I have always liked the books from Jim Collins. He makes good arguments for what are requirements necessary to make great firms. I know that others have studied the companies featured in his work and that performance ex-post has not always been kind, but the deep analysis he conducts is always food for thought.
In Great by Choice, Collins again compares pairs of companies to show what good, or in this case, 10x firms, do to be successful. His arguments for the successful companies are simple:
- Be disciplined and consistent - follow the "20 Mile March". Do not chase growth or every dream.
- "Fire bullets, then Cannonballs". Tests small ideas and then determine when to go all in.
- "Lead above the death line". Make sure you plan for the worst case and ensure you have a high margin of safety.
- "Use the SMaC recipe". Have a plan that is Specific, Methodical, and Consistent; a plan that is clear and detailed and can work in any environment.
Luck is important but great companies know how to use the good luck given and survive bad luck.
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