Great By Choice

Great By Choice analyzes what makes the world’s best companies thrive in even the most uncertain and chaotic times, by distilling nine years of research and great stories into three actionable principles.

Collins uses the story of the two most famous expeditions to the South Pole, both started simultaneously in 1910.

One not only reached the South Pole first but also returned home safe and sound, while the other, in addition to losing the race, never made it back.

What set Roald Amundsen‘s winning team apart, was mainly one single rule they obeyed during their journey: They would walk 20 miles every single day, no matter the weather conditions.

On bad days, they had to fight to reach those 20 miles. On good days, they had to hold themselves back to not go further.

But in doing this, they conserved their energy and could manage their resources a lot better and consistently make progress.

The competitors walked as far as they could, exerted all their energy and when critical conditions hit, had none left.

This story has sparked the now common notion of “The 20 Mile March”, which is exactly what great companies rely on, says Collins.

They set long-term goals, like a portfolio of 100 products, a certain growth rate per year, or testing 50 innovations, and then consistently take action on a day-to-day-basis to reach them.

That’s why habits are the route to success.

For example, writing this summary is my 20-mile march for today – after that, I have done my duty and can rest.

Yes, great companies are innovative, but not just for the sake of being innovative.

You don’t see Apple throwing new products on the market every other week, do you? There’s a reason for that.

Jim Collins calls it firing bullets first, then cannonballs.

Back in 2001, Apple released the first iPod, but it wasn’t the iPod you know today. It was a field test, and you can see that in the fact that it was only Mac-compatible.

Low risk, low cost, and it didn’t distract them too much from working on their computers. When Mac-users liked it, they shot another bullet at them: iTunes.

Giving users an option to download their music legally and cheaply directly to their iPod provided another piece of evidence.

Only when both test runs were successful did Apple open up and come out with iTunes and iPod for non-Mac computers a year later.

That’s evidence-based innovation and that’s what you should practice.

If you know the basics of investing, you know that ROI means Return On Investment. Every investor tries to maximize it, because the higher it gets, the more money you make per dollar invested. Jim…