AS Jim Collins notes in the introduction to my new book, The Greatest Business Decisions of All Time, we’re living in times of tremendous uncertainty; many growth-company CEOs feel rudderless.
‘What is the key thing you can do about that uncertainty?’ Jim asked. ‘You can have the right people with you.’ And once you do, he notes, you have to make the right decisions.
Often, that means asking those great people you brought on board to guide you in areas outside of your core expertise. Jim’s research evidence shows unequivocally that leaders who create situations where extraordinary results could be achieved, and made a series of great decisions over time, were very comfortable saying ‘I don’t know.’
If there’s one thing every growth company must do to build and maintain a competitive edge in today’s fast-paced global economy, it’s making great decisions. Think about Apple’s decision to bring back Steve Jobs as CEO after he had departed for a decade—and brought the company back to glory; wasn’t this one of the greatest and most unlikely business decisions of all time?
Greatness equals many smart decisions
A truism of life is that success equals the sum total of all the decisions one makes. And as Jim suggests, it’s the combination of thousands of decisions that lead to greatness. Yet there seem to be a handful of decisions that stand apart from the rest. They are often those fateful ‘bet the farm’ moments, when a CEO can go left or right, or not go at all.
And the choices great leaders end up making are often counterintuitive and move companies, industries, and even nations in entirely new directions.
In the end, the 18 management decisions that made our final lists stood out because they were counterintuitive –they went against the grain of popular practice. Who was Andy Grove to think he could make a commodity computer chip a household name? Now we have Intel Inside. What executive in his right mind would give his employees time to daydream?; but that’s exactly what 3M CEO William McKnight did in 1948.
Many of these great decisions eventually unleashed a storm of imitation –Google now lets employees spend a chunk of their time on their own projects, 50 years after McKnight at 3M set the precedent. A few of these ideas, however, like Bill Gates’ decision to take a week off once or twice a year to read and think (a habit that helped Microsoft shift its strategy a number of times) remain largely uncopied. That doesn’t mean the Gates ‘think week’ approach might not be just the thing for some of today’s business leaders. In the end, all these great decisions have stood the test of time, having created tremendous value as well as lessons for running any business.
At first we attempted to organise the decisions into various buckets. It soon became clear that it didn’t make sense to stuff each decision into one of these convenient boxes. In the end we decided to let each stand on its own merit.
Here are my top five favourite business decisions of all time, in reverse order.
5) General Electric: Jack Welch’s decision to go all-in and fund Crotonville, a first-class training centre, set the tone for thousands of businesses to create corporate universities. That decision also helped develop a generation of leaders at GE who have gone on to run countless other companies.
4) Samsung: The decision by this South Korean electronics giant two decades ago to launch an unprecedented sabbatical program, placing star employees in far-flung places around the globe for a year, continues to drive Samsung’s prominence as a top 20 brand.
3) Wal-Mart: Sam Walton’s decision to launch a simple Saturday morning meeting, for all employees, in his first store has led to 50 years of rapid decision-making, creating one of the largest companies in the world.
2) Apple: The decision to bring back Steve Jobs as CEO of the company he founded, after a decade-long absence, resulted in ‘the best work of his life’ and the most valuable public company in the world.
1) Ford: Henry Ford’s decision to double the wages of his employees meant that workers were no longer viewed as drones, to be paid as cheaply as possible, but instead as valuable assets. In turn, workers could now afford the very products they were producing. That triggered a consumer revolution that would eventually help create the wealthiest nation on earth.
How do you learn from these legends to make your own great decisions? Jim offers one hint: Start debating your next moves with your team.
‘Decision-making is not about consensus,’ he says.
Verne Harnish is CEO of Gazelles Inc, an executive education and coaching solutions provider, and author of Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Fast-Growth Firm.