Jim Collins - Great By Choice (3) - Things to Learn

The Four Behaviours

As mentioned above, Collins identifies four features of how “great” organisations are led which enables them to thrive in times of great uncertainty. They are:

• fanatical discipline – “20 mile marching”.
• empirical creativity – “fire bullets then cannonballs”.
• productive paranoia - “leading above the death line”.
• SMaC recipes – a well-defined set of specific, measurable and consistent practices.

A little explanation of each will help.

Fanatical discipline is the idea that companies should aim to achieve the same level of progress regardless of the outside environment. That both prevents them from overstretching themselves when times are good and from giving up or cutting core services when times are bad. The classic example he cites is that of Intel, whose corporate strategy was focused on upholding Moore's Law – doubling the complexity of components per integrated circuit every 18-24 months. This meant that they continued to invest in R&D, even through recessions. Perhaps the best example of this, though is from the Scott & Amundsen example. Scott's team would push hard on a day with good weather, but stay in their tents on a day with bad weather. Amundsen aimed to do 15-20 miles per day, regardless of the weather, refusing to do more even when the South Pole was within reach. As a result, they did not tire as much in good weather and stayed more motivated in bad, as well as having a higher average overall speed.

Empirical creativity was an idea that surprised Collins and Hansen. They expected that in an uncertain environment, it would be the more innovative companies that thrived. But instead they found that there seemed to be a minimum threshold for innovation – if companies did not innovate a certain amount, they declined and died. But above that limit, it was not the companies who innovated most who prospered, but the ones who tested their innovations before rolling them out on a large scale or even who just saw what was working elsewhere, and followed that. Hence the idea of firing bullets then cannonballs – one fires a large number of “bullets” to find out what works, and then follows the ones that work well up with a “cannonball”, which costs more and involves a greater commitment.

Productive Paranoia was another surprising idea. They had been expecting to find a sense of confidence, and quick decision making among the leaders of these “great” companies. Instead, they found that the leaders kept far larger cash reserves than in the comparison companies – 3 to 10x as much – that they kept a close watch out for things that could damage their position, and worked hard at finding solutions. Surprisingly, they also found that they took fewer risks than their competitors, especially “death line” risks, which could destroy the company, and “asymmetric risks”, where the potential loss was much greater than the potential profit. They also managed “time based risks” well – when a decision was urgent, they took as much of the time they had available as they could before the risk increased to make the best decision they could.

SMaC Recipes are a set of corporate practices which are specific, measurable and consistent. The “great” companies examined made sure theirs worked and were clear, concrete and replicable, and then held to them rigidly, only changing them rarely and when conditions needed it and only in accordance with productive paranoia or empirical creativity. That enables dramatic change and strong consistency at the same time. One example is Intel's policy, which Collins & Hansen list as 10 points. In 1985, Intel decided to change the entire focus of their business from memory chips to microprocessors because of strong and cheap mass-produced competition. But in doing so they only changed one point in their “SMaC recipe”, and they already had a thriving microprocessor arm as a side business. That enabled them to in some ways reinvent themselves without changing their corporate culture. What especially distinguished the “great” companies from their competitors was that the “great” companies stuck to their policies with greater discipline, and changed them less. They even found one example of two companies with nearidentical recipes, which were similarly successful until one decided to try to change to copy a bigger rival and went into decline. One example of a SMaC principle was Southwest Airways' decision only to fly Boeing 737s, because that meant that any pilot could fly any plane, any engineer could fix any plane and logistics for spares was much easier.

Theological Evaluation of the Four Behaviours

These behaviours, taken as advice for how to cope with turbulent situations, do not seem to suffer from the same kind of problems that Collins' ideas of “greatness” and “choice” do. This is possibly because they are based on research rather than worldly assumptions or hubristic misuse of data.

Indeed, some limited theological parallels could be drawn. For example, the idea of 20 mile marching could be compared to the business environment of Old Testament Israel, where due to the prohibition on interest, it was much harder for individuals to overextend their businesses in good times. The notion of empiricism also stems from a Christian worldview, specifically the doctrine of original sin and the way it has corrupted our understanding so that we do not always make accurate decisions about the world without testing it.

Of course, that does not make them Christian. There is nothing there about the importance of trusting God and finding him to be your Rock. There is nothing there about the need to go deeper into God to find your roots more securely in the work of Jesus on the cross. There is nothing there about prayer or the guidance of the Holy Spirit. They are clearly not sufficient as advice for Christian leaders. But it is possible to take them as potentially wise advice for leading a church through turbulent times.

Jim Collins - Great by Choice (2) - Two Big Problems

“Greatness”

The first potentially problematic area of Jim Collins' work is the idea of “greatness”. It is his major focus across his whole canon of work – Built to Last was about the features of a company which lead to enduring greatness, Good to Great about how a company can change from being good to being great, How the Mighty Fall about how a company can cease to be great and Great by Choice about the role of luck in greatness, and how to lead well in turbulent times.

Collins' research methodology is generally to find sets of two comparison companies, one of which did better than the other from similar starting points, and to study what makes the “great” company different from the other one, then identifying common themes between all of his examples. In Great by Choice, Collins chooses “great” companies to study based on the following criteria:

• They need to have out-performed their industry average on the stock market by a factor of 10x over a period of 15+ years.
• They achieved those results in a particularly turbulent environment, with lots of potential for disaster.
• They began their rise to greatness from a position of vulnerability, being young or small at the start of the study.

Probably the most famous corporate example he takes is Microsoft v Apple prior to 2000, and then examining Apple's resurgence under Steve Jobs. He also uses the recurring example of Scott v Amundsen in the race for the South Pole, observing that most of the same principles apply there as well.

This rather raises the question “Should we as Christian leaders seek greatness as understood by Collins for our churches?” In Good to Great and the Social Sectors, Collins discusses what greatness means for a non-profit organisation.

A great organisation is one that delivers superior performance and makes a distinctive impact over a long period of time. For a business, financial returns are a perfectly legitimate measure of performance. For a social sector organisation, however, performance must be assessed relative to mission, not financial returns. In the social sectors, the critical question is not “How much money do we make per dollar of invested capital?” but “How effectively do we deliver on our mission and make a distinctive impact, relative to our resources?”

He goes on to break down his definition into three factors – superior performance, distinctive impact, lasting endurance, and then to show that many of the principles he advocated in Good to Great still apply, albeit with slight modifications.

I think it is important to draw a distinction here between the calling of God's Church, the calling of the congregations we serve, and our calling as individuals. We are called neither to greatness nor to seek greatness – we are called to seek God and serve faithfully. The congregations we are called to serve may be called to greatness, but they may not. It is far too easy as pastors for our egos to become entangled with the health of the congregations we serve. But superior performance, distinctive impact and lasting endurance are most certainly features of the Kingdom of God, far beyond what any company or organisation could achieve. And that is because it is led by the perfect leader – Jesus Christ. True greatness is to be found in following him, and his kingdom is truly great, whether by Jim Collins' definition or any other.

“Great by Choice”

An even more troubling theme of Collins' work is the idea of choice. Collins' basic thesis in the book is that there is a set of 4 behaviours which, taken together, ensure that one thrives in difficult and unpredictable situations. He examines the role of luck, and finds that the successful companies did not have better luck than their unsuccessful counterparts, but their behaviour during the period ensured that they made the most of their good luck and did not suffer as much from the effects of bad luck – these behaviours ensure a better “return on luck”.

There are several major problems with this from a Christian (and a logical) point of view.

• Firstly, just because those behaviours might lead to a better “return on luck” does not mean that they can be chosen. We are not always free to act in the way that we might want to. Indeed, in Good to Great, he speculates as to how level 5 leaders come about and isn't sure beyond pointing to possible causative factors such as near-death experiences or conversion to Christianity.
• Secondly, he largely ignores the role of catastrophically bad, unavoidable events – events which would ensure that the company closes down no matter how they had behaved beforehand, or which could not have been forseen. He might respond to this by pointing out that such events are by definition unavoidable and hence do not change the fact that one set of behaviours has a better return on luck. However, that misses the point that such events show that it is not merely a “choice” to become great - there are still plenty of factors beyond our control.
• Third, luck does not really exist – it is a matter of the providence of God - The lot is cast into the lap, but its every decision is from the LORD. (Proverbs 16:33, NIV)
• Finally, as a result of these, Collins' suggestion that one could become “Great by Choice” is hubristic. It doesn't allow for the fact that it is God who gives the ability to become great. It doesn't allow for the fact that God could easily stop them from becoming great via either changing their character or bringing along an unavoidable catastrophic event, in the way that he did in Daniel 4.

By saying that greatness is a result of choice, Collins commits a logical fallacy. Many companies may have chosen the same course as the “great” companies, but failed. All winners of the men's Olympic 100m final for the past 20 years have been Afro-Caribbean, but that does not mean that ++Sentamu is a good sprinter.

He also undermines some of his own past work by creating the danger of letting the “will” aspect of the level 5 leader undermine the “humility” aspect. He notes that level 5 leaders tend to credit others for their success – how then would they respond to reading his work and learning that becoming great was their choice? How would someone who knew that they had chosen to become great attain the level of humility required for level 5 leadership? The counterpart of being able to choose greatness is that if an organisation lacks greatness, it is the fault of their leader for not choosing it. In some cases, doubtless, that is true. But in others it isn't. Was Jeremiah less than great? Situations and providence play a far greater role than Collins allows them.

Having criticised both the notion of greatness and the idea of choice, it might seem that there is little hope for Great by Choice. However, that isn't necessarily true. What Collins has done is present four behaviours which help people and organisations to thrive in uncertain conditions, even if he has framed it in ways which we might not find helpful. We can still potentially learn from treating those behaviours as examples of research-based wisdom...

Jim Collins - Great by Choice (1)

Who is Jim Collins?

In my experience, Jim Collins is the secular leadership thinker who is most often cited by Christians. Ideas such as the level 5 leader (from Good to Great) and the BHAG (from Built to Last) are common currency in open and charismatic evangelical leadership. He used to be a lecturer at Stanford Graduate School of Business, but is now an independent management consultant who runs his own “management laboratory” and spends most of his time speaking and doing research. He has spoken at the GLS four times, more than anyone else except Hybels.

In 2005, he professed to be surprised by how popular Good to Great had been among nonprofit organisations - between a third and a half of all readers32, and therefore decided to write a supplement to the book which discussed some of the differences between business and non-business and applied his work more broadly.

One of the most striking features of Collins' work, and one which explains why it is so popular amongst Christians, is the idea of the Level 5 Leader, introduced in Good to Great and recurring in all his subsequent books. He found that companies that become great and stay great have a particular type of leader to start with. In Collins' own words: Level 5 leaders embody a paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company, not themselves.

Level 5 leaders, notes Collins, are so important because they enable others to become great too. As Lawrence and others have pointed out, this ties in strongly with the Bible's picture of leadership because it reflects the character of Christ who surely is the perfect embodiment of the combination of humility and will. It is also encouraging for Christians when we find ourselves under pressure not to be humble. Can we then learn more about what the combination of humility and will looks like from the examples Collins cites?

As part of my curacy, I wrote an essay evaluating the whole trend of secular leadership thinking in the church, with particular reference to Jim Collins' book Great by Choice.

Books I've Read Recently 3 - Now, Discover Your Strengths

As far as I know, this isn't a Christian book. It's a book by two people who have done a lot of research (with Gallup) into people's working patterns. But we can learn from them, and it's always nice to see secular researchers getting back to where the Bible said they should be, which they kind-of do...

The basic thesis of the book is that we work best by focusing on our strengths rather than our weaknesses. I think that's a good point, and they justify it well.

The book is based around the question "At work, do you have the opportunity to do what you do best very day?" They asked that to a lot of employees, managers, and so on, and found that the people who said "yes" were more productive, enjoyed work more, were healthier and happier, and so on. They found that companies that enabled employees to do that worked better as a whole.

The authors then go on to identify 34 different "strengths", which is enough for there to be 34C5 = 278,256 different combinations of top 5 strengths, even if you ignore the order. Including ordering too, that's over 33 million permutations. And they offer an online test to determine what your top 5 are. There are then a good number of suggestions of how to use your strengths to deal with weaknesses, how to encourage others to use their strengths and so on. A lot of it is common sense, but common sense isn't always very common, as evidenced by some in the Church of England who think that all clergy should be able to do any clergy job.

Weaknesses in the book - they don't explain exactly where the 34 strengths come from. I very much doubt that they are all independent. For example, I would expect people who score highly on "intellection" also to score highly on "deliberative". Nor do they explain why 5 is the magic number - I would expect that some people are more focused than others - one person might have 80% of their abilities on one skill, another might have 20% distributed across each of 5 skills. And some people might just have more innate ability than others anyway. Some of their suggestions are just plain silly too - replacing interviews with just competency measures, for example - often basic conversational skills and personality are important, and you miss that through just doing tests.

There are some good insights as well - for example the way that performance reviews often don't measure performance in the ways that matter. All in all, I found it a thought-provoking read. I don't agree with everything in it, and some bits were overly long and tedious, and the good research doesn't justify all the conclusions they hang on it in terms of the 34 types. But in terms of thinking about what it means for us to be given different gifts, and for us to be different parts of the body, and to be supporting one another as different parts of the body, it was well worth a read.

The Apprentice

I've got to admit, I do quite enjoy watching The Apprentice. It's amusing in particular how no-one ever suggests that each team should work as a team, and put their success as a team ahead of their individual success. It's a much better strategy than the one most of them adopt. But then I suspect there's more than a grain of truth in Mitchell & Webb's assessment...

Happy New Year!

Happy New Year!

New Year is traditionally a time for making resolutions. Having absorbed just enough church management-speak to realise that it's a mixture of common sense and gobbledegook, I'm aiming to make my resolutions this year SMART - Specific, Measurable, Attainable, Realistic and Time-bound.

The problem with SMART objectives is that they don't have to be particularly ambitious. I know that some people use the A for Ambitious or the R for Rewarding rather than having both the A and R mean much the same thing, but that's not how I've come across it.

For example, this year I resolve to kick fewer than two dogs into the path of oncoming traffic. That's a SMART resolution, but it's not especially a useful one. And that's part of the problem with management culture in public service organisations. Anyway, I digress.

I have decided to make it my practice every year to read through Psalm 90 slowly on New Years' Day. This year it's especially poignant, as the minister who kept emphasising to me the importance of "numbering my days aright" is dying.

Lord, you have been our dwelling place
throughout all generations.
Before the mountains were born
or you brought forth the whole world,
from everlasting to everlasting you are God.

You turn people back to dust,
saying, "Return to dust, you mortals."
A thousand years in your sight
are like a day that has just gone by,
or like a watch in the night.
Yet you sweep people away in the sleep of death—
they are like the new grass of the morning:
In the morning it springs up new,
but by evening it is dry and withered.

We are consumed by your anger
and terrified by your indignation.
You have set our iniquities before you,
our secret sins in the light of your presence.
All our days pass away under your wrath;
we finish our years with a moan.

Our days may come to seventy years,
or eighty, if our strength endures;
yet the best of them are but trouble and sorrow,
for they quickly pass, and we fly away.
If only we knew the power of your anger!
Your wrath is as great as the fear that is your due.

Teach us to number our days,
that we may gain a heart of wisdom.

Relent, LORD! How long will it be?
Have compassion on your servants.
Satisfy us in the morning with your unfailing love,
that we may sing for joy and be glad all our days.
Make us glad for as many days as you have afflicted us,
for as many years as we have seen trouble.

May your deeds be shown to your servants,
your splendor to their children.
May the favour of the Lord our God rest on us;
establish the work of our hands for us—
yes, establish the work of our hands.

Psalm 90, TNIV