How to navigate the current economy — and the turbulent times ahead
by Kate Pavao, December 2011
Today’s business environment is full of chaos and disruption. And that, according to best-selling business book author Jim Collins, is something executives should get used to. “What we’re doing is returning to what’s historically normal,” he tells Profit.
Right now, Collins says business leaders — and everyone else, really — are wrestling with a big question: How do you respond to this instability and uncertainty — and still accomplish great things? He says, “I don’t think that question is going to go away. I think that question may well mark the rest of our lives.”
Great By Choice, his latest book, co-authored with management professor Morten T. Hansen, examines successful companies in order to answer this big question. Here, Collins talks to Profit about the unexpected insights he found along the way, why he’s feeling hopeful — and a ritual he performs when he needs time to think.
Profit: What surprised you most in your research?
Collins: One of the first things that really surprised me is the wonderful relationship between creativity and discipline that really marks those who navigate an uncertain world. The most innovative and creative tend not to win without discipline. Our 10X companies — those that beat their industry index by at least 10 times — didn’t always out-innovate others. Creativity is natural, creativity is abundant, creativity is like breathing. What is not our natural state is being ferociously disciplined. That tends to be something we have to learn. And what 10Xers did so well was add a massive dose of discipline without destroying their creativity. That, I think, is a wonderful hat trick.
The second surprise for me was the way you want to respond to a rapidly changing world, a world full of rapid threats. You do not always want to act fast. Sometimes you want to act slow. Sometimes you want to let the situation unfold. Actually, you want to respond by first asking the question, “How much time do we have to make a decision before our risk profile changes?” We found our 10Xers felt no need to have to react quickly unless the situation demanded they react quickly. They would go slow when they can and fast when they must.
Profit: You found successful companies committed to consistently reaching — but not overshooting— a goal, something you call the 20 Mile March. Is this the same as being slow and steady?
Collins: I am not sure that I would describe it as slow and steady. I would describe it as ferociously consistent. Think about it this way: One of the companies we write about is Stryker, which is a medical devices company. Styker averaged 25 percent net income growth over the period of time that we studied it. You would never call this slow growth — it had very consistent growth. They always got above 20 percent, but they very rarely went above 30 percent, so they stayed on the 20 Mile March and even in difficult times, hit their mark.
I was having a conversation with a young woman who lost her job. She wanted to stay in the same industry, but the industry was having great difficulty, and she wasn’t quite sure what she was going to do to navigate to another position. So she set for herself a 20 Mile March. And that was to make three contacts a day. That doesn’t mean do 12 on a given day and then say to yourself, tomorrow I can do zero. That will get you out of the discipline of doing it. Instead, she made three contacts a day, every single day like clockwork. Her 20 Mile March gave her a way to get out of bed in the morning and cover the day.
The 20 Mile March is a very intense march. There’s nothing lackadaisical about it. What really stands out to me about the people committed to them is that no matter how difficult the conditions, they are still making progress. Others will let themselves off the hook.
Profit: How has your research influenced your outlook?
Collins: We started with a premise of a world beset with disruptive events, episodes of chaos, chronic uncertainty, instability under your feet. That kind of uncertainty is anxiety producing.
But when we looked at how people actually led in these environments, we found there are specific things you can do in response to that uncertainty. Once you understand what you can do to navigate uncertainty, you come away with a sense of calm. For example, you can set for yourself a 20 Mile March and that give you a way to assert disciplined action and self-control in the face of a world that’s out of control. Now when I look at an uncertain world, I have a sense of what I am going to do about it.
Profit: You wrote a famous article about how you make a list of what to stop doing as part of your annual New Year’s resolutions. What should executives put at the top of their own “Stop Doing” lists?
Collins: It really varies and you really have to think of your own, though I really encourage people to stop being so overscheduled. They need to block off time for themselves where they’re disconnected on purpose: no email, no cell phone, no texting, no connections at all so you can have a pocket of quietude to think. And the point during that time is to be engaged in disciplined thought.
Pockets of time for disciplined thought — where you’re fully awake and present but uninterrupted — are as important as sleep. When am in my home office, the way I start my creative time is by reaching behind my computer, unplugging my cable and throwing it across the room. Then I go into my creative bubble — it may be for an hour or six hours, but it’s usually two to three.
I think it’s hard for all of us to find this time, which is why I like having this ritual where there’s actually this moment where I physically throw the cable across the room. That way, I actually have to go through a step where I go get the cable and plug it in, which is at least a bit of a barrier. You know you’re breaking a rule when you do it.