Book Summary: Great by Choice - Uncertainty, Chaos, and Luck by Jim Collins and Morten Hansen

Great by Choice is an excellent book that dives into how businesses become great. As a small business owner, I am always interested in how companies do this. One thing that sets Jim Collins apart from all the other consulting groups out there is his sheer volume of data analyzed.There are too many consulting groups that will pole 100-300 people and draw conclusions based on that. This does not work for business people that want to really grow their businesses. Great by Choice defines in great detail their study set which is exhaustive.Why is this important to me?I always want to ask this question as if I am sitting in your shoes. I don't want to waste your time. Great by Choice profiles companies in a matched pair scenario. This is really excellent and is similar to the Super Bowl. You have two teams, a scoreboard and performance trends. The Match Pair concept is a 15 year scorecard between companies. This methodology shows the real results and can be used in several scenario
s.As a business owner, it is easy to assume that the company is doing well. I would love the opportunity to do a match pair scenario with our competitors to see what is really going on. This would show me the truth and probably drive me to work another 100 hours per week.Both sides count - One of the best books I have ever read was Billion Dollar Lessons. This book studied the disastrous moves made by organizations. Understand both the successes and failures create a road map to success.Great by Choice is packed with relevant information. There are several core components and I will profile 5 of them in this summary.The study set includes 10xers. If you invested $10,000 in each of these companies and held it for 30 years then the worse of the 10xers would have returned $2.7 million (Progressive Insurance) and the best would have returned $12 million (Southwest Airlines). Southwest Airlines returned more than Microsoft and Intel. I am sure Warren Buffett wished he invested in
Southwest. He loves airlines but lost in every one of them. 10Xer leadership is based on three principles Fanatic Discipline, Productive Paranoia and Empirical Creativity. These three topics alone justify another book.20 Mile March - This is an excellent concept and proves the power of slight edge behavior. Consistency in daily activity is critical for long term success. This is seen in the sales profession. Sales people that jump from job to job lose all their momentum and money making ability. Business is a marathon and not a sprint. Great by Choice parallels the difference and this is magnified by Gordon Moore's law that states - processing power will double every 18 months with the price moving down. There were times in Intel's history where they could surpass this but did not. They controlled the growth to make sure they could manage it accordingly. AMD the matched pair did not do this and they are insignificant today.Fire Bullets then Cannonballs - Have you ever playe
d Texas Holdem poker? If so then this strategy is the difference between limping in to test the waters and going all in with ALL YOUR MONEY. The analogy allows companies to test new strategies and markets by not investing more than 5% of their money. If the investment works and returns good results then they will pour their money into the strategy hence fire bullets then cannonballs.SMaC stands for Specific, Methodical and Consistent and is a set of practices that are followed. SMaC is not the company core values or a to-do list. Here are some examples of Southwest Airlines SMaC practices. Fly only 737's and no other planes10 Minute Gate TurnsStay out of the Food businessAs you can see, this is the organizations secret sauce that they follow and adhere too. The 10xers did not change their SMaC practices very often. The matched pairs changed them often and floundered for it.Return on Luck - This part of the book was very surprising. Jim and Morten define a good luck event and
a bad luck event and studied both the 10xers and the matched pair companies. Conventional wisdom says that the 10Xers would have more good luck and less bad luck. The numbers show just the opposite. This shows that 10X leadership is the difference along with adherence to the SMaC receipt.Great by Choice is a must read for anybody that is serious about growing their business. The study set is exhaustive which shows that the conclusions are based on sound data. The match pair concept is the best way to study true greatness. At the end of any sporting event, there is a winner and loser. Businesses need to be measured the same way.I hope you have found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days. One thing you can take away from this book is discipline. Fanatic discipline really is the difference between the 10Xers and the matched pairs. It is very difficult to be discipline
d in something you hate doing. It is important to understand this because discipline becomes easy when you are doing something you love.

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