disciplined strategy execution process in place to help you get there?