Grow anyway! Extreme, unstable environment?

• Author: Heffes, E. Llen M.
• Position: GROWTH - Interview

Growing the company in a time of severe economic hardship and uncertainty may seem impossible. But, if anyone would know how to accomplish it, it's Jim Collins, author of the best-selling Good to Great, which remains on some bestseller lists, long after its 2001 publication.

Collins, along with Morten T. Hansen, a professor of management with the University of California, Berkeley School of Information, has recently released a new book, Great By Choice (Harper Business, 2011), on why certain companies thrive regardless of external uncertainty, chaos and extreme environments.

In it, they share results of a nine-year study of companies they call "l0Xers," indicating that these companies have beaten their industry indexes by a minimum of 10 times over 15 years--in environments characterized by "big forces and rapid shifts that leaders could not predict or control." The companies are in a variety of industries, and have all experienced unexpected shocks and disruptions of large magnitudes.

Financial Executive's Editor-in-Chief Ellen M. Heffes spoke with Collins about some of the concepts he and Hansen have developed and how readers can apply these to their own situations.

Best-selling author and researcher Jim Collins talks about characteristics of leading companies that have managed phenomenal growth, through good times and bad.

Heffes: What is different now than from other times?

Collins: Both Morten Hansen and I grew up in the second half of the 20th century, a time that was kind of artificially stable, an almost privileged time. How often in history do people come of age during an era of almost unprecedented, unbroken rising prosperity, with a few glitches, but basically an extraordinary run?

Those kinds of times don't come around often. Most of history--and what we believe will in all likelihood be around for the next 50 years or longer--is much more uncertain and chaotic and full of turbulent forces that are less forgiving. As a result, we're going to have to get used to operating with uncertainty, turbulent disruption and episodes of chaos as the normal state of affairs. We don't see that abating.

We also don't think it's bad--just like gravity, it is our reality. We don't wake up in the morning and say, "Boy it's really too bad today I have to deal with gravity." Uncertainty, chaos, disruption and shifting things under our feet, just like gravity, will be the kind of context in which we will be operating.

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Heffes: So what is now being characterized as "new normal" is really the normal.

Collins: Exactly--the abnormal was that wonderfully privileged time and the new normal is what has been historically normal, but just in a different form.

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Heffes: Discuss the characteristics of the companies you found that can weather...