Monday, August 29, 2016

Monday Review: Great by Choice 7

This is the final post reading through Jim Collins and Morten Hansen's book, Great by Choice.

1. The final chapter has to do with luck. Did the 10X companies have better luck than the comparisons, or did the comparisons have worse luck? Did the 10X companies have good luck earlier than the comparisons? Or was there a single, giant piece of good luck that made the difference?

Collins and Hansen say no. They say the difference is what 10X companies did during their luck that made the difference. By Collins' analysis, all the companies had pretty much the same overall amount of bad and good luck. They defined good luck as involving 1) some significant event independent of the people involved, 2) an event with potentially significant good or bad consequence, and 3) an event with some unpredictability to it.

2. There were a couple interesting examples of taking advantage of good luck, and of not taking advantage. AMD had some really good luck when Intel was vulnerable, but it wasn't able to deliver. Meanwhile, Intel's "fanatic discipline" saw them through that crisis. AMD failed.

Collins seemed reluctantly to acknowledge that it often comes down to people. If Amgen had not happened to snag Fu-Kuen Lin (who just happened to catch an ad in the paper), it probably wouldn't have developed the drug that made it boom. Without Bill Gates, Microsoft wouldn't have happened. Amid all the luck, good and bad, they finally seem to admit something I don't think they wanted to--the brilliance of specific people has often been the ultimate key.

Yes, yes, they were people with fanatical discipline. Yes, they were people who were empirically creative. Yes, they had productive paranoia. That's what Collins and Hansen have fronted in this book. But all those important elements still wouldn't have made a difference without some very key extraordinary people.

3. Bad luck, even really bad luck wasn't the end of many of these extraordinary characters. In fact, really bad luck sometimes was the driver that propelled them forward.

Here endeth the book review.

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