Great by Choice

Question 1

What does ‘10Xers’ refer to in ‘Great by Choice’?

Answer 1

Companies that outperform their industries by at least ten times.

Question 2

Do 10Xers companies tend to be more innovative or risk-seeking than their counterparts according to ‘Great by Choice’?

Answer 2

No, they operate differently in specific ways but are not necessarily more innovative, risk-seeking, or visionary.

Question 3

What is the ‘20 Mile March’ concept in ‘Great by Choice’?

Answer 3

It refers to consistent progress with clear performance markers and self-imposed constraints, moving forward at a consistent pace regardless of circumstances.

Here are some more examples to illustrate the “20 Mile March” concept:

1. Amundsen and Scott’s Race to the South Pole:
   
   • This is the central historical example from the book itself. While both explorers aimed to reach the South Pole, Amundsen’s team marched a consistent 20 miles every day, irrespective of the conditions. In contrast, Scott’s team sometimes pushed excessively on good days and did little to nothing on bad days. Amundsen reached the pole first and returned safely, while Scott’s team faced tragic consequences.
2. An Aspiring Author:
   
   • Rather than waiting for inspiration to strike, an author decides to write a set number of words every single day, rain or shine, inspired or not. Over time, this discipline leads to multiple completed manuscripts.
3. Fitness Goals:
   
   • Instead of sporadic, intense workouts, someone chooses to exercise moderately but consistently, aiming for, say, 30 minutes a day, every day. Over time, they achieve better health outcomes than if they’d taken a more erratic approach.
4. Business Sales Goals:
   
   • A salesperson decides to make a minimum of 10 sales calls every day, no matter how many rejections they face. Their consistent efforts lead to a steady stream of clients and growth over the long term.
5. Investment Strategy:
   
   • An investor chooses to invest a fixed amount of money into the stock market at regular intervals, regardless of market highs or lows (a strategy also known as dollar-cost averaging). Over the long term, they build significant wealth due to their disciplined approach.
6. Studying for Exams:
   
   • A student decides to study a specific number of hours every day in the lead-up to exams, rather than cramming last minute. This consistent effort results in better understanding and retention of the material.
7. Musical Mastery:
   
   • A budding musician practices their instrument for a set period every day, irrespective of their mood or other commitments. Their steady dedication leads to significant skill development over time.

These examples underscore the “20 Mile March” idea: consistent, disciplined effort, regardless of external factors, can lead to superior results in the long run. It’s not about being the fastest or most intense but rather about being unwavering in one’s commitment to steady progress.

Question 4

Why is the ‘20 Mile March’ important for companies?

Answer 4

It emphasizes the importance of consistent performance and progress rather than erratic efforts, especially during challenging times.

Question 5

What does ‘Fire Bullets, Then Cannonballs’ mean in ‘Great by Choice’?

Answer 5

Before making big decisions, successful companies make small, low-risk attempts (bullets) to test the waters. Once they have empirical validation, they concentrate resources on bigger moves (cannonballs).

Question 6

How does ‘Leading Above the Death Line’ describe the risk approach of successful companies?

Answer 6

They take calculated risks and avoid those that could potentially jeopardize the company’s long-term survival.

Here are some pointers for leaders to ensure they operate above the death line:

1. Understand the Risks:
   
   • Always assess and deeply understand the risks involved in any strategic move. Ask: “What’s the worst that could happen? Can we survive that?”
2. Buffer and Preserve:
   
   • Maintain adequate reserves or buffers, be it in terms of finances, resources, or time. This allows your organization to weather unexpected setbacks.
3. Small Bets:
   
   • Instead of staking everything on one massive gamble, make smaller, empirical bets to test the waters. This ensures that even if something fails, it won’t be catastrophic.
4. Diversify:
   
   • Don’t put all your eggs in one basket. By diversifying risks across various projects or sectors, you ensure that a setback in one area doesn’t spell doom for the entire operation.
5. Calculated Boldness:
   
   • It’s okay to make bold moves, but they should be based on empirical evidence and rigorous analysis, not just gut feelings.
6. Constant Vigilance:
   
   • Regularly review and re-evaluate risks. What seems like a manageable risk today might evolve into a significant threat tomorrow.
7. Build a Strong Culture:
   
   • Foster a culture where employees at all levels feel empowered to speak up about potential risks. This way, threats can be identified and mitigated early on.
8. Learn from Failures:
   
   • When setbacks do occur (as they inevitably will), use them as learning opportunities. Analyze what went wrong and adjust strategies accordingly to avoid similar pitfalls in the future.
9. Avoid Overextension:
   
   • Expansion and growth are good, but expanding too fast or taking on more than you can handle can quickly lead you towards the death line. Always grow at a pace that you can sustain and manage.
10. Plan for the Worst:
    - Always have contingency plans in place. Ask questions like: “If our primary plan fails, what’s our backup?” or “If the market changes dramatically, how will we adapt?”
11. Commit to Continuous Improvement:
    - Never rest on your laurels. By continually improving and adapting, you ensure that you’re always a step ahead of potential risks.

Remember, leading above the death line doesn’t mean avoiding all risks; it means understanding, managing, and mitigating risks in a disciplined way to ensure the long-term survival and prosperity of the organization.

Question 7

What does SMaC stand for in ‘Great by Choice’?

Answer 7

Specific, Methodical, and Consistent.

Question 8

Why is SMaC important for companies?

Answer 8

SMaC provides companies with a set of clear and specific guiding principles or operating practices, especially beneficial during turbulent times.

Here are some pointers to help leaders craft and uphold their SMaC:

1. Specificity is Key:
   
   • Ensure your SMaC recipe is clear and specific. Avoid vague or generic guidelines. It should be crystal clear what behaviors are expected and which ones are not permissible.
2. Limit the List:
   
   • A good SMaC recipe isn’t endless. Ideally, it should consist of a handful of guiding principles. Too many principles can dilute focus.
3. Empirical Validation:
   
   • Your SMaC should be based on empirical evidence of what works in your organization’s specific context, not just on theory or speculation.
4. Durability:
   
   • While the world changes rapidly, your SMaC should remain relatively stable over time. It’s a recipe that provides consistency in the midst of change.
5. Adapt, but not Frequently:
   
   • While a SMaC recipe is durable, it’s not immutable. It should change only when absolutely necessary and based on significant empirical evidence.
6. Communicate Extensively:
   
   • Ensure everyone in the organization understands and is aligned with the SMaC. Regularly reiterate its principles so they become deeply ingrained in the company’s culture.
7. Use as a Decision Framework:
   
   • When faced with decisions or new opportunities, refer back to your SMaC to guide your choices.
8. Monitor and Uphold:
   
   • Regularly review processes and decisions to ensure they align with your SMaC recipe. Ensure that deviations are exceptions and not the rule.
9. Avoid the Temptation to “Loosen Up”:
   
   • Especially in good times, resist the temptation to deviate from what’s been proven to work. Remember, the SMaC provides stability.
10. Involve the Team:
    - While leadership plays a critical role in developing and maintaining a SMaC, involve team members in its formulation. They often provide valuable insights and will be more committed to principles they had a hand in creating.
11. Review and Reflect:
    - Periodically take time to reflect on your SMaC. Is it still serving its purpose? Do minor adjustments or major changes need to be made based on new empirical evidence?
12. Balance with Innovation:
    - While SMaC provides consistency, it shouldn’t stifle innovation. Allow room for experimentation outside the SMaC, but if something new and innovative proves successful, consider whether and how the SMaC needs to be updated.

In essence, a SMaC recipe acts as an organizational “North Star”, guiding actions and decisions in a consistent manner, regardless of external changes or pressures. Properly crafted and adhered to, it can be a powerful tool for maintaining alignment, focus, and disciplined action.

Question 9

How do 10Xers companies approach luck according to ‘Great by Choice’?

Answer 9

Both successful and unsuccessful companies encounter luck. However, 10X companies maximize the Return on Luck (RoL) from good luck events and effectively manage the bad luck events.

Question 10

What is the overarching theme of ‘Great by Choice’?

Answer 10

While we can’t predict the future in chaotic and uncertain environments, we can choose to be disciplined and make specific decisions to achieve greatness.