Jim Collins and Morten T. Hansen
Great by Choice
ISBN: 978-0-06-212099-1
In his first three books, Jim Collins has discussed companies that are built to last forever, companies that are great rather than just good, and has discussed why once mighty companies fell into irrelevancy or shut down completely. In his final book of the series, Great by Choice, Collins and his colleague Morten T. Hansen outlined the qualities that separate the greatest companies from the rest, building beyond the characteristics that take a company to the level of being “great.”
The characteristics that describe the companies that are great by choice can fit into two categories: hypervigilance and innovation. These companies never take their eyes off of their goals and are paranoid about missing those goals. Also, these great companies utilize innovation to make their companies better, rather than just innovating for innovation’s sake. They understand how to use data to their advantage and are willing to course correct when necessary. The same quantity of progress a day is the benchmark for these companies, knowing that employees will tire out faster and lose focus if great leaps forward are demanded rather than a steady march forward.
Collins and Hansen discussed the “death line” – the minimum amount of growth necessary to keep the company alive. Once a company falls below the death line, they run the risk of failing and having to disband. In order to stay above that line, companies usually benefit from more conservative leadership techniques – having and utilizing cash reserves and buffers, taking risks within certain constraints, and staying hypervigilant not only about the key performance indicators of their own company but of their competitors as well. This is all part of the concept of the “20 mile march,” where steady forward progress is made regardless of external factors. Pausing forward momentum can be a death sentence for the company.
Specific, methodical, and consistent goals – a company’s SMaC – is the recipe for success. Being able to state your company’s purpose and goals in 10-12 sentences will make it easy for everyone involved to know which direction things are going, which cuts down on confusion and energy wasted. When startups first begin, they need to determine what the Value Proposition is for the company. As a company matures, sometimes founders and company leaders can lose focus as new market opportunities open. The SMaC is a great way to get back to a simplified statement or set of statements that easily convey the purpose of the organization both to insiders and those outside the organization. If your company does not have 10-12 goals, now is the best time to sit down and create that list.
Much like the other books in Collins’ series, this was full of great information with an amazing number of sources for further reading. It bridged the gap between the academic aspects of the study and consolidated information for busy entrepreneurs and business owners. I thought that Great by Choice was actually the quickest read of the series – maybe I got used to Collins’ writing style by the time I started reading this book. I do recommend that you read the series in the order in which the books are reviewed in this blog. However, if you swap the order of the first two books (as Collins suggests in the forward of Good to Great), you will be fine.
Overall, 9/10, would highly recommend for people who want to take their businesses to the next level. You might be on the road to creating a great business, but there are steps you can take beyond moving your business from the “good” category to the “great” category. If you manage to make the leap, you’ll join an elite group of businesses across the world that have created some of the greatest institutions in history. Remember that this is a never-ending process, and businesses that lose sight of their goals can easily revert back into insignificance.