1. “Great By Choice”
Jim Collins and Morten T. Hansen
Book review by:
Mark Angelucci, CPCU, ARM
October, 2012

2. This seventh book by Collins follows a familiar approach. Do
detailed research on companies that outperform their peers (in
the case delivering performance that beats industry indexes by
ten times) over a sustained period of time (in this case 15
years). They dig deeply into those companies to understand
what practices they executed to perform so well.
While the approach is familiar the insights it provides are fresh
and thought provoking. To me, the best thing about the
concepts are that they are so practical you can apply them to
your business.

3. The insights from these high performing companies (Amgen, Biomet, Intel,
Microsoft, Progressive Insurance, Southwest Airlines, Stryker) are:
● 10Xers: The name given to the companies that beat their industry’s
indexes by 10 times. Their hallmark behaviors are fanatic discipline,
empirical creativity and productive paranoia.
● 20 Mile March: The idea is that companies hit specific performance
measures consistently over many years. To do this requires strong efforts
in tough times and having the discipline to hold back in good times.
● Fire Bullets, Then Cannonballs: This is how the 10Xer companies
deploy innovation. They try carefully calibrated ideas (a bullet). If it shows
good results they then launch a bigger campaign into the market (a
cannonball). Conversely, if the bullet doesn't make an impact, they learn
what they can – with limited resources invested and move on.

4. ● Leading Above the Death Line: This idea describes how these leading
companies deal with unpredictable markets and risks. They do this by
worrying about issues ahead of time, carrying reserves (cash) to buffer
against downside risks. When something unexpected occurs they quickly
focus on assessing the impacts and options; then move decisively to
execution against the revised plans and objectives.
● SMaC: This stands for a Specific Methodical and Consistent. It is a
declaration of operating principles for your organization. They should be
high level enough to not need to be changed regularly but specific enough
that the items can be operationalized and used to guide tactical decisions.
The leading companies were very disciplined in following their SMaC and it
contributed to their ability to withstand the turbulence of economic, societal
and competitive changes.

5. ● Return on Luck: Luck happens, both good luck and bad luck. The issue
isn’t whether you have good or bad luck but when it strikes are you
prepared to minimize the downside of bad luck (leading Above the Death
Line, Fire Bullets then Cannonballs, 20 Mile March) and to maximize the
effect of good luck (SMaC; 20 Mile March).
To a large degree these insights work together to describe what made
these high performing companies different from their peers. The common
thread to me is that these companies (and the insights) are informed from
changes in the world around them, but they thoughtfully react to those
changes, rather than reflexively reacting to them. They accomplish this by
thinking ahead (Fire Bullets, then Cannonballs; leading Above the Death
Line; SMaC) and discipline (20 Mile March; following their SMaC’s; return
on Luck).
Think ahead and be disciplined; react to change thoughtfully – not
reflexively, that sounds like a success recipe for all of us.