In April 2012 I saw the book presentation ‘Great By Choice’ presented by Morton Hansen, at the INSEAD US Alumni meeting in New York. A must read book for professionals interested in product management and innovation.
Jim Collins (Good to Great) writes his new bestseller after 10 years. Together with Morton Hansen he investigates which factors explain the difference between successful companies and ‘average’ peers in their industries. They studied not only why the so-called 10X companies were successful, but why they were able to outperform their peers 10 times better over a number of KPI’s over a period of 15 years.
This book shows some surprising results, which may look counter-intuitive at first sight. A first myth is that we need bold and risktaking visionary leaders. The finding is that leaders of 10X companies execute with great discipline, and use experiments. They perform many pilot projects and test investment before they are brought to the whole market.
10X companies are not necessarily more innovative that less succesful companies, in some cases they are even less innovative. But they can bring innovations to the market on a large scale, while blending creativity and discipline.
In fast changing times, where technology is changing rapidly, leaders and companies are urged to take decisions fast. This is a general perception. However their research suggests that 10X companies do not necessarily change faster, or change their business model. The secret here is that 10X companies know when to change and when not to change. Wo 10X companies do not always adjust when their environment changes.
10X companies are not more creative, visionary or ambitious, nor do they have more charismatic leaders. 10X companies are aware of the changing environment, but will not change for the sake of change. 10X companies can handle uncertainty, by finding a good balance between control and no control.
One of my personal favourites of the book is: ‘Fire Bullets, Then Cannonbals’, meaning that companies should use low-risk, low-distraction experiments. Based on the empirical validation, they can then invest more resources to increase the scope of the market opportunity.