Great By ChoiceBy Jim Collins and Morten T. Hansen

1

Great By Choice

• “Why do some companies thrive in uncertainty, even chaos, and others do not.”

• How the case where analyzed

o Company performance

o Extremity of Environment

Why?

1. The future is unpredictable and the world unstable

2. Insight is gained when studying a company under extreme conditions. Its what separates the great from mediocre

2

Great By Choice

• What is a 10X case?

• Moniker to describe a high-performing Enterprise

• Criteria of 10X Enterprise

1. Outperform the market and industry competitors, 15 + years

2. Results were achieved during turbulent times, uncontrollable events.

3. Began from a position of vulnerability.

3

Who Made the Cut and their Comparison Company(7 companies out 20,400 studied)

1. Amgen (Genentech)

2. Biomet (Kirshner)

3. Intel (AMD)

4. Microsoft (Apple)

5. Progressive Insurance (Safeco)

6. Southwest Airlines (PSA)

7. Stryker (United States Surgical Corporation USSC)

4

The Power of Contrast

• “What did the great companies share in common that distinguished them form their competitors”

• 10Xers outperformed competitors 30 to 1

• Every 10x case beats its industry index by at least 10 times

• If you , $10,000 invested 1972 your return $6 million in 2002.• 32 times greater than the market

5