Jim Collins: The Best Author in Business Books

The best author in business writing is not a business person. That’s why he stands above the field.

Jim Collins brings an academic discipline to questions most authors answer from their subjective point of view. Instead of memoir-as-management-advice, he gives readers something rarer: findings drawn from data, not the chance events and personality-driven choices of one person’s executive career.

Collins has turned himself into a business enterprise with justified success but he’s a business person only as a sideline to his primary function as an academic. It is this academic approach that elevates his writing above everything else I’ve read.

Most business writing – aside from Collins – is based on personal experience. A significant portion of it is less about enterprise management and more about the personality of the author. This doesn’t make it bad, but personal experience is a single data point, and in a sea of uncertainty one data point has only a ghostly relevance.

Collins’ writing is different because it arises from a completely different basis. A business question intrigues him, he assembles a research team, and they spend years gathering information relevant to that question. The team then distills the data into findings published as one of his books.¹

The Method

Collins understands that finding what great performers have in common is not enough. If all the successful companies in a study innovated a great deal does that mean innovation is a key to performance? Not necessarily; in How The Mighty Fall Collins found – against his own expectations – that failed companies innovated just as much as those that did well.

To avoid “discovering” commonalities that do not actually differentiate between success and failure, Collins identifies a comparison company for each successful company in his focus group. The comparison company is in the same industry, has a similar history, and comparable economic status. They are substantially alike. Yet for every successful focus company, its counterpart failed.

Now, Collins asks, what behaviors do the focus companies exhibit in common, contrasted with the behaviors of the the comparison companies? Those contrasts isolate the behaviors that produced different outcomes.

Thus the findings are nobody’s opinion, nor are they dependent on a single personality or set of circumstances. Their demonstrated applicability across multiple companies and industries indicates they are lessons that can be applied virtually anywhere, by virtually anyone.

The Value: Practical Advice For Repeatable Results

There is objective, inherent value in Collins’ writing that the bulk of business writing lacks because his method identifies specific practices that can be executed by anyone to produce repeatable results.

This doesn’t make the work easy. Building a world class business or transforming a mediocrity requires years or decades of focused effort. But with the requisite leadership skills and tenacity Collins’ writing is a road map to getting it done, something no other body of work I’ve read has provided as effectively.

Let’s compare Collins’ advice to that found in Execution by Larry Bossidy and Ram Charan.

I’ve seen Execution on a number of managerial bookshelves – it has a big following. And it’s a fine book; the authors are seriously accomplished business leaders and thinkers. I’m not picking out their work as particularly problematic, only as representative of a different, and in my opinion less useful, approach to business writing.

I am an author in the model of Execution, speaking from personal experience. The style of writing of Bossidy, Charan, me, and thousands of others is not without value. It is merely limited compared to what the Collins method delivers.

Both Collins and Execution examine how an enterprise chooses new lines of business to enter. How do we evaluate the risks?

The Usual Approach: Consult Your Oracles; Pray They’re Right

Execution advises:

"You start by asking four basic questions about each [idea]:

·         Is the idea consistent with the realities of the marketplace?

·         Does it mesh with our organization’s capabilities?

·         Are we pursuing more ideas than we can handle?

·         Will the idea make money?

You get the answers from robust dialogue among the business leaders, with help from the planning staff. Then together you can make a decision about which ideas to pursue.^"2

These are nebulous points. “The realities of the marketplace” may not exist yet, as in the case of Federal Express, which created the market it came to dominate.

Meshing with existing capabilities is wise, but is there empiric evidence that it predicts success or failure? Consider General Electric, which was in businesses spanning consumer appliances, jet engines, finance and medical devices. Or United Technologies, operating companies in elevator manufacturing, air conditioning, aircraft propellers, rockets, jet engines, security hardware and helicopters. Existing capabilities had no place in how they expanded their business.³

Question three about the number of ideas being pursued is valid, but irrelevant to deciding which of those ideas will work.

“Will the idea make money?” is circular. The entire discussion aims to determine if an idea can be profitable. Analyzing profitability by asking “Will the idea make money?” is spinning our wheels.

This is characteristic of Execution. There’s nothing precisely wrong with its advice; it just doesn’t amount to enough in a concrete sense.

Its advice on promoting discussion that contains both vibrant argument and progress towards shared vision and goals is insightful and worthy of emulation. But in the end Execution’s advice on navigating the perilous waters of new product ideas comes down to “Cross your fingers that someone in the room had crystal ball premonitions.”

The Collins Approach: More Science Than Divination

Collins found something something more specific about choosing the right ideas. His finding is that innovative businesses expanding their product lines successfully are not staffed by visionaries with prophetic instincts. They’re smart but ordinary people who can’t predict what will work – so they try many things using a cautious, incremental and specific method. Most ventures fail and are abandoned. The successful are expanded and funded.

Collins calls it “bullets, then cannonballs”: “firing” many small, cheap bullets before investing in the heft and expense of a cannonball. Collins’ bullets are “low cost…low risk…low distraction”⁴ explorations that generate empirical evidence of what works.

Collins spells out the bullets and cannonballs process:

·         Fire bullets.

·         Assess: Did your bullets hit anything?

·         Consider: Do any of your successful bullets merit conversion to a big cannonball?

·         Convert: Concentrate resources and fire a cannonball once calibrated.

·         Don’t fire uncalibrated cannonballs.

·         Terminate bullets that show no evidence of eventual success.⁵

Years later the successful cannonballs often seem to have come from nowhere as strokes of genius, but they weren’t. They were what remained when all the duds fell by the wayside:

"A 'fire bullets, then cannonballs' approach better explains the success of 10X companies than big-leap innovations and predictive genius…10Xers appear to have no better ability to predict impending change and events than the comparisons. They aren’t visionary geniuses; they’re empiricists."⁶

Collins shows that successful companies have no crystal ball. They have a pragmatic, even mundane approach: try everything; bet the farm on nothing until experience demonstrates what works. Then go all in, assuming risk not based on “dialogue,” vague “help from the planning staff” and hunches, but on empirical evidence.

Bullets Then Cannonballs, And So Much More

Bullets then cannonballs is not a unique example of strategy that works in Collins’ books. It is one of many equally relevant, specific, documented strategies that Collins has written about. Among them:

·         Level 5 Leadership – it’s not what you think it is

·         First Who…Then What – the right people are even more important than the right idea

·         Confronting the Brutal Facts – “death knells” are best dealt with head on

·         The Hedgehog Concept – it’s all about clarity, even simplistic clarity

·         The Flywheel vs the Doom Loop – extraordinary success may not be the result of an extraordinary product

·         The Tyranny of “Or” vs The Genius of “And” – a compulsory “this OR that” choice is often a misperception caused by lack of imagination

·         Preserving the Core and Stimulating Progress – knowing what should never change – while everything else must

·         The 20 Mile March – like Level 5 Leadership, disciplined consistency is not what you think

Collins’ Findings: Working Everywhere, Available to Everyone

The power of Collins’ method arises from identifying straightforward, evidence-supported concepts like “bullets, then cannonballs” that have worked across the full sweep of modern commerce. The industries represented in Good To Great alone are pharmaceuticals, retail electronics, financial services, personal care products, paper products, grocery stores, steel production, office equipment, drug stores and cigarettes. The same strategies work in steel production and finance. They work to create health in pharmaceuticals and cause harm in cigarette manufacturing.

The method doesn’t leave us wondering “will that work here?” Collins shows that business decision-making (and business writing) can be better than intuition and personality. His method has a built-in assurance of the relevance of its findings to all business…and to all of us.

¹   Collins’ major works are

Good to Great, examining companies that were merely okay, then greatly outperformed the market for at least 15 years.

Great by Choice, about companies that sustained performance for 30 years.

Built To Last, looking at companies that have existed for over 70 years, some going back to the 1800s.

How the Mighty Fall, disecting what happened to companies that had success and lost it, and what all the cases have in common.

²   Bossidy, Larry. Execution: The Discipline of Getting Things Done. Larry Bossidy and Ram Charan, Crown Business: Random House, Inc., 2002, pp 214-215

³   That both these companies have divested to the point of disappearing as major entities may indicate long-term costs of such diversity, but both were extremely successful for decades using the broad diversification strategy.

⁴   Collins, Jim. Great By Choice. Jim Collins and Morten T. Hansen, HarperCollins Publishers, 2011, p 81

⁵   Collins, p 83

⁶   Collins, pp 96-97

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