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'Great by Choice' praises corporate evolution

Jim Collins and Morten Hansen's 'Great by Choice' delivers a timely management message, along with some quirky, memorable catchphrases.

November 06, 2011|By Andrew Hill

I sometimes wish Capt. Robert Falcon Scott had made it to the South Pole first. It would have spawned an interesting strain of management literature about the virtues of amateurism and make-do-and-mend improvisation.

Instead, Britons are condemned to suffer the comparison between Scott's failed expedition and that of the efficient, well-prepared and Antarctic-ice-cool Norwegian Roald Amundsen, replayed again and again as a lesson to business leaders.

Jim Collins, one of the most successful management writers of the last two decades, and Morten Hansen, a Norwegian-born professor at UC Berkeley, start with the familiar tale in their new book. Titled "Great by Choice: Uncertainty, Chaos and Luck — Why Some Thrive Despite Them All," it was published by Harper Business.

Amundsen, they write, displayed all the attributes of companies that thrive in chaos: "fanatic discipline," "empirical creativity" and "productive paranoia." Scott, on the other hand, "left himself unprepared and complained in his journal about his bad luck."

Hansen was part of the research team on previous Collins books "Built to Last" (written with Jerry Porras) and "Good to Great." He gets equal billing for this one, but — Norwegian flag-waving aside — it still looks like a Collins production.

Methodical research (into "6,000 years of combined corporate history") provides a clutch of paired companies: in this case, seven that beat their industry index by at least 10 times over a period of at least 15 years (the 10 Timesers), and seven that did not.

These examples yield five or six key lessons, rendered memorable by quirky catchphrases. "Built to Last" introduced readers to Big Hairy Audacious Goals and "Great to Good" offered us the Hedgehog Concept and the Doom Loop; brace yourself to learn here about more.

These are the irritating tunes you'll be unable to get out of your head after the show, but they accompany a credible plot. Leaders succeed in a turbulent world not by taking bolder risks, promoting more innovation, acting faster, changing their companies more radically or having more luck than their competitors, the authors claim.

Instead, they pace themselves by making regular advances: They don't overreach when the going is fair. They don't slack off when the going is tough (the 20 Mile March). They stay specific, methodical and consistent (the SMaC Recipe), basing their strategy on proven elements.

As the authors write in the epilogue: "We sense a dangerous disease infecting our modern culture and eroding hope: an increasingly prevalent view that greatness owes more to circumstance, even luck, than to action and discipline — that what happens to us matters more than what we do."

In the most interesting chapter, Collins and Hansen try to quantify and analyze the role of luck. The paired companies experienced similar doses of good and bad fortune, they find, but the 10 Timesers made more of the ups and (because they rebounded more strongly) the downs. They worked harder and generated a higher "return on luck."

AMD Inc., compared here with Intel Corp., squandered its good luck in the mid-1990s by failing to bring to market a new generation of microprocessors quickly enough. Microsoft Corp.'s Bill Gates, meanwhile, "didn't just get a lucky break and cash in his chips," but "kept pushing, driving, working" toward his goals.

Collins has learned from his own experience. In the 10 years since "Good to Great" was published, the 11 case studies have not all held up well. But "Great by Choice" insulates its chosen companies from retrospective criticism.

By using the period 1975 to 2002, for instance, the authors can focus on Microsoft's success against a floundering Apple, despite the pair's more recent reversal of fortune.

"Great by Choice's" praise for corporate evolution over revolution is not as groundbreaking as its authors suggest. But it is a sensible, well-timed and precisely targeted message for companies shaken by macroeconomic crises.

Andrew Hill is an editor at the Financial Times of London, in which this review first appeared.

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