Jim Collins’ 12 Secrets to Business Greatness

Good to Great Author Jim Collins

• Instead of studying success, study the contrast between success and failure.
• Building a great company is a choice and it takes discipline.

Here are 12 traits and questions to ask yourself while pursuing greatness. All notes in this 12-point area are paraphrased comments or direct quotes from Collins...

1. What are your leadership traits?  Most of the great leaders had no charisma. True leadership is when people follow even when they aren't forced to follow. He pointed to Teach for America founder Wendy Kopp. Her humility attracts followers who want to "serve customers." It's the art of getting people to do what must be done. Get people to serve a cause -- not you. It's an art -- not a science.

2. Do we have the right people on the bus and in the right seats? People are not your most important asset. The right people are. What percentage of your key seats are filled with the right people?

3. What are the facts? Use the Stockdale Paradox to confront false hope and the worst facts about your business, and then have unwavering faith that you will succeed.

4. What's Our Hedgehog Concept? If you're leading, the edge goes to the hedgehog over the fox. Make a series of consistent decisions based with a single organizing idea. You start to get flywheel momentum. The hedgehog concept requires the clear intersection of three circles: (1) Do what you're passionate about because you can't endure pain for a long haul, (2) Do what you can be the best in the world at; if you can't be the best leave it to others. (3) Have an economic engine. Note: Big doesn't equal great, and great doesn't equal big. Instead, consider this: Will people be amiss if you went away?

5. Got fanatical discipline?: What's your 20-mile march? This was a theme during Collins' keynote at IT Nation a few years ago. Don't let the environment determine your pace. You determine your pace. Instead of doing 5 miles one day and 35 miles another day -- every day do your 20 mile march, regardless of the conditions around you. Consistency is always better. Exerting self control in a world out of control is better. For Collins, the 20-mile march involves 1,000 hours of creative thinking each year. Mediocrity is chronic inconsistency.

6. Got Empirical  Creativity?: Where should we place our really big bets? The pioneering innovator doesn't always win. Southwest Airlines copied another company's business plan. You don't need to be the most innovative. Instead, innovate in a different way. It's about the ability to scale innovations. Take a good idea that's small and then make it really big. Fire bullets instead of one cannonball -- here again, a theme he shared at IT Nation a few years ago. And a good concept at that. By firing bullets first, you can calibrate your line of site -- and then once you know where to really fire, you can fire you cannonball for a big result. Don't fire big, uncalibrated cannonballs -- they create a temporary splash but often sink fast.

7. Do we have enough productive paranoia? When we studied small companies, they carried three to 10 times the cash to average ratio. Find the black clouds to build contingencies. The only mistakes you can learn from are the ones you can survive.

8. Are you a clock builder or a time teller? Those who start great companies are time tellers. But you need to become a cloud builder -- a company that can be great without you. If your company can't be great without you, it is not yet a great company. Note: We succeed -- at our best -- only when we help each other succeed. He pointed to students at West Point who constantly help each other. "They are not alone." Check out the Re-Education of Jim Collins by Inc. Magazine.

9. Are you building culture to preserve the core and stimulate progress? Think of it as a giant ying-yang. The core has to be more than just make money. The point is to do something useful -- to make it matter you are in business. Then, pursue big, hairy, audacious goals?

10. What's your BHAG?: It's more than a mission statement. A BHAG -- big, hairy, audacious goals -- involves setting out to climb something really big. The best people want to join you because it's a difficult mission. If you know for certain you will achieve your mission... then it's not a BHAG. Sometimes, failing isn't failing... instead, the failure actually involves growing and making you stronger.

11. In the end what role does luck play in all this?: You've got all the right leaders, you've got the cash, you built your clock, you pursued BHAG, etc. And then the formula involves "+L" -- which means Luck. How much of your potential success involves the variable of luck? There'a lot of good luck and bad luck, but the best businesses don't win because of luck. The question is what you do with the luck that you get. He pointed out the IBM meetings with Digital Research and Microsoft... the search for an operating system for PCs. Both Microsoft and Digital Research got the same lucky meeting. Microsoft grabbed the luck, Digital Research did not. Roughly 50 percent of great leadership involves what you do with unexpected. Also, Luck favors the persistent. He pointed to another lucky break: Apple needed an operating system in 1997, and NEXT had one. Steve Jobs capitalized on that luck. We can't control every element of live, but true leaders stay in the game. If you see life as a series of hands in poker and you never leave the table. You NEVER leave the game. It adds up to a huge compounding effect. What if Jobs quit the IT industry in 1985, after being fired from Apple? Luck favors the persistent, Collins asserted.

12. What should be on your "stop doing" list? Do you have the discipline to know what not to do... and what not to do anymore?

BONUS: How will you change the lives of others?: Peter Drucker did two-thirds of his life's work after age 65. Drucker told Collins to spend more time trying to be useful. Collins also described how his wife was a world-class runner, but it had no real meaning. Eventually, she returned to her high school and built a top performing track team. They were dominant without individual stars. Investing in those kids made her happy. It gave her meaning.

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Ingram Micro EVP Paul Bay And CEO Alain Monié

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