CHOICEGREAT BY

by Jim Collins and Morten T. Hansen

Why do some companies

in uncertainty, even chaos, and others do

not?

THRIVE

It's all about understanding the

PRINCIPLESthat distinguish great organizations from

good ones.

HavingExecuting 20 Mile Marches

10x Leadership

Firing Bullets, then Cannonballs

Leading above the Death Line

Having a SMaC Recipe

MaximizingReturn on Luck (ROL)

The Principles

10x LEADERSHIP10X Leaders have purpose, long-term goals, severe

performance standards and... the FanaticDiscipline to adhere to them

They're not more creative

They're not more visionary

They're not more heroic

They're not more charismatic

They're not more ambitious

They're not more blessed by luck

They're not more risk taking

They're not more prone to making big, bold moves

What 10x Leaders are NOT

10X LEADERS HAVE

CORE BEHAVIORS

three

Fanatic Discipline

Relying on direct observation, conductingpractical experiments and/or engaging directlywith evidence. Making bold, creative moves froma sound empirical base.

Extreme consistency of action, valuesand goals. Mental independence and anability to remain consistent in the faceof herd instinct and social pressures.

Empirical Creativity

Maintaining hyper vigilance in good times as wellas in bad. Channeling fear into action, developingcontingency plans, building buffers andmaintaining large margins of safety.

Productive Paranoia

10X LEADERS DEFINE THEMSELVES BY

IMPACT

CONTRIBUTIONPURPOSE

Underlying the three core 10Xer behaviorsis a motivating force called

LEVEL 5 AMBITION

LEVEL 5 AMBITION

10X Leaders channel their ego and intensity intosomething larger than themselves.

They're passionately driven for a cause beyondthemselves.Such as: Building a great company, changing the world or achieving a greatobjective that's not about themselves

They reject the idea that luck, chaos or any otherexternal factor determines their success or failure.

20 Mile Marchhaving concrete, clear, intelligent and rigorously pursued performance

mechanisms

20 Mile March helps to:Build confidence in your ability to perform wellin adverse circumstances.

Reduces the likelihood of catastrophe whenyou're hit by turbulent disruption.

Helps you exert self-control in an out-of-control environment.

Elements of a 20 Mile MarchClear performance markers for minimum performance that createproductive discomfort.

Self-imposed constraints for maximum performance.

Tailored to your specific enterprise.

Within the company's control to achieve. You shouldn't need luck.

A Goldilocks Timeframe - not too long, not too short but just right to beeffective.

Designed by your company for your company.

Must be achieved with great consistency. Good intentions don't count.

Bullets,Fire

then

CannonballsOnly 9% of innovators ever dominate market share

WHAT IS Abullet?

A bullet is an empirical test or experiment aimed at learningwhat works and that meets three criteria:

1

2

3

LOW COST

LOW RISK

LOW DISTRACTION

THE PROCESS

1. Fire bullets to figureout what will work

2. Obtain empiricalconfidence in your

bullet

3. Concentrate yourresources, build a

cannonball

4. Fire a cannonball.After the cannonball

hits...

5. Keep 20 MileMarching to make the

most of your bigsuccess

CREATIVITIY+DISCIPLINE

= ScaleThe combination of creativity and discipline translate into the ability to

scale innovation with great consistency

LEADING ABOVETHE DEATH LINE

PRACTICING PRODUCTIVE PARANOIA

PRACTICE

PRODUCTIVE

PARANOIA

Buildcash reserves andbuffers.

Preparefor unexpected eventsand bad luck before theyhappen.

Actively boundand

risk Zoom Outthen zoom in

manage

Zoom Out1. Sense a change in conditions 2. Assess the time frame 3. How long before the risk profile changes? 4. Assess with rigor 5. Decide! Do we disrupt our plans? If so, how?

Zoom InFocus on supreme execution of plans andobjective

SMaC Recipe

SpecificMETHODICAL

& CONSISTENT

Recipe

WHAT IS A SMaC RECIPE?

• A written document. Your Manifesto • A durable set of operating practices • A consistent success formula that's replicable • If absolutely needed, only change one item at atime

Return on Luck is NOT THE

SAME as luck

Getting Great RoL

• Keep pushing, driving for your overall goal or cause. Luck, good and bad willhappen

• Build a culture that can achieve results with or without luck

• Firing bullets can present you with new opportunities. Don't wait for luck

• Manage risk to combat bad luck

• Practice Zoom Out/Zoom In to recognize luck and see if it meritsdisrupting your plans

• Have a SMaC Recipe that guides you during a luck event

CHOOSE

GREATNESS