How is Evolution in Visionary Company similar to a Tree?

Jim Collins mentions about this fascinating insight in his best selling book Built to Last.

Thus continuous experimentation & learning out of lessons learnt is the only way to progress. Visionary Companies time and time again bear ample testimony to the same.

Built to Last

Thus if you are building a visionary company be prepared to experiment, branch out and prune as needed.

Creating huge margins of safety to keep playing the infinite game


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”

Asymmetry between good luck and bad luck


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”

How high performers turn bad luck into good results?


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”

How Gary Kildall’s Digital Research missed the bus?


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”

When AMD squandered “good luck”


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.


What is “Return on Luck”


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

Adhering to a “20 Mile March” strategy needs character


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

Doing a “20 Mile March” consistently over time


The “20 Mile March” is a steady performance marker adopted by high performing organizations that help them survive the test of time

This steady march requires hitting specified performance markers consistently over a period of time.

This kind of a strategy needs exercise of self restraint during good times to not be greedy and abide by the set targets

Adopted from Jim Collins’s book titled “Great By Choice” , this is one of the unique defining characteristics that separates 10X companies from competitors

Why any business must understand these three risks?


Any business big or small must understand the following three risks and adopt necessary means to mitigate the same:

  1. Death Line Risk – This if not properly mitigated can kill or severely damage an enterprise
  2. Asymmetric Risk – The downside of such risks dwarfs the upside.
  3. Uncontrollable Risk – This cannot be controlled or managed and when occurs needs to be acted upon.

It has been observed that all high performing or 10X companies have demonstrated better ability in mitigating these risks than their competitors.This is what has made companies like SouthWest Airlines , Apple to where they are today