Jim Collins in his book "Great by Choice", try to respond the the question of why some companies make the leap from being good to being great, while others, no matter how similar to them, fall in the pit of mediocrity.
Great companies are no luckier than good companies; and, that they succeed because, even in the case of chaos and uncertainty, they go on working as if everything is as orderly as ever. First of all, they were disciplined. They didn’t rush anywhere. They preferred consistency over rapid rise. By setting themselves targets and hitting them precisely year by year, they became immune to external influences.
Secondly, they were bold, only when boldness mattered. In other words, their leaders weren’t interested in taking risks, and, thus, weren’t required to be any more visionary than those of merely good companies. All of the “10X companies” – companies which beat their industry indexes y at least 10 times in as many years – Collins and Hansen analyzed did just that to overcome difficult situations.
FANATIC DISCIPLINE.
Fanatic discipline is about (a) adhering unyieldingly to certain values, purpose, long-term goals or performance standards, and (b) taking consistent action/ doing whatever it takes to deliver those outcomes. In times of change or uncertainty, this discipline acts as an anchor, keeping the company on track and preventing it from blindly following the herd.
The authors use the analogy of a “20 Mile March” to explain fanatical discipline. Imagine 2 people traveling across the globe. Tom steadily covers 20 miles a day—regardless of the terrain, rain or shine—while Jack covers 35-40 miles on a good day and 0-5 miles on a not-so-good day. To achieve such consistent performance, Tom will have to overcome 2 discomforts: (a) to push himself to stay motivated and maintain his performance on bad days and (b) to exercise self-control so he doesn’t overexert himself on good days. In the long run, Tom’s results will be much more predictable than Jack’s.
EMPIRICAL CREATIVITY: Fire Bullets, Then Cannonballs
In times of uncertainty, most people follow what others do, e.g. fall back on prevailing norms, peer advice or authority figures. 10Xers don’t follow the herd, nor trust conventional wisdoms, expert opinions or untested ideas. They perform their own due diligence through direct observation, experiments and/or research. This allows them to make bold/creative moves from a solid empirical foundation.
In short, they fire lots of bullets to test/refine their aim, then fire calibrated cannonballs only when they know what works.
PRODUCTIVE PARANOIA: Leading above the Death Line
Unlike comparison companies, 10Xers stayed super-vigilant even when they were doing well and external conditions were rosy. They knew that things could change anytime and were paranoid about being prepared for unforeseen circumstances.
After all, to become great, you must first survive. A company “hits the death line” when it dies or becomes so battered that it cannot fully recover. 10Xers lead above the Death Line, channeling their fear/paranoia into productive action.
Level 5 Ambition
Exhibiting all 3 behavioral traits above can be quite extreme and intense. Yet, people are willing to follow 10X leaders because of the company’s Level 5 ambition, i.e. a larger and more enduring cause behind the company and its work. The discipline and persistence are held together by a wider purpose.
Some people see luck as the only explanation for massive success; others see luck as a non-factor. But the research found that neither extreme holds true. Some companies and some people are indeed luckier than others—people can be born into better circumstances with many more opportunities. However, luck can’t carry you all the way through to success. Whatever luck you get requires action on your part to determine the outcome.
Source: Collins, J.C. and Hansen, M.T. (2011) Great by choice: Uncertainty, Chaos, and luck. New York, NY: HarperCollins Publishers.