Adopted from Jim Collins’s book titled “How the Mighty Fall”
The 5 stages of decline of great companies are:
The infinite game of business is where the players are unknown , time in unlimited and the rules are unknown.
The goal of players in an infinite game is to keep playing the game.
10X companies or high performing companies in the infinite game of business , exercise productive paranoia , empirical creativity and fanatic discipline to create huge margins of safety.
In the infinite game of business when the tide is rough these huge margins of safety safeguard a high performer being knocked out.During good times for luck to help these high performers derive high return on luck firstly they have to survive the rough times via the huge margins of safety.
Adopted from Jim Collins’s book titled “Great By Choice”
The interesting asymmetry between good luck and bad luck is that:
A single stroke of good luck , no matter how big the break , cannot by itself make a great company.
But a single stroke of extremely bad luck that slams you on the Death Line , or an extended sequence of bad luck events that creates a catastrophic outcome , can terminate the quest.
Adopted from Jim Collins’s book titled “Great By Choice”
High performers shine when clobbered by setbacks and misfortune.
These are ones who use difficulty as a catalyst to deepen purpose . recommit to values . increase discipline and respond with creativity.
They heighten productive paranoia and use resilience to overcome all obstacles to reach greatness.
Adopted from Jim Collins’s book titled “Great By Choice”
Gary Kildall and his company Digital Research had come up with an advanced operating system DR DOS for shipping to IBM PC’s.
Due to a glitch in Microsoft’s operating system , IBM had become eager to sign a contract with Digital Research for shipping it’s OS in all IBM PC’s.
But due to lack in discipline Digital Research missed the bus and could not become the modern day Microsoft.
Unlike Digital Research 10X companies do not make such mistakes and ensure high return on luck when presented with such golden opportunities.
Adopted from Jim Collins’s book titled “Great By Choice”
AMD gave Intel a run for its money when in the mid 1990’s AMD’s K5 processor had all features of Intel’s Pentium processor and was sure to grab a lot of Intel’s market share.
The opportunity AMD had got with its K5 chip to topple Intel’s market leader position was squandered when the K5 chips came to market later than expected due to issues in getting the chips delivered to market on time.
Adopted from Jim Collins’s book titled “Great By Choice”
Please find below the link from wikipedia.com that talks about all such things related to the K5 chip.
https://en.wikipedia.org/wiki/AMD_K5
Adopted from Jim Collins’s book titled Great By Choice
High performers or 10X performers make the most of an opportunity.Luck for them is “preparation meeting an opportunity”
These are high performers who make the most use of luck to get high ROL or Return on Luck to leave competitors by the wayside.
Think of Bill Gates and how he got exposed to computer during Baby Boomer age and how he made the most out of the opportunity
Luck in the context of business meets the following three tests
1) Some significant aspect of the event occurs largely or entirely independent of the actionsof the key actors in the enterprise
2) The event has a potentially significant consequence
3) The event has some element of unpredictability
Adopted from Jim Collins’s Great By Choice
All top performers are guided by a good & steady 20 Mile March approach has the following seven key aspects :
1) Clear performance markers
2) Self imposed constraints
3) Specific to an enterprise
4) Largely within company’s control to achieve
5) Needs a proper timeframe to achieve
6) Imposed by the company upon itself
7) Achieved with high consistency else this is not sustainable
Adopted from Jim Collins’s book titled “Great By Choice”
This is a specific performance marker that 10X companies adopt consistently over a period of time
Adhering to this metric needs true character and requires two distinct types of discomfort:
1) Showing self restraint and holding back in good times without being greedy so that
2) High performance is delivered during difficult times
Think of SWA and profit delivered immediately post 9/11
Adopted from Jim Collins’s book Great By Choice