In Jim Collins’ latest book Great by Choice, he and colleague Morten Hansen used extensive research to identify companies whose financial performance bettered their competition by at least a factor of 10 over the study period. Identifying these organizations and their leaders as 10Xers, they then discovered three core beliefs that these organizations had in common. Their research also revealed some common principles these organizations practiced; principles that lead the companies to greatness in environments characterized by big forces and rapid shifts that leaders could not predict or control.
Take this one, which could come out of the latest “Pirates of the Caribbean” movie: Fire bullets, then cannonballs. Here is a summary of what Collins and Hansen said about this principle:
A “fire bullets, then cannonballs” approach better explains the success of 10X companies than big leap innovations and predictive genius. A bullet is a low-cost, low risk, and low distraction test or experiment. 10Xers use bullets to empirically validate what will actually work. Based on that empirical validation, they then concentrate their resources to fire a cannonball, enabling large returns from concentrated bets.
The 10X cases fired a significant number of bullets that never hit anything. They didn’t know ahead of time which bullets would hit or be successful. There are two types of cannonballs, calibrated and uncalibrated.
- A calibrated cannonball has confirmation based on actual experience – empirical validation – that a big bet will likely prove successful.
- An uncalibrated cannonball means placing a big bet without empirical validation.
Uncalibrated cannonballs can lead to calamity. The companies researched paid a huge price when big, disruptive events coincided with their firing uncalibrated cannonballs, leaving them exposed. 10Xers periodically made the mistake of firing an uncalibrated cannonball, but they tended to self-correct quickly. The comparison cases, in contrast, were more likely to try to fix their mistakes by firing yet another uncalibrated cannonball, compounding their problems.
Failure to fire cannonballs, once calibrated, leads to mediocre results. The idea is not to choose between bullets or cannonballs, but to fire bullets first, then fire cannonballs.
The difficult task is to marry relentless discipline with creativity, neither letting discipline inhibit creativity nor letting creativity erode discipline. This combination of creativity and discipline, translated into the ability to scale innovation with great consistency, better explains some of the greatest stories – from INtel to Southwest Airlines, from Amgen’s early years to Apple’s resurgence under Steve Jobs – than the mythology of big-hit, single-step breakthroughs.
The Leader’s Key Question
Which of the following behaviors do you most need to increase?
- Firing enough bullets
- Resisting the temptation to fire uncalibrated cannonballs
- Committing, by converting bullets into cannonballs once you have empirical validation
Ready – Aim – Fire!