Be Prepared

Columns From: 11/10/2011 Automotive Design & Production, , Editor-in-Chief from Gardner Business Media, Inc.

No one can control extraneous conditions —gas prices, currency exchanges, new market entrants. But anyone can control what they’ll do in the face of changes.


Back during the Troubles at Toyota, people seized upon a comment that company president Akio Toyoda had made during a presentation at the Japan National Press Club. He said that Toyota was “grasping for salvation.”
He was glossing How the Mighty Fall (2009) by Jim Collins. In that book, Collins details how many companies fail as a result of self-inflicted wounds. “Grasping for Salvation” is the penultimate stage of the process. The final stage is “Capitulation to Irrelevance or Death.” Yet Collins also says there is the possibility for redemption before complete failure. Like famous recovery programs, this takes a recognition and acknowledgement that things are going badly, which is essentially what Akio Toyoda was doing in his comments. The grasping was deliberate, not some sort of act like someone going down in quicksand.
Yet all-too-many companies choose not to recognize when they’re going down.
Jim Collins is the master of developing guides to behavior, guides that are invariably based on reams of data (or perhaps “gigabytes” might be a more appropriate descriptor), yet guides that while comprehensive and thoughtful, are simple enough to be written on a laminated wallet card. I remember that within a year of the appearance of Built to Last by Collins and Jerry Porras (1994) being handed such a card from an automotive supplier executive I was interviewing, a card that described the company’s BHAG—Big Hairy Audacious Goal.
Collins, this time assisted in the writing by Morten T. Hansen, and in research, per usual, by a cadre of evidently engaged individuals (the evidence being found in the appendices and comprehensive notes, which account for about a third of the entire 320-page text), is back with Great By Choice: Uncertainty, Chaos and Luck—Why Some Thrive Despite Them All (Harper Business).
And if I were to make a laminated card with the lessons from this book, one side would read “Be Prepared” and the other “Slow But Sure Wins the Race.”
Given that Collins is a lifelong mountain climber, the Boy Scout motto and the moral of an Aesop fable probably aren’t far from the mark. The book opens with a comparison between the outcomes of two adventurers, Roald Amundsen and Robert Falcon Scott, both of whom wanted to be the first to reach the South Pole. Amundsen succeeded. Scott froze to death. The difference: “Amundsen’s philosophy: You don’t wait until you’re in an unexpected storm to discover that you need more strength and endurance. You don’t wait until you’re shipwrecked to determine if you can eat raw dolphin. You don’t wait until you’re on the Antarctic journey to become a superb skier and dog handler. You prepare with intensity, all the time, so that when conditions turn against you, you can draw from a deep reservoir of strength. And equally, you prepare so that when conditions turn in your favor, you can strike hard.” They are prepared.
Stuff will happen. You can count on it. How companies deal with it is the key differentiator. In Great By Choice, companies that outperformed its industry’s index by at least 10 times during a period of at least 15 years ending in 2002, companies that exhibited “extreme performance in extreme environments” are examined. These companies, tagged “10Xers,” showed three core behaviors: fanatic discipline, empirical creativity and productive paranoia, all in the service of “Level 5 Ambition” (a drive beyond personal, individual success).
What these companies—or the leaders and people who make up these 10X firms—aren’t is telling: they’re not more creative, more visionary, more charismatic, more ambitious , more blessed by luck, more risk seeking, more heroic, more prone to making big, bold moves. They are more obsessed by figuring out what works, and then by executing over and over again until it is clear that there must be an adjustment of change. This is performed through an empirical approach, “relying upon direct observation, conducting practical experiments, and/or engaging directly with evidence rather than relying upon opinion, whim, conventional wisdom, authority, or untested ideas.” Steady and slow.
“The 10X winners in our research always assumed that conditions can—and often do—unexpectedly change, violently and fast . . . They understood, deeply: the only mistakes you can learn from are the ones you survive.”
Be prepared.