Week 5 - Jim Collins
Last week, I listened and re-listened and re-re-listened to Shane Parrish talking to Jim Collins in Keeping the flywheel in motion. Some of the stories, anecdotes, were nice. But what has really stayed me are some of these ideas Jim Collins talks about [...in his many books. ]. While listing them down, I am surprised at how many of these principles are as applicable to our personal lives (micro) as they are to business (the macro).
Here are some of those principles.
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1. Luck
Jim talks about the concept of 'Who' luck in addition to 'What' luck. We usually think about 'what' luck in our lives. But how many times do we think about - or wish for 'Who' luck? And when you read the biographies of interesting people, it always seems like they bump into the right people at the right time.
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2. Luck Events
I loved Jim and team's frame of the 'Luck event'. We always think about luck, never trying to define what luck is. They classify luck events as
- Events
- Outside your control
- Which you did not expect
- Which have asymmetry. Either very high upside compared to the downside, or negligible upside - but the downside will kill you.
Serendipitiously, in making my way through 'Antifragile' by Naseem Taleb, he talks about how Antifragile systems need to
- always escape from the killer events
- and have staying power to
- capitalize on the black swan event.
Thinking about luck this way changes everything!
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3. Decision Making
Problems lead to choices, leading to decisions looking to outcomes. Most of the time, if the outcome is good, we think the decision was right, and our decision making process is solid - but good outcomes don't always mean good decisions and vice Versa.
Generally, our decision process goes like this (consciously or unconsciously).
a. Defining the problem b. Figuring out our various options. c. Figuring out the pros and cons of each option. d. Assigning probabilities to each options. e. Decision.
The outcome matters - the probabilities and reasons matter almost more- and most people get them wrong. It is super important to work on getting better at the decision-making process. Making this explicit in a Decision Journal helps figure out our decision process.
Rough Format of a Decision Journal
Problem
Choice 1 -> probability -> pros, cons -> did you pick this or not? Why? Choice 2 -> prob 2 -> pros, cons -> did you pick this or not? why? Choice 3 --> prob 3 -> pros, cons -> did you pick this or not? why?
Decision? Reasons for picking choice
While reflecting back, you can check if i. Was the outcome desirable? ii. Were you reasons for picking that outcome valid? iii. Were your probabilities right?
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4. The 20-mile march
The 20-mile march is deciding carefully, to do something regularly for a long time. The example they talk about is about a company which decides to increase profits by 20% every quarter, for the next 20 years.
To do this, you need discipline, commitment yes. But also agility, dexterit, listening to the zeitgeist, honing your skills. Long term thinking. Great consistent execution.
Personal examples of this can be
- Pushups every day for a minute - for 20 years.
- Improve 1% everyday for 20 years
- Learn something everyday for the next 20 years
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5. Flywheel / snowball
Once you decide, and get on your 20-mile march, step-by-step, turn-by-turn, you build momentum. Till your business builds speed and becomes an overnight success.
In personal life, this is the '7 habits of highly successful people' or those really useful habits - the initial process of building a habit is show, painful and seems to go nowhere. It's only in the long term that you see the immense gains of a positive habit, and the downward spiral of the bad habit.
This is the same concept as compound interest, also lifelong learning.
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6. Confronting the brutal truth
Shane and Jim talk about how some companies were very good at looking at the ugly brutal truth. "Oh shit! This is ugly. We are Fucked. What the hell are we going to do?" While others just denied the situation.
This confronting the truth, or as different philosophies call it, 'the clear mind' or 'facing reality' - is a startpoint so you can figure out the required 20-mile march.
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7. Who is a Leader?
Jim's definition of a leader is - one who sees what needs to be done, and steps up to do it and influences others to help in doing it. The last step - influencing others is the key difference from an upstander and a leader.
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8. Level 5 Leaders
And they talked about 'Level 5' leaders - leaders who use vision, their full prowess, indomitable will, unyielding effort for a cause - outside of themselves. Do you have a cause, an idea, a company, a group of people, an art you are willing to stand for?
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9. Emotions
And they talk about how we all think that we are rational, but really, most of the time, we function at the level of emotions, of feelings. And how realizing that helps you become a leader.
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Photographs by Bruce Percy
ASCII divider art from here
The font used here is Gimlet XRay - January's delivery from the David Jonathan Ross' Font of the Month Club.