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Book Review: Great By Choice by Jim Collins

May 20th, 2012 Comments off

            Of the many aspects I enjoy about this blog is the opportunity to pass along recommendations about books or magazine articles that I come across. One of the books that I recently finished is Great By Choice by Jim Collins. This book comes on the heels of two other highly recognized books by Jim Collins, Good To Great and Built To Last. In his latest release, Collins extols the merits of proper planning and takes the position that with the proper amount of planning, companies can indeed map the proper path to greatness and achieve shareholder returns that are far above both market returns and/or segment returns.

            However, let’s be careful not to interpret that this book simply implies that any company, through some rudimentary planning, can become the master of their own destiny. The messages in this book are much more definitive and also take the time to dissect a number of industries, particularly the airline industry.  The time frame that the book also takes in analyzing its selection of companies and industries also spans a 3-decade window. A time frame in which there is plenty of time to witness consolidations, mishaps, bankruptcies, as well as opportunistic changes in long-term trends.

            With respect to the airline industry, there are few industries that have been subjected to the number of disruptions that this industry has. Overall, this industry has been subjected to some of the harshest disruptors any industry can experience;

-Repeated fuel shocks, Deregulation, Labor Strikes, Air Traffic Controller Strikes, Fare Wars, Massive CapEx investment, Sept-11 attacks, and recessions.

In consideration to these elements, Collins takes a very methodical walk through the elements that allow companies to move beyond average or subpar performance to greatness. In an overview of his concepts, he discusses;

-Thriving in uncertainty

-10xers

-20-Mile March

-Bullets vs Cannonballs

-Return on Luck

There are certainly more, but Collins takes a deep dive into the planning process undertaken by companies and that the preparation undertaken is to not only capitalize on new opportunities, but to mitigate the risk of “bad luck events”.  Collins emphasizes the point that there is no company that is immune to a bad luck event, but it’s the planning that minimizes the impact of the event. Conversely, it’s the quality of planning that allows a company to fully capitalize on a good luck event. There is also extensive discussion regarding the view that planning is not an overnight concept, but a more enduring “20-mile march”.  A planning process that is more longer term in nature.

            It’s difficult to give this book the credit it deserves in a short overview, but it’s certainly a worthwhile read. As I’ve often gone back and reviewed some of Collins’ previous books, I suspect that this one will also stand the necessary scrutiny years from now.

Thanks for reading…

Jeffrey Ishmael