Great By Choice Chapter 6: SMaC

1. Great By ChoiceChapter 6: SMaC Jacob Felty Sabrea Hebb Alexandra Hill Shaady Ibrahim Callie Myers Colby Wulf

2. SMaC • Specific, Methodical, and Consistent • As the uncertainty, fast-changing, and unforgiving nature of your environment changes, the more SMaC is necessary

3. SMaC Recipe Set of durable operating practices, create a replicable and consistent success formula Clear and concrete, allows enterprise to unify and organize its efforts Clear guidance for what to do and what not to do Reflects empirical validation and insight

4. Adhering to the SMaC Recipe with Fanatic Discipline • Progressive Insurance SMaC Recipe • Contrast in the comparison cases • 117 elements • Changed their recipes to a greater degree

5. Southwest Airlines • Recall Chapter 4 • Deregulation • Identical recipes • PSA vs. Southwest • Figuring out what works • Understanding why it works • Grasping when to change • Knowing when not to

6. Apple • The value of a recipe • Chronic inconsistency • Positioning • Apple vs. Microsoft • Revolutionizing Apple

7. UCLA • John Wooden  UCLA Basketball coach • “Pyramid of Success” • Starts with how to tie your shoes

8. “The signature of mediocrity is not an unwillingness to change; the signature of mediocrity is chronic inconsistency.”-- Jim Collins, Great By Choice

9. Amending the SMaC Recipe • 1985 - Intel realized their DRAMS business was untenable • Japanese competitors drove prices down 80% • Spent 16 years of ‘bullets’, building momentum into microprocessors • Executives ‘zoomed out’ and realized they had to get out of DRAMS • Changed just one aspect of their recipe; kept the rest unchanged • Upheld Moore’s Law, R&D, etc • Good 10X company

10. How Not to Amend a SMaC Recipe • AMD supplied chips for military • Jerry Sanders decided an entire new recipe based on “Asparagus” • High-cost R&D, high prices • Changed their SMaC Recipe 3 more times after that • Went to old strategy and ‘some’ asparagus • Then to “P3 Strategy” (platforms, process, production) • Ended with “customer-centric innovation” • Never

11. How to Amend a SMaC Recipe • Microsoft used both empirical creativity and productive paranoia • Started with stand-alone personal computer business • James J. Allard “sounded an alarm” over the rise of the Inernet • Bill Gates already had annual ‘Think Week’ • Used it to reflect on the Internet, sent memo • Made 180-degree change overnight • But did not abandon normal business focus on software, applications, etc. • Microsoft made a dramatic change but still was a 10Xer

12. Consistency and Change Amendment mechanism: allowed for the Constitution to evolve as America evolved High hurdles for change, making it stable Constitution only amended 17 times between 1791 and 2011 All human enterprises require a specific recipe for consistency and change

13. Consistency and Change It is important to BE the change and not just react to it Move forward while figuring out what works

14. Coca Cola • SMaC = Specific, Methodical, and Consistent • Coca Cola Strategy • SMaC recipe = durable operating practices (consistent success formula) • implement their “think local, act local” philosophy

15. Coca Cola • Three Required Behaviors for 10X Success (Amending): • Empirical creativity (internally driven; develop/evolve) • fanatic discipline (sticking to the plan) • productive paranoia (external focus) • WWII: Sole sponsor of beverages for US troops • 1990’s: Introduced non-carbonated beverages • 1996: Hosted the 96’ Summer Olympics

16. Discussion Questions Does Coca Cola in your opinion adhere to the SMaC concept, why or why not? What are some companies that have not effectively used SMaC?