Epilogue and Frequently Asked Questions

1. GREAT BY CHOICE Epilogue and Frequently Asked Questions Team 2: James Stariha Michael Mullin Michael Johnson Elizabeth Allen Joshua Zamarron

2. Epilogue

3. Epilogue • “One should…..be able to see that things are hopeless and yet be determined to make them otherwise” F. Scott Fitzgerald • View that greatness owes more to circumstance, even luck, than to action and discipline: that what happens to use matters more than what we do

4. Epilogue • A deeply debilitating life perspective • Do we really what to teach young people: • That our actions count for little • That those who create something great are merely lucky • That our circumstance imprisons us • Do we want to build a society and culture that encourage us to believe that we aren’t responsible for our choices and accountable for our performance

5. Epilogue • Research does not support this • Luck plays a role for everyone, both good luck and bad luck • One overarching message: • Greatness is not primarily a matter of circumstance; greatness is first and foremost a matter of conscious choice and discipline

6. Epilogue • Tested key concepts like the 10xer research study, to see if any of the concepts failed to apply in highly uncertain and chaotic environments • Found that the earlier concepts were holding up and they are confident that the concepts from all four studies increase the odds of building a great company • But do they guarantee success

7. Epilogue • Simply put NO • Nothing will ever guarantee success, we never stop learning and advancing concepts, life offers no guarantee’s • Always possible for game-ending event to occur • Still, we must act

8. Epilogue • What matters most is what we do when the moment comes and your afraid, exhausted, or tempted- what choice do we make? • Do we abandon our values and give in • Accept average performance • The greatest leaders care • As much about values as victory • As much about purpose as profit • As much about being useful as being successful • Their drive and standards are ultimately internal

9. Epilogue • It is important to remember • We are not imprisoned by our circumstances • We are not imprisoned by the luck we get or the inherent unfairness of life • We are not imprisoned by crushing setbacks, self-inflicted mistakes or our past success • We are not imprisoned by the times in which we live, by the number of hours in a day or even the number of hours we’re granted in our very short lives • In the end, we can control only a tiny sliver of what happens to us, but even so, we are free to choose, free to become great by choice

10. Frequently Asked Questions

11. Were any of the concepts from Good to Great, Built to Last, or How the Mighty Fall overturned by this research? • Systematically examined relationship of 10X cases and comparisons to prior work concepts. • 10X cases exemplified the prior concepts to a greater degree than comparison cases.

12. To what extent did the Level 5 leaders in Good to Great exhibit 10xer behaviors? • Level 5 leaders Vs. 10X leaders • Similar, less productive paranoia • Working environment less extreme • Level 5: Established companies • 10Xers: entrepreneurs and small business • Good to Great emphasis on humility, Great by Choice on will.

13. What role does the “First Who” principle play when when leading a company amidst uncertainty and chaos? • 10Xers: Getting the right people in the right seats. • David Breashears: Mount Everest • Southwest Airlines: Harvard • Progressive Insurance: Right people #1 strategic philosophy • Amgen: 57 of 58 • Intel: Robert Noyce (cofounder) assembled team before deciding what products to make. • 10X companies: cult-like cultures

14. Is there a relationship between the SMaC recipe and the Hedgehog Concept from Good to Great? • Hedgehog intersection of: • What are you passionate about? • What you can be the best in the world at? • What drives your resources or economic engine? • Consistent decisions with concept, turning the flywheel. • SMaC recipe for specific action and focused direction building flywheel momentum. • Southwest high level Hedgehog concept: be the best high-spirit, low-cost airline, steadily increasing profit-per-fuselage, with great passion for being an industry renegade.

16. Do you have any guidance for how to craft a SMaC recipe? • Go directly to the practical, the empirical, and when possible, the specific and concrete. • Southwest specify: “gate turns of 10 minutes” or “fly only 737s” • Intel concrete task: “Double the number of components every ten years” • What works and why? What to do and what not to do? Durable not whole sale revolution in response to changing conditions.

17. If the 10X concepts are universal, why didn’t they become starkly clear in Good to Great? • Poking holes and shining light into a black box • Good to Great focused on leap from mediocrity to great results • 15 years of mediocre performance to 15 years of exceptional performance. • Great by choice small or start-up companies that became great in uncertain, unforgiving, and chaotic environment • Complement each other not repeat.

18. If I’m not a full 10Xer, can I compensate by building a 10X team that has all the behaviors? • It’s better to focus on working as a team to implement key ideas as an entire enterprise • Commit to a 20 Mile March • Fire bullets, then fire calibrated cannonballs • Practice all elements of productive paranoia • Adhere and selectively amend a SMaC recipe • Become highly attuned to luck • Ask, “What are we going to do to get a high return on this luck (ROL)?” • If your team & enterprise succeed at all of these, it will matter less whether any single individual is a full-fledged 10Xer.

19. Does leading above the Death Line mean avoiding BHAGs (Big Hairy Audacious Goals)? • No • Roald Amundsen – South Pole • David Breashears – IMAX camera on Everest • 10X leaders in the research-study companies • The task is to pursue BHAGs and stay above the Death Line

20. How is the 10X concept “fire bullets, then cannonballs” different from the Built to Last concept “try a lot of stuff and keep what works”? • The 2 ideas overlap • Essentially trying a lot of stuff = firing bullets • But keeping what works is NOT the same thing as making a big bet to fully exploit what you’ve learned from firing a bullet. • That’s what cannonballs are for. 10Xers follow up successful bullets with cannonballs.

21. What are the implications for innovation-driven economies of your finding that 10X cases didn’t always out-innovate comparison companies? • Treating innovation alone as the silver bullet for achieving a competitive advantage would be naïve and unwise • 10X success requires: scale innovation with great consistency by blending creativity & discipline • Examples: Intel, Southwest, Microsoft, Amgen, etc.

22. You mention the “Genius of the AND” a few times in the text. What is it and how does it apply here? • In the Built to Last study they found leaders of enduring great companies are comfortable with paradox • Having the ability to embrace 2 opposing ideas in the mind at the same time. • “Genius of the AND” vs. “Tyranny of the OR” • “The test of a first-rate intelligence is the ability to hod two opposed ideas in the mind at the same time, and still retain the ability to function.” – F. Scott Fitzgerald

23. The Genius of the AND • Disciplined & Creative • Empirical validation & Bold Moves • Prudence & BHAGs • Ferociously ambitious & Not egocentric • Severe performance standards, no excuses & Never going too far, able to hold back • On a 20 Mile March & Fire bullets, then cannonballs • Threshold innovation & One fad behind • Cannot Predict the future & Prepare for what they cannot predict • Go slow when they can & Go fast when they must • Disciplined thought & Decisive action • Zoom out & Zoom in • Adhering to a SMaC recipe & Amending a SMaC recipe • Consistency & Change • Never count on luck & Get a high ROL when luck comes

24. How do you respond to critics of your research finding who point to the failings of previously great companies you’ve researched and written about? • Research is based on specific, dynastic eras of performance • Similar to studying the greatest sports dynasties in history • That some sports dynasties later cease to be dynasties would be irrelevant to the overall analysis of what it takes to build a great sports dynasty

25. Can this book help companies avoid the five stages of decline outlined in How the Mighty Fall? • The comparison cases in this study that fell from potential greatness all showed elements of stages 1 through 4 and some went all the way to stage 5. • The 10X companies concepts can be used to stay away from the stages of decline.

26. How did you two (Jim and Morten) begin your working partnership, and why did you do this research project as a team? • Met at Stanford Graduate School of Business in 1991 • Jim and his colleague professor Jerry Porras started Built to Last research project • Morton joined research team en route to receiving PhD • Always talked about doing a project from the ground up • Why do some thrive in the face of immense uncertainty, even chaos, and others do not? • 9/11 caused them to start their research

27. Do you see your book as about defining and thriving in a New Normal? • No, the premise behind this work is that instability is chronic, uncertainty is permanent, change is accelerating, disruption is common, and we can neither predict nor govern events • Only a continuous series of “not normal” times

28. How widely is the question underlying this study? Do you see it as universal? • Stop and think about your own situation or organization • On a scale of 1-10, rate the context in which you operate today • 1 means you face no big forces outside your control, everything is predictable, certain, and safe • 10 is just the opposite • Asked a room full of people this question to raise their hands • Yes, it is relevant to every industry and every social sector

29. Do you see the causes of chaos and uncertainty as primarily economic? • Not entirely • Economic drivers: • Increased global competition, volatile capital markets, and rapidly evolving business models • Sources of instability come from outside economics • Government regulation, government spending, unpredictable political risk, disruptive technologies, new media. • There will be entirely new disruptions and chaotic forces to come in the future.

30. Do you see this book as about the past or the future? • Studied the past which will benefit the future. • Examined companies that had achieved greatness in the most uncertain and chaotic industries whose principles should be applied to all companies dealing with uncertainty

31. My World Feels Fairly stable right now; does this apply to me? • Chapter 5 told us that what you do before the storm comes is what most determines how well you’ll do when the storm comes. • Improper planning and preparation for instability, disruption, and chaos in advance tends to lead to more suffering when the entity’s environment shifts from stability to turbulence

32. Do the 10X concepts apply as much to the social sectors as the Good to Great ideas? • While the author’s research was conducted, they worked with leaders from a wide range of social sectors, including: education, churches, nonprofit hospitals, etc.. • Just like business leaders, they face many of the same forces outside of their control such as high uncertainty, fast moving events, dangerous threats, and disruptive opportunites

33. Do you see this work as being primarily about navigating in times of austerity and crisis? • No. The book is not based on crisis management. Crisis management is only a subset of the overall condition of unrelenting instability and a high degree of uncertainty. • Explosive growth can as well be difficult to manage and navigate during times of uncertainty and instability • Exp: Apple: Many may argue that Apple’s explosive growth during this era and more recently after Steve Job’s Death may be the cause of their recent financial issues.

34. How did the 2008 financial meltdown affect your thinking for this study? • The financial meltdown only reinforced the relevance of the study question • Financial Crisis and disruption will come one after another in the future and they can non be predicted with certainty, the only thing that is known is they will come.

35. Are you more or less optimistic and hopeful after conducting this study? • The study shows reason for optimism and hope • Our actions are the cause for either our success or our failure, not what the world does to us • This is very important and relates not only to our company Amgen, but to all of our companies. Just because our companies may have made mistakes, these mistakes may be overcome to build greatness through our own actions

36. Thank You, Any Questions?