According to renowned management thinker Jim Collins, the factors of a company’s success can be distilled to the three core traits of a great leader.
In his book, Great by Choice, Collins and co-author Morten Hansen unpack nine years of research, having studied four companies that rose to greatness in difficult times against a carefully selected set of comparison companies that failed in similarly extreme environments.
The key differentiator has nothing to do with a leader’s personality.
“The x-factor of great leadership is humility,” says Collins.
When humility is combined with ambition, it can be channeled into a cause that is bigger and more important than the individual.
Here are the three core behaviours that Collins observed in leaders of the companies that successfully weathered difficult times:
1. Fanatic discipline. Successful leaders continue at the same pace in all conditions. They set a goal in any area, and meet that goal without exception. This is a method that Collins referred to as the 20-mile mark, referencing a story of an early Arctic explorer who reached his goal by travelling 20 miles every day, no matter how harsh the weather.
In other words, don’t wait for conditions to improve and plan to make up the loss later.
Commit to achieving the same consistent results no matter what. “We see tremendous consistency in any truly great enterprise, while the signature of mediocrity is chronic inconsistency,” adds Collins.
2. Empirical creativity. Discipline alone is not enough to be successful, but neither is creativity. Collins argues we are all creative thinkers as children but discipline must be learnt and practiced. The successful companies were not more innovative; their success was largely due to the way they were innovative.
For example, the more successful biotech company won 30 to 1 in financial returns despite being less innovative (based on the number of patents issued).
Collins asserts that pioneer innovation is great for society, but not always for business. The goal isn’t to stop innovating, but to do it in a more disciplined manner and test your innovations, or as he quotes the billionaire owner of a medical-supply company, John Stryker: “We strive to be one fad behind.”
3. Productive paranoia. Collins categorises successful leaders as ‘paranoid, neurotic freaks.’ They are always preparing for when, not if, the next big disruption is going to happen. They may be preparing for the worst – one company he studied prided itself on predicting the majority of the recessions in the past several decades – but their pessimism pays off.
Business Lessons From 4 Leaders Who Got It Right. Read them here.