L A U RA C A R R , I K E H U E S T I S , B RA D K L I N G B E R G , T R E A N N E T U R N E R

EPILOGUE &FREQUENTLY ASKED

QUESTIONS

Team

2

EPILOGUE

• “One should…. Be able to see that things are hopeless and yet be determined to make them otherwise.” - F. Scott Fitzgerald

• Good and Bad Luck• One company becomes great while other companies do

not

• Root?• NOT circumstance or luck

• Greatness is not primarily a matter of circumstance; greatness is first and foremost a matter of conscious choice and discipline • Cause of greatness is people

FREQUENTLY ASKED QUESTIONS

• Question 1- Where any of the concepts from Good to Great, Built to Last, or How the Mighty Fall overturned by this research?• 10X cases exemplified the prior concepts to a greater

degree than the comparison cases

• Question 2- To what extent did the Level 5 leaders in Good to Great exhibit 10xer behaviors?• Less productive than good to great leaders than 10x

leaders• Good to great operated in safer environments than 10x

FREQUENTLY ASKED QUESTIONS CONT.…

• Question 3- What role does the “First Who” principle play when leading a company amidst uncertainty and chaos?• getting the right people onto the bus in the right seats

• Question 4- Is there a relationship between the SmaC recipe and the Hedge-hog from Good to Great

• Hedgehog momentum by making a series of decisions relentlessly consistent with that concept • SMaC recipe code for translating a high-level

Hedge- Hog concept into specific action for keeping an organization focused in the same direction, thereby building flywheel momentum

• Question 5- Do you have any guidance for how to craft a SMaC recipe?• Practical, empirical, and when possible, the specific and

concrete• Ex: Southwest Airlines- gate turn around in 10 min• Ex: Assemble in 5 min flat• Make a list of accomplishments, disappointments,

practices that are successful and successful, and why or why not they work.

Q: IF THE 10X CONCEPTS ARE UNIVERSAL, WHY DIDN’T THEY BECOME STARKLY CLEAR IN GOOD TO GREAT?

A: THE GOOD TO GREAT STUDY FOCUSED ON HOW TO MAKE A LEAP FROM OPPRESSIVE MEDIOCRITY TO GREAT RESULTS. THIS STUDY, IN CONTRAST, SELECTED SMALL OR START-UP COMPANIES THAT BECAME GREAT IN UNCERTAIN, UNFORGIVING, AND CHAOTIC ENVIRONMENTS.

Q: IF I’M NOT A FULL 10XER, CAN I COMPENSATE BY BUILDING A 10X TEAM THAT HAS ALL THE BEHAVIORS?

A: INSTEAD OF FOCUSING ON WHETHER ANY GIVEN INDIVIDUAL IS A 10XER, IT’S BETTER TO WORK AS A TEAM TO IMPLEMENT THE KEY IDEAS AS AN ENTIRE ENTERPRISE.

Q: DOES LEADING ABOVE THE DEATH LINE MEAN AVOIDING BHAGS (BIG HAIRY AUDACIOUS GOALS)?

A: NO, THE TASK IS TO PURSUE THE BHAGS AND ALSO STAY ABOVE THE DEATH LINE.

Q: HOW IS THE 10X CONCEPT “FIRE BULLETS, THEN CANNONBALLS” DIFFERENT FROM THE BUILT TO LAST CONCEPT “TRY A LOT OF STUFF AND KEEP WHAT WORKS”?

A: THE TWO IDEAS OVERLAP, BUT THE KEY ADDITIONAL INSIGHT FROM THE 10X RESEARCH IS THAT 10XERS FOLLOW UP SUCCESSFUL BULLETS WITH CANNONBALLS.

Q: WHAT ARE THE IMPLICATIONS FOR INNOVATION-DRIVEN ECONOMIES OF YOUR FINDING THAT 10X CASES DIDN’T ALWAYS OUT-INNOVATE COMPARISON COMPANIES?

A: 10X SUCCESS REQUIRES THE ABILITY TO SCALE INNOVATION WITH GREAT CONSISTENCY, BY BLENDING CREATIVITY AND DISCIPLINE TO BUILD ORGANIZATIONS THAT TURN INNOVATION INTO SUSTAINED GREAT PERFORMANCE.

Q: YOU MENTION THE “GENIUS OF THE AND” A FEW TIMES IN THE TEXT. WHAT IS THE GENIUS OF THE AND AND HOW DOES IT APPLY HERE?

A: THE “GENIUS OF THE AND” REFERS TO THE ABILITY TO EMBRACE BOTH EXTREMES OF A NUMBER OF DIMENSIONS AT THE SAME TIME. IT APPLIES HERE BECAUSE THE 10X STUDY FOUND EXTENSIVE EVIDENCE OF LEADERS UTILIZING AND BECOMING LIBERATED THROUGH THIS CONCEPT.

Q: HOW DO YOU RESPOND TO CRITICS OF YOUR RESEARCH FINDINGS WHO POINT TO THE FAILINGS OF PREVIOUSLY GREAT COMPANIES YOU’VE RESEARCHED AND WRITTEN ABOUT?

A: THE RESEARCH IS BASED UPON STUDYING SPECIFIC, DYNASTIC ERAS OF PERFORMANCE. A DYNASTY THAT LATER CEASES TO BE A DYNASTY IS IRRELEVANT TO THE OVERALL ANALYSIS OF WHAT IT TAKES TO BE A GREAT COMPANY.

Q: CAN THIS BOOK HELP COMPANIES AVOID THE FIVE STAGES OF DECLINE OUTLINED IN HOW THE MIGHTY FALL?

A: YES. IN FACT, THE COMPARISON CASES IN THIS STUDY THAT FELL FROM POTENTIAL GREATNESS ALL SHOWED ELEMENTS OF STAGES 1-4, AND SOME WENT ALL THE WAY TO STAGE 5.

Q: HOW DID YOU TWO (JIM AND MORTEN) BEGIN YOUR WORKING PARTNERSHIP, AND WHY DID YOU DO THIS RESEARCH PROJECT AS A TEAM?

A: JIM AND MORTEN MET AT STANFORD GRADUATE SCHOOL OF BUSINESS IN 1991. THE TWO ALWAYS TALKED ABOUT COLLABORATING FROM THE GROUND UP, AND THEY BOTH FOUND THE TOPIC OF “UNCERTAINTY” AS A MUTUALLY FASCINATING QUESTION.

Q: DO YOU SEE YOUR BOOK AS ABOUT DEFINING AND THRIVING IN A NEW NORMAL?

A: NO. THE PREMISE BEHIND THE BOOK IS THAT THERE WILL BE NO “NEW NORMAL”. INSTEAD, THERE WILL ONLY BE A CONTINUOUS SERIES OF “NOT NORMAL” TIMES.

Q: HOW WIDELY APPLICABLE IS THE QUESTION UNDERLYING THIS STUDY? DO YOU SEE IT AS A UNIVERSAL?

A: THE QUESTION OF WHAT IT TAKES TO THRIVE IN THE FACE OF UNCERTAINTY, EVEN CHAOS, FEELS RELEVANT TO EVERY INDUSTRY AND EVERY SOCIAL SECTOR THAT HAS BEEN ENCOUNTERED BY THE AUTHOR.

Q: DO YOU SEE THE CAUSES OF CHAOS AND UNCERTAINTY AS PRIMARILY ECONOMIC?

A: NOT ENTIRELY. THERE ARE CERTAINLY ECONOMIC DRIVERS, BUT THE SOURCES OF INSTABILITY COME FROM FAR OUTSIDE ECONOMICS.

Q: DO YOU SEE THIS BOOK AS ABOUT THE PAST OR THE FUTURE?

A: THE AUTHOR HAS ALREADY STUDIED THE PAST, BUT HE SEES THIS BOOK AS HAVING GREAT RELEVANCE FOR LEADING IN THE FUTURE.

Q: MY WORLD FEELS FAIRLY STABLE RIGHT NOW; DOES THIS APPLY TO ME?

A: THOSE WHO FAIL TO PLAN AND PREPARE FOR INSTABILITY, DISRUPTION, AND CHAOS IN ADVANCE TEND TO SUFFER MORE WHEN THEIR ENVIRONMENTS SHIFT FROM STABILITY TO TURBULENCE.

Q: DO THE 10X CONCEPTS APPLY AS MUCH TO THE SOCIAL SECTORS AS THE GOOD TO GREAT IDEAS?

A: LEADERS FROM A WIDE RANGE OF SOCIAL SECTORS FACE BIG FORCES THAT ARE OUTSIDE THEIR CONTROL, HIGH DEGREES OF UNCERTAINTY, FAST-MOVING ELEMENTS, DANGEROUS THREATS, AND DISRUPTIVE OPPORTUNITIES.

Q: DO YOU SEE THIS WORK AS BEING PRIMARILY ABOUT NAVIGATING IN TIMES OF AUSTERITY AND CRISIS?

A: NO. THIS IS NOT A BOOK ON CRISIS MANAGEMENT, NOR IS IT ABOUT THRIVING AMIDST RECESSION OR EVEN ECONOMIC CALAMITY.

Q: HOW DID THE 2008 FINANCIAL MELTDOWN AFFECT YOUR THINKING FOR THIS STUDY?

A: IT SERVED ONLY TO REINFORCE THE RELEVANCE OF THE STUDY QUESTION. WE CAN NOT KNOW WITH CERTAINTY WHEN A FINANCIAL CRISIS WILL COME, BUT WE CAN KNOW WITH CERTAINTY THAT IT WILL COME.

Q: ARE YOU MORE OR LESS OPTIMISTIC AND HOPEFUL AFTER CONDUCTING THIS STUDY?

A: THE AUTHOR IS MUCH MORE OPTIMISTIC AND HOPEFUL. HE TAKES PARTICULAR SOLACE FROM THE FACT THAT EVERY 10XER MADE MISTAKES, YET THEY WERE ABLE TO SELF-CORRECT, SURVIVE, AND BUILD GREATNESS.

COMPARISON

PATTERNS OF INTERNATIONALIZATION

• Sheltered Industries• Trading Industries • Multidomestic Industries • Global Industries

• Foundations of Strategy

PORTER’S NATIONAL DIAMOND

CHOOSING WHERE TO LOCATE PRODUCTION

• National Resource Availability• Firm-specific Competitive Advantages• Tradability• Political Considerations

• Foundations of Strategy

OVERCOMING KEY ORGANIZATIONAL HURDLES

• Managers face 4 hurdles:• 1) Cognitive• 2) Limited Resources• 3) Motivation • 4) Politics

• Blue ocean Strategy

BREAK THROUGH THE COGNITIVE HURDLE

• “Messages communicated through numbers seldom stick with people.”• “..making people see and experience harsh

reality firsthand.”• 1) Ride the “Electric Sewer”• 2) Meet with Disgruntled Customers

JUMP THE RESOURCE HURDLE

• 1) Redistribute resources to your hot spots• 2) Redirect resources from your cold spots• 3) Engage in Horse Trading

JUMP THE MOTIVATIONAL HURDLE

• 1) Move in on Kingpins• 2) Place Kingpins in a Fishbowl • 3) Atomize to Get the Organization to Change

Itself

KNOCK OVER THE POLITICAL HURDLE

• Secure a Consigliere on your Top Management Team • Leverage your Angels and Silence your Devils

APPLYING THE THEORIES TO REAL WORLD

COMPANIES

D I C K ’ S S P O RT I N G G O O D S

SMAC RECIPE

• Simple, Methodical, Consistent

• Bad example: Our goal is to be the number one sports and fitness specialty retailer for all athletes and outdoor enthusiasts, through the relentless improvement of everything we do.

SMAC RECIPE

• Good example: Open a 600,000 square foot distribution center in 2013 that, when combined with our existing facilities, will enable us to support a total of approximately 750 stores

BULLETS AND CANNON BALLS

• How is the Bullets and Cannon Balls strategy different from the concept “try a lot of stuff and keep what works”?

• Just keeping what works isn’t enough to become a 10Xer. You need to make the big bet to exploit what the bullet taught you.

BULLET…

CANNON BALL!