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On this episode of Dare to Lead
This episode is a two-hour, deep-dive conversation with Jim Collins on his work and how it shaped who I am as a person, as a leader, and as a researcher. We talk about our values, our shadow values, the power of curiosity, decades of grounded theory research and comparative analysis, and how he explains thirty years of research with one integrated framework called The Map. Jim’s books, including his new one, Beyond Entrepreneurship 2.0, have captured the hearts and minds of his readers and changed how we think about building and leading organizations.
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BE 2.0 (Beyond Entrepreneurship 2.0): Turning Your Business into an Enduring Great Company by Jim Collins and Bill Lazier
From Jim Collins, the most influential business thinker of our era, comes an ambitious upgrade of his classic, Beyond Entrepreneurship, that includes all-new findings and world-changing insights. BE 2.0 is a new and improved version of the book that Jim Collins and Bill Lazier wrote years ago. In BE 2.0, Jim Collins honors his mentor, Bill Lazier, who passed away in 2005, and reexamines the original text of Beyond Entrepreneurship with his 2020 perspective. BE 2.0 pulls together the key concepts across Collins’ thirty years of research into one integrated framework called The Map. The result is a singular reading experience, which presents a unified vision of company creation that will fascinate not only Jim’s millions of dedicated readers worldwide, but also introduce a new generation to his remarkable work.
Brené Brown: Hi, everyone. I’m Brené Brown, and this is the Dare to Lead Podcast. I am so excited to share this conversation with you. This is a deep dive conversation with Jim Collins about his work, how it has absolutely shaped who I am as a person, as a leader, as a researcher. It has shaped my organization. So you get to hear me really ask all the questions that I’ve been saving up for probably over a decade. We talk about our values, our shadow values, which was an interesting question that Jim had for me, the power of curiosity, decades of grounded theory research on both of our parts, and we talk about the map, which is an integrated framework of 30 years of his research. We also talk about some of the amazing parables and stories and metaphors that have just captured the hearts and minds of his readers and really changed how we think about building organizations. The Hedgehog, the Flywheel, Level 5 Leadership. And this is a deep dive. This is one of our really long podcasts that you may have to listen to in chunks or… I really enjoy long conversations, so sometimes I just find myself walking really far. We’re going to talk about all of his books from Good to Great and Built to Last, to his new work, which is Beyond Entrepreneurship 2.0, an update to the original book.
BB: The influence of his work on my life is hard to quantify, but I can tell you for sure he’s the reason you’re listening to me hosting a podcast right now. So before we get into the podcast, let me tell you a little bit about Jim, and then I want to tell you about some of the things we’re going to talk about today, because we talk about terms very quickly, and I want to make sure that everyone listening knows what the terms are before we get started. So let me tell you about Jim first. He is a student and a teacher of what makes companies tick, and a Socratic advisor to leaders in the business and social sectors. Having invested more than a quarter of a century in rigorous research, he has authored or co-authored a series of books that have sold, in total, more than 10 million copies worldwide. Let me just tell you, as a writer, you can’t even imagine what rarefied air that is. His books include Good to Great, which is the number one best seller. It examines why some companies make the leap and others don’t. Built to Last, which discovers why some companies remain visionary for generations. How the Mighty Fall, which delves into how once-great companies can self-destruct. Great by Choice, which uncovers the leadership behaviors for thriving in chaos and uncertainty. Note to self: 2020. And his newest publication is BE 2.0, Beyond Entrepreneurship 2.0.
BB: And in it, it returns Jim to his original focus on small entrepreneurial companies and really honors his co-author and mentor, the late Bill Lazier. I can’t wait for you to hear the conversation. So before we start… We go quickly, we just drop into some concepts that I know like the back of my hand because I’ve read about them, I’ve incorporated them, I’m living them, I’ve embedded them, but I want you to know about them before we start. So first, as you can see from the asset on social media, we talk about the Hedgehog. And let me just tell you, I have a hedgehog key chain, we have a hedgehog cookie jar at work. Jim explains the Hedgehog in several of his books. I came across it first in Good to Great. And let me tell you how he writes about it in the new book, in BE 2.0. He writes, “An ancient Greek parable says that the fox knows many things, but the hedgehog knows one big thing.” In Good to Great, he talks about how the fox tries to attack and kill the hedgehog. It’s cunning, it knows five or six different paths to take, it leaps, it crawls, it slithers, it jumps out of a tree. And all the hedgehog knows how to do is one thing: Roll up in a ball. But yet that one thing keeps the fox from accomplishing its goal every time.
BB: Jim writes, “Drawing upon this parable, philosopher Isaiah Berlin famously divided the world into two types of thinkers: Foxes and hedgehogs. Foxes embrace the inherent complexity of the world and pursue many ideas, never giving themselves over to a single pursuit or organizing idea. Hedgehogs, in contrast, gravitate towards simplicity, and think in terms of a single organizing idea that guides everything.” Jim continues, “Our research found that those who build great companies tend to be more hedgehog than fox. We also found that they implicitly or explicitly use a Hedgehog concept for disciplined decision-making. A Hedgehog concept is a simple concept that flows from deeply understanding the intersection of the following three circles.” So think about these three circles as a Venn diagram. “One, what are you deeply passionate about? Two, what can you be best at in the whole world? And three, what drives your economic engine the best?” So for me, when I say, “Oh, what’s my hedgehog?,” when we were thinking about doing a podcast, I was like, “Is the podcast a hedgehog for us? Are we super passionate about it? Can we do it better than anyone? At least in the area where I want to talk about, which is my work. And does it drive an economic engine?” And so the hedgehog became the litmus test for everything.
BB: Another concept that we talk about is called the Flywheel, and here’s how Jim writes about it, and he writes about it in Beyond Entrepreneurship 2.0, and he also writes about it in Chapter Eight of Good to Great. Jim writes, “Our research showed that no matter how dramatic the end result, building a great enterprise never happens in one fell swoop. There’s no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough and beyond. Pushing with great effort, you get the flywheel to inch forward. You keep pushing and you get the flywheel to complete one entire turn. You don’t stop, you keep pushing. The flywheel moves a bit faster; two turns, four turns, eight. The flywheel builds momentum; 16, 32. Moving faster; 1,000, 10,000, 100,000. Then at some point, breakthrough. The flywheel flies forward with almost unstoppable momentum. Once you fully grasp how to create flywheel momentum in your particular circumstance and apply that understanding with creativity and discipline, you get the power of strategic compounding. Each turn builds upon previous work as you make a series of good decisions supremely well executed that compound one upon the other.”
BB: So that’s when we talk about the Flywheel in this podcast, that’s what we’re talking about. The last thing I want to just give you a brief primer on is we mention this term, “Level 5 Leadership”. And Jim has created a leadership hierarchy where level one is a highly capable individual, level two is a contributing team member, level three is a competent manager, level four is an effective leader, and level five is an executive who builds enduring greatness through a paradoxical blend of personal humility and professional will. So you’ll hear these terms that we talk about. I just wanted to share them with you. And you can dig into any of these either on his website, he has great like small white papers and an analysis of them. You can dig into them in BE 2.0, which is just… This book that we’re talking about, Beyond Entrepreneurship, Reed Hastings, the founder and CEO of Netflix reads it once a year, every year, just to stay aligned. So here it is, my conversation with Jim Collins. Enjoy.
BB: I just have to start here, Jim, I have to start with thank you. And I’m going to tell you why. I’m a very curious person, I love learning. I don’t think I’ve ever read a book that has not changed something in me, changed the way that I show up, or the way I feel or think about something. I can’t actually think of a book that hasn’t changed me in some way, even books that I don’t like or disagree with. But there’s a very small handful of books that didn’t change me, but shaped who I am today, and you are one of those people. I feel like if I do one of those at-home genealogy tests, you would show up in my DNA along with bell hooks, Marcus Borg, the spiritual writer, and probably the AA Big Book. You have shaped me in a very fundamental way, so I really have to start with a deep thank you.
Jim Collins: Well, I take that in, I really appreciate that. And as you know, since you are a deep researcher and really go deep into doing your work, you never know where your work is going to lead, and that it reaches people that you never know that it’s reached them. That’s the power of words, the power of idea, and I really appreciate that. I always believe that the currency of a teacher is really measured in the wonderful, wonderful students of whatever it is that you have to teach. So that’s a wonderful start. I appreciate that very much. Might, if it’s all right with you, I begin our conversation by turning the tables a little bit and engaging you with some of my curiosity.
BB: I think so, yes. [laughter] Yeah, let’s do it.
JC: One of the things I kind of spent a lot of, basically the last week just living with you and your voice, your ideas wrapped around my brain, and one of the things that I am very curious about is, can you identify the moment when you discovered vulnerability as the theme of your life’s work? And I ask the question for curiosity, but also as I’m doing new research now looking at the entire arc of people’s lives, which we may touch on at the end. One of the things I find is that there’s a very lucky few of us who early in our lives, we discover a life theme. And then life is basically, until we run out of breath, variations on a theme. And it strikes me, you found yours, and I’m curious if you know the moment when you realized that you had discovered that theme.
BB: I do know the moment, it’s a really hard moment in my life actually. I was at my mom’s house shortly after a terrible trauma in our family, where her only sibling, her younger brother, had been shot and killed. And my mom is just this incredibly strong, really raised us to be both tough and tender, to look pain in the eye. We were always the first family in with the casserole, we were always front row at the funeral. And my mom used to always say, “Don’t look away from other people’s pain because one day you’ll be in pain and you’ll want people to be able to look you in the eye so you know you’re not alone.” She came from a hard life. And so when my uncle was killed and I was at her house one day, it was one of the very few times I had seen her really sobbing. And I’m the oldest of four and everything that comes with that, and so I said, “I just don’t know what to do. I don’t know what to say. I don’t know what to do for you. I’ve never seen you… I’ve never seen you weak before.” And she wasn’t angry in her response, but she was very fortified and she came back and said, “This is not weakness, Brené. If I was a weak person, I’d be dead. This is vulnerability, and this is part of my strength, but this is vulnerability.” And everything that she was saying sounded very paradoxical to me and very confusing, but that was definitely the moment where I thought, “Yeah, I can never let this go until I figure this out.”
JC: And how old were you?
BB: Maybe 20… 25 or 26?
JC: Oh wow, yeah, okay. And so the seed got activated at that moment and then just gestated and continues now to push itself up above ground.
BB: Yeah, I think that’s right. And I think it was a combination of that and… The timeline’s fuzzy to me, but I either right then or right before was also working in residential treatment when I was getting my bachelor’s degree in social work. And that’s where I learned about the word shame. And so I think those two things together. We had had a young girl try to run away, and when that happens in a treatment facility where people are living, these are kids whose parental rights have been terminated, it goes on lock down, it’s just this terrible thing. And I remember the staff started acting kind of strange with the kids, and they pulled us into this emergency meeting and said, “We know you’re afraid, and we know for some of you who have not been through this before, it’s really scary, but you need to watch how you’re speaking to the kids. You cannot shame or belittle people into changing who they are.” And so I think it was just this culmination of challenges to feelings that I thought I understood.
JC: And kind of a related thing that began to ignite my curiosity as I was engaging with your work and your ideas and where it came from… So you and I are both Grounded Theory researchers, we are both deeply connected to an ongoing research process and love the discovery. And I think one of the reasons I love Grounded Theory is that it’s about hypothesis forming, it’s about discovery as opposed to proving. And so, we both share that. There’s an extra step though, and a lot of people do research, but I always look for what I think of somebody’s peculiar genius, I think of it as, a peculiar proclivity that is their spark of genius. And I would suggest that yours, the way it appears to me, is the ability to go from research to tools. That I was struck, in reading and learning, your capacity to translate research into tools, many tools. Tools, processes, methods, right? And you seem to do that, it’s almost facile, it’s almost like breathing. But I’m curious, how does that happen? What’s kind of the technique and the artistry of going from research to tool for you?
BB: [chuckle] I’m laughing, because that’s one of the questions I have for you. I see how this is going. Let me see if I can explain my process to you, but then will you talk about yours too? Because one of the things that I think has really moved me about your books is I know what to do when I am done reading. And so I think for me… No one ever asked me this question, so I have to think about how to articulate it. I think I reverse engineer what I learn. So I say to myself, “Okay, wow, this group of leaders has a tremendous capacity for transformation. They are transformational in their leadership. And they all talk about values, but that doesn’t help me help anybody.” And so then I start asking more questions.
BB: Then what I learn is just by asking them, I don’t say, “Jim, you’re a transformational leader, how do I teach people what you have?” Because a lot of times, as you know, Grounded Theory happens outside the awareness of the people who… The research participants who read my work, which is one way we validate it, are like, “Oh my God, that’s exactly right. I didn’t know that had a name.” And so what I will say is, “Okay, Jim, you seem to really talk a lot about the importance of your values. What are your values? How did you arrive at those? Oh, you only have one. Oh, you only have two. Why don’t you have 20? Are there not 20 things that are important to you?” And then I reverse engineer into finding out, “Oh, okay, so what we need to do with a group of people is help them identify one or two values out of a list of 100.” Because they have to pick the values where all the other behaviors and values are forged. There are… The people who are really doing this work and living into their values, do not have 20. It’s not like a Hallmark store. And so I think I’m constantly reverse engineering the questioning to get to, “How did you do this?”
JC: I’ll be happy to share my process of what I call Chaos to Concept here in a minute, but you provoked another spark of curiosity within me, and maybe we could just riff on it for a minute and then I’m happy to be shaped by your questions. You were talking about the values. And one of the things that is interesting, because I’m a very audio person, as we mentioned earlier as you and I were chatting, I was listening to Dare to Lead while I was driving and looking at Haystack Mountain here in North Boulder. One of the reasons I like audio books is because I like to be able to connect ideas to physically where I was when I heard that idea, which is how I remember them. So I will always associate these select two values with looking at Haystack Mountain on a beautiful December afternoon. So I started thinking about my two values. And when I worked with companies back when I used to challenge them on this stuff, one of the ways that I would always come at the values question is to say, “Suppose some researchers from another planet arrived and all they did was observe your actual behavior for a year chronically, like studying some sort of strange species. And then based upon your behaviors, they had to say these are the essential values, because behaviors would reflect the values in reality.”
JC: So as I was thinking about that, I thought to myself, “Okay, so what would I say my two, if I had to strip down to two?” And it’s quite clear to me what those two were. They are curiosity and relationships. I think anybody who knows me really well would not be cynical about those two. But then I started thinking of that question of like somebody observing you like a bug, right? What does the person value? And something struck me, which is that I think I have what I would call a shadow value. And a shadow value is one that if you really looked at your behavior and you were simply trying to impute the values based upon your behavior, there might also be a shadow value that you might not normally articulate, but it actually really is there. And for me, that shadow value, if I were to say there is one, is it’s a deep desire to have freedom in how I use my time. And if I look at a lot of the decisions I’ve made, the things I’ve chosen to do, to not do, how I’ve shaped my life, a lot of them have been guided by a real need to have creative freedom in how I use my time. So I was like, “Now, that’s interesting.” So it’s kind of like I had my two primaries, and then there was this shadow one that’s pretty strong. So my question for you on that is, do you think that the idea that there’s a shadow value has any merit? I’m only a data point of one. And do you think it’s fruitful to know what it is if you do?
BB: Oh my God, I could just geek out with you for days. This is the first seven-day podcast in history. I could really talk to you about this forever because what I’m wondering, I’m curious about, do you think we’ve hit on the difference between lived values and aspirational values?
JC: Well, it’s interesting because one of the constructs when we look in organizations, and you know people better than I do, I know organizations very deeply from my research. One of the things that Jerry Porras and I identified way back in Built to Last, is that any organization or institution keeps itself alive and vibrant by this dynamic of preserve the core and stimulate progress. And in the core are the values, and in the stimulate progress is change, improvement, innovation, renewal and so forth. But one of the key, key insights that Jerry really got us to see through our research in Built to Last is that people get confused on the difference between core values and practices, and that we have a lot of practices, and people often think the practices are the value. So you and I both know the academic world, there are people who might think academic tenure is a value. It’s not. It’s a sacred practice, but it’s not a value. The value is intellectual freedom of inquiry. And if at some point tenure were antithetical to that value, then we ought to be able to change the practice no matter how sacred it is in order to better protect the actual value. So separate the practices from the values.
JC: With this, I’m not sure that actually it sort of falls into that construct when I just think about my own case because I actually think that what we really value… I’ll just speak for myself. I can’t speak for thousands of people like you can. But when I really think about it, I have to really try to be honest with myself about, what is my actual behavior? If somebody chronicled all my decisions and why I made them, all my actions and why I did them in a really clinical objective way, and you can just look at the information, I’m highly confident that curiosity and relationships would be absolutely validated.
JC: I just kept thinking, “But you know, boy, there’s this other thing that just… I never wrote it on my own list of values, but it really does drive a lot of my decisions, or so many things I have chosen in my life to preserve that freedom of inquiry.” Now, it could tie back to curiosity, because what I really love is a freedom to explore what I’m interested in, what questions grab me around the throat and say, “I will not let go until you answer me,” which is kind of the driving force. So anyways, that was kind of my thought on that. And we could just sort of play with it. I’m happy to go wherever you would like to go, and if we have time, I have other questions, but they may weave in. It’s such a great chance for me to learn by our conversation. So I’m sure this will have a little bit of back and forth. Where would you love to go? What would you love to be curious about?
BB: No, I’m stuck on this now. This is fascinating to me, because let me tell you my N of 1 for me. So my two values are courage and faith.
JC: Yep. Do you mean faith in sort of a Stockdale Paradox kind of faith? Or do you mean faith…
JC: Okay, got it.
BB: As opposed to what other kind of faith? I mean as in believing in something I can’t see, believing in something greater than us, believing in the inextricable connection between human beings that can’t be seen, but is felt. Like that’s for me. And for me… Just more concretely for me, it’s God. Not for everybody, but for me. So I would say my shadow value… And it’s interesting because that’s a very Jungian way of looking at things, right? What’s the shadow? If I were observed by these aliens, here’s what I think the report would say about me, “Her values are courage and faith, which she is constantly having to deploy against her fear of losing control.” And so I would say my shadow value is control driven by fear probably, I guess. And so it’s just an interesting relationship to me around my values, what I hold to be the most important things about me, and the things I have to live into in order to be the person I want to be definitely are faith and courage. And it’s interesting because curiosity is the one that I’m always fighting about there, but I think a lot of times curiosity for me requires both courage and faith, and so I keep coming back to those. But the shadow value, the alien observation, is a really interesting question because I think I almost have to lean into my values to conquer what people would observe, which is control. Does that make sense to you?
JC: It does. What’s interesting about it is I could have also framed the thing about freedom to use my time as control of my time, right? In that sense, it’s a very similar one of I don’t want a lot of extraneous claims on my time, control of where I am or what I do, or what questions I pursue. So I can actually very much identify with that. And I also identify with something that you mentioned in… I can’t remember whether it was in one of the podcasts I listened to or whether it was in the book, it might have been in both. But this notion of there’s always this lurking fear that, “Well, in the end, it’s all going to go away anyway.” That sort of sense of the silent creep of impending doom. [laughter]
BB: Yeah, the foreboding, right, yeah.
JC: Exactly. It’s like this sort of dominant emotion of background dread. [laughter]
JC: Which I can laugh about, but doesn’t necessarily mean it’s not there. [chuckle]
BB: No. And so for me, with the time and the control, that really requires… I’ll just give you a concrete example. “Brené, can you do this for this non-profit?” And this is like, this is a domestic violence non-profit or something I really care about and have a long history of supporting. And I can’t because I’m doing this research that I really love, that I’m not honoring enough with my time. And so in that moment, if you were an alien watching me, you’d be like, “Man, she is freaking out about this pull, and the only way I get to know is through prayerful reflection that I’m allowed to say no and that doesn’t make me a selfish person, and then the actual courage to say, “I’m grateful that you asked, please ask again. It’s not going to work this year.” Let me ask you, just kind of riffing off this, do you have… And we do this in the work around values that we do from Dare to Lead, we talk about an indicator light that tells you you’re outside of your values. Do you have an indicator? What is your indicator light around, “Oh man, okay, Jim, you’re out of alignment here”? Do you have that?
JC: Well, I actually have a couple of things. I sort of think of it as warning tracks, guard rails, things that let you know if you’re veering out of the lane. But I’ve also got other things which I sort of describe as very proactive mechanisms for keeping me in the lane. So for example, maybe I’ll just chat about each of them for the moment, one for keeping myself in the lane, which I actually have installed a fair number of personal mechanisms for doing that. And when I was leaving Stanford and heading out on my own to, like you, be an entrepreneurial professor as opposed to a professor of Entrepreneurship, and I was worried, I was actually quite worried, that what would happen is that I would end up with so many claims on my time, but also wonderful opportunities that seven or eight or 10 years down the road, I would have not really pursued anything of great curiosity.
JC: I would have simply talked about or taught or whatever the work that I’ve previously done. And one of the things that I always wanted to do was to say, “You’ve got to go back to the well of really fundamental questions and work on them.” And I don’t know if you will relate to this, but I found this very interesting period of time before Built to Last was published, which is the double-edged sword of being unknown and anonymous. Now, the unknown and anonymous is, “Well, maybe nobody will ever read what you write,” and that’s distressing. But the other side is, there’s the bliss of the fact that nobody calls you.
BB: [chuckle] Yes, yes.
JC: Nobody’s asking you to do… You don’t have to spend time thinking, “How do I say no and preserve the relationship?,” because nobody’s asking you to say yes. So you can just work. And so when I was coming out of Stanford, I thought, “I really don’t want to lose the allegiance to the creative curious work.” And so I asked a number of professors who I admire, “How do professors you admire spend their time and remain really productive?” And I got this answer back, “50-30-20.” 50% of their time in new intellectual, creative, curiosity-driven work; 30% of their time in teaching; and 20% in just other stuff that needs to be done. And so I thought, “That sounds good.” So my first cut at that was to buy a stopwatch that had three counters on it, and I literally would switch through the day, whether I’m in creative mode, curiosity mode or teaching mode or in other mode, and I’d tabulate them up. And then that became cumbersome, I was trying to track it. And then finally I just simplified it down, and I keep a spreadsheet that I use every single day, I’ve done it for years now. And I open this spreadsheet at the end of every single day, and I put in that spreadsheet three things. The first thing I put down is the number of creative hours I got that day, so anything that’s driven by curiosity. Part of this conversation will count as creative hours because there are insights and creative things that are happening in my brain by virtue of our conversation.
BB: For sure. For me, too.
JC: So there are creative hours and that gets tabulated. The second thing that goes in is what happened during the day, a basic accounting of like, “These are the things that composed the day.” And the third is a score of how the day felt, totally subjective emotional. +2, +1, 0, -1, -2. And the reason I track that is because if you’re in a string of -2’s, it can feel like that defines your life, but if you have the data that, “No, actually, at the end of every day for the last two years, I’ve tracked this and the truth is that even if you have four or five -2’s in a row, I always come out of them.” The data shows it. This doesn’t define your life. And then I can begin to run correlations, what I call happiness correlations, between what’s happening in the days and what correlates with +2’s, what correlates with -2’s, so on and so forth. Now, the creative hours, I have a rule; I have to stay above 1,000 creative hours because it calculates about over the last 365 days, above a 1,000 creative hours every 365 day cycle.
JC: So what is today? December 3rd to December 3rd last year, June 15 to June 15 the year before. Every 365-day cycle, every single day, 365 days a year for 50 years has to be above 1,000 creative hours. I calculate it every single day. And so that is my way of saying, “I want to stay true to the curiosity, to the creativity, to that work, so I actually measure it day upon day upon day.” Now, I can have a zero day, that’s fine. But so long as the net is above 1,000, and that keeps my eyes on the road of around that really core, core driving value of stay true to the curiosity, and the learning, and the research, and the thinking. On the side of relationships, we have a thing here we call the Prime Directive, I guess picking up off of “Star Trek,” but the idea of the Prime Directive is anybody who approaches us, and as probably with you, the vast majority, have to get what we call a gracious decline, a no. We say no, but I always felt that the height of arrogance is to become successful and then act like it, and to not be grateful for the wonderful things that people would like to have you do. And you don’t want to hurt relationships, you want to build relationships.
BB: That’s right.
JC: We have a very clear mechanism here we call the Prime Directive, which is that… And you can’t really measure this, but you can certainly know if you got it wrong, or you might know if you got it wrong. No matter what answer somebody gets, and for most people it’s a no, they have to come away from the interaction with us and our team feeling a closer sense of connection to us and the work and the ideas, no matter what answer they get. And that is to us is, it doesn’t matter whether it’s a teacher with 15 students in a small school in South Carolina, or whether it’s the CEO of a Fortune 10 company, it’s relationships. And nothing is a transaction, everything has to go back to the idea that they walk away feeling better about having approached us than before they approached us. And we talk about it all the time, “How do we achieve the Prime Directive?” And then on the guardrail side, there’s… Obviously, if I’m starting to see those creative hours drop, then I know I’m starting to veer from really the central guidance of how I should be deploying myself. But the other is on relationships and the other values. I married really well, and Joanne and I just had our 40th Thanksgiving together.
BB: Congratulations, that’s a big deal.
JC: We got engaged four days after our first date. The person I most want to like and respect me in this world is Joanne, and Joanne is unbelievably perceptive and honest and fierce. And if I’m straying, I will hear about it. And your spouse knows you like no one else. Your spouse is the one who will know… If you are not living to your values, your spouse is going to know more than anyone else in the world. And so for me, if Joanne respects me and Joanne likes me… She will love me, but I want her to respect me and to like me ever more as the years go on. That’s the ultimate sign. And it’s the people in my life, those people like Bill Lazier, who we’ll probably talk about. It’s people like Jim Stockdale that I looked to, but it’s first and foremost, Joanne. And the one person I would never, ever want to let down is Joanne.
BB: I’m really… Man, I’m taking it all in because I think that is so true about our partners knowing the most. They are a brutal barometer. They know. There’s no hiding it, I don’t think. Have there been times in your career where Joanne has had to say to you, “Jim, too much. We can’t… This is not working”?
JC: One of the most marvelous things about a great life partner is they’re always giving guidance, input. Sometimes it could just be that I have to be reminded to make sure to close the cupboard doors because that’s what she reminds me, as the absent-minded professor. But there have been any number of times, or like even remaining true, because I value excellence for its own sake. And I remember I was working desperately on a chapter back when I was writing Great by Choice and with Morten Hansen, a dear friend and a great colleague. And there was this one chapter that was giving me trouble and I truly had suffered trying to get this chapter right. And I finally had thought I had finally got it, and I went in and I shared it with Joanne, my most honest and direct critic. And I was just wrung out, I had nothing left to give. I mean, nothing left to give. And she comes in and she just drops it on the desk, and she says, “I’m sorry, you have to do it again. It’s not there yet.” And I had to do it again. And she was right, there was something still down somewhere in my toes I could summon, and it could be better. And so those people in our lives, for me, I think the ultimate… If you pick really great people in your life, if you’re really lucky and you have great people in your life, and then those people are your ultimate mirror of when you’re falling short and when you’re doing okay.
BB: Is there an emotion that you experience? I’m asking because we do have guardrails put in and we kind of have systems in place, and we try different things all the time to protect creative time versus leading time and email time. And for me, one of the most dangerous indicator lights is resentment. Oh my God, when I am resentful, I do not like myself in resentment. I am not a good person in resentment. Is there an emotion or an experience that you have that tells you, “Man, I’ve got to reshape things,” or is it all kind of data-driven?
JC: Yeah, I think in the end, the data is extremely helpful on things, but… Yeah, it’s interesting, I learned something. I just want to maybe share this because I was thinking about it when I was reading your work. So one of the great mentors in my life, I’ve had many. I kind of created my own father, as you may know, because I didn’t really have one. And my dad was completely MIA and I had to figure out a way to have a father even though I didn’t really get one. And one of those mentors was Jerry Porras, who’s the one who really taught me how to do Grounded Theory research, and we invented the historical matched-pair method for what really then became the foundation for how I do all my research and my work. And Jerry, number one, just think about this, he was a massively tenured senior dean when I was 30 or 31 and we started working together. And when it came time to publish Built to Last, just think about this, when it came down to publish Built to Last, he never even raised the question, he just said, “Yeah, we should put the names on alphabetical.”
BB: You’re kidding.
JC: Yeah. It was Collins and Porras. But just the sheer sense of generosity, and he was a great Level 5 mentor, he really was. Those are the kinds of people I found in my life. Well, Jerry co-created a course at Stanford called Business 374, that is, actually the nickname of it is touchy-feely. And what you do in this course… And there’s a lot of sort of analytic math types like me that might end up in this course, or at least we should end up in the course, I would think. And you spend 10 weeks with 11 other people, and the only thing you’re allowed to voice for any time that you’re in that class is your feelings in T-groups. This was very hard for me, I was young when I went through it. But the lesson that I took away that Jerry taught me on that, and the more I live with it, the more I really believe it is true, is that even for those of us who are data-driven… And I am. I’m data-driven, I love research, all that. But we do not fundamentally operate at the level of thoughts and analysis. We fundamentally operate at the level of feelings.
BB: Oh my God, that’s so… Can you say that again?
JC: We do not fundamentally operate at the level of thoughts and analysis. We fundamentally operate at the level of feelings. And that’s one of the big things I learned from Jerry. And that you see any human interaction and somebody says, “Well, I think we should do this,” or, “I think we should do that,” or, “This is all messed up,” or whatever. And Jerry says, “You know, you’ve got all those things that are true and they’re factual and they’re all these, but the real conversation is what’s really happening at a feeling level.” And although I would say that I’m not super great at reading that the way Jerry was, I think his fundamental insight is right. So when you asked “Do I just go to the data?,” it’s interesting, even that thing of the +2, +1, 0, -1, -2, what I’m really trying to calibrate there is the totally subjective sense of the feelings of the day. The quality of your day isn’t in what you think of the day, it’s how you feel about the day, how you felt. So I’d have to think about that, do I have a single… I mean, I can notice certain triggers.
JC: I think a big one for me is something I have to always fight against is regret of things that I had either done or not done, that just seep back in, and I will wake up at 5:00 in the morning and they’ll seep in. You can picture this black mist coming in and boom, all of a sudden I’m back to something that I regret, and then that just begins to poison everything. And so that’s why I use the 20-minute rule at night, which is that if I wake up and I’m not back to sleep by 20 minutes, I get up, no matter what, and I go downstairs and I go into pointing forward, new research, new writing preparation, rather than looking backward. Because if I’m laying there in bed at 4 o’clock in the morning and those regrets come in, I just go backward, backward, backward, and then I just begin to feel worse and worse and worse about myself, which is a very bad start to the day. [chuckle]
BB: Yeah, no, it’s debilitating. Right?
JC: Yeah, yeah. And I think we’re all prone. One of my mentors, Michael Ray, had a wonderful line, which is, “Comparison is the primary sin of modern life.” And certainly if I feel myself making negative comparisons of myself to others or to a standard that I just think is the right standard, that can be sort of the start of a doom move.
BB: That reminds me very much of Theodore Roosevelt.
JC: “It is not the critic who counts.”
BB: That, and “Comparison is the thief of joy.” I mean, it’s so true. Okay.
JC: [inaudible] [laughter]
BB: Yeah, no, I love this, I love this.
JC: I knew that you would just have so much fun. Think of it as… My mascot has always been Curious George, and I always love the image. If you go to my bio on my website, you’ll even see a chimp climbing up my bio.
BB: [laughter] Oh my God, I thought I had a virus on my computer.
JC: Yeah, no, no. You saw the chimp?
BB: Yes, climbing up the text of your bio. [laughter] I called my sister in, and I was like… She works as my chief of staff. And I was like, “I’ve got a monkey virus.”
JC: No, no, that’s there on purpose because the bio’s got sort of these professional things and all this stuff on it, and I’m like, “But I am fundamentally a curious chimp. We’re going to put an animated chimp climbing up my bio.” So I picture like the CEO of a major company in China going there, and all of sudden there’s this bio and then there’s this chimp climbing up. That’s an expression of the curiosity value. It’s supposed to be fun. There should be a chimp on my bio just because it’s just… Who else would do that? And so we have a thing around here we call “chimposiums,” and so you and I just had our first chimposium.
BB: Oh my God, I love it. And I like you even more because of that little chimp crawling up your really stacked, serious CV made it so fun. Of course, I thought I was like, “Oh my God, I’ve been invaded. I don’t know what’s happening.” [chuckle] Okay, now, if you could see in my office right now, you would see your books sitting on top a very large hedgehog cookie jar. Two things. The Hedgehog changed my organization, and the Stockdale Paradox changed my life. Can you walk us through the Hedgehog and how you got there and why you have to admit that it is globally remarkable?
JC: So we were talking earlier about your kind of strange facility for tools, right? And you were asking about how I do, from the research to what ends up in someone like the Hedgehog or ends up in the Stockdale Paradox or ends up in Level 5 Leadership. So first of all, there always has to be a research method. Ours is a historical… I really loved how you had Jon Meacham on and his power of history. I’ve always believed in history. And so when Jerry and I came up with the matched-pair method where we were going to look at companies that became great in contrast to those that didn’t, I said, “We need to be historians.” And so my contribution to the method was to say, “We need to study history.” You don’t want to look backwards at Intel in 1972 and look at the decisions they made, you want to try to put yourself in 1972 and think about, “How did the world look to them at that point? How did the world look to their comparison company at that point?” And then you phase shift to 1973, ’74, ’75 and so forth. So that kind of historical lens, that’s then comparative as you go along. So people often think I’m a business author, and I’m not.
JC: I’m interested in really deep human questions. And it so happens that this methodology is where the data is, that you can take publicly traded companies, you can get tons and tons of data that’s sort of more or less consistent across companies of different types, and then you can really track them over time. And using that rigorous comparative method, because industries give you pairs, you can have Intel and an AMD, you can have a Boeing and a McDonald Douglas, and you can track them over time and compare and contrast how they made decisions. And using all that data and information, you can begin to get insights. You can also use pre and post. So Good to Great, you’ve got the era of a company in a mediocrity phase and an era when they’re in a great phase, and you can say, “What changed? What was different between this era and that era?” And then their comparison company, “What didn’t they do as a result or what did they do that was opposite that didn’t lead to that inflection?” So there’s this years and years of careful selection of the cases, careful study of the historical collection, the quantitative, the qualitative, all of that adding up.
JC: And what happens is, you begin to try to make sense of it. And so there’s a constant looping and iterative process where you’re beginning to try to see what concepts explain or at least correlate strongly with the difference between the great era to the mediocrity era, whether it be a great company to a mediocre company, or a good to great company across time. And you’re using this to say, “What was different?” And then based upon those differences, “What ideas are behind that? What concepts or principles might drive and explain that difference?” Now, as you begin to do that, one of the things that struck me early in my intellectual journey is there are different kinds of conceptual vessels. And the first question is, “What is the conceptual vessel for an insight?”
JC: So once you’re confident that an insight might actually stand, you need a conceptual vessel. Now, what do I mean by a conceptual vessel? Think about you can have a hierarchy: Level one, level two, level three. You can have a stage process: Stage one, stage two, stage three, stage four. You can have a dialectic: Stockdale Paradox or preserve the core/stimulate progress, thesis/antithesis/synthesis ideas. You can have an overlap, a Venn diagram type of idea. Or you can have a connectal causality, you can have an equation. You can even have something that’s a sentence but that captures an essential underlying idea. So like “Multiply, vary, let the strongest live and the weakest die,” which was Darwin’s seminal insight, I think on page 157 of Origin of Species. And so I always stop and then ask, “What’s the conceptual vessel?” So if we take the concepts that you were just talking about, if you take the Hedgehog… Let’s take that one.
JC: So what we found is that you have this process of leaders getting the right people, disciplined people who engage in disciplined thought and then they take disciplined action. And what we noticed is that it’s not like they kind of said, “We need to go from good to great. Oh, let’s go off and spend two days and what we’re going to do is we’re going to have great insights, and we’re going to know what we should do, and then we’re just going to come out and do it.” It really didn’t happen like that. Rather, what it was is they were kind of making a series of iterative decisions in kind of a council format that you read about in Good to Great. You make decisions, you see how they worked out, that adjusts your clarity and your understanding. And I kind of describe it as that it was like they were walking through the woods in the mist, and they’re bumping into trees and it’s really misty. But eventually the fog starts to clear and then one day they can see really clearly and they can go really fast, but it takes time to get there. And so then I started thinking through, “Well, let’s start putting patterns on how is it that they began to get better and better at their decisions. What are the things they were thinking about?” And so you begin to take hundreds of events, decision events, and you begin to sort of start coding those decision events. Like “What were the things they were thinking about in this and these ones that were better than other decisions and so forth?”
JC: And you began to notice, well, this decision had these elements to it. Like they just weren’t very interested in electronic watches, they had no passion for that. Okay, so that’s interesting. And this one just didn’t make any money. And this one they were like, “Well, we can never really be super great at that, we can’t be better than anyone else at that, we shouldn’t be doing that.” And you begin to notice this and you do this across hundreds of decision events across all of the study set and eventually picture a table, and on that table are lots of slips of paper. Each slip of paper represents a decision event that, this comes from the research, and you begin to think of it, and all of a sudden you begin to realize what this is, is this is a Venn diagram concept, and that as they got more and more clear, they more and more began to make decisions that met three tests. They were deciding to do things that really reflected what they were really passionate about, which included what they held deeply in their values, what they really felt their sense of purpose was, and just what they sheer loved.
JC: But they also then had this other piece, which was a real rigor around the question of, “Could we really be the best at that? Because if we can’t be the best at it, then we’ll never be great at it.” And then the third was really smarts on their economics. They really began to understand what drove their economic engine, truly drove their economic engine. And then once they got clear, then you begin to see this bubble out, and all of a sudden you could begin to see the Venn diagram or the Hedgehog concept emerge, which is those three circles. The intersection, making all your decisions, so they go in the middle of those circles that fit what you’re passionate about, what you can and cannot be the best in the world at, and what truly drives your economic engine. That’s sort of the chaos of the data to a concept. But then there’s this last step, which is wrapping paper, and this I learned from Joanne. Joanne, when she was a graduate student, made this great contribution to me. She went off and she did a whole study on ideas and power of ideas. And one of the things she observed was that if you can wrap an idea in a way that if I give you that idea as a present, it’s wrapped, and you have to unwrap the idea and then understand it and then re-wrap the idea and now it’s yours.
JC: So what I really began to notice was that as they got clear, it usually simplified down to one really simple thing that they could focus their energies on. And I kept thinking about that Isaiah Berlin essay, “The Hedgehog and The Fox.” The hedgehog knows one big thing, the fox knows many things. And then I realized, “These people were pushing towards what they needed for their organization something to be hedgehog about, that just all roads lead to Rome, would come back to this hedgehog.” And so it wasn’t the three circles, it was… It’s the Hedgehog Concept. And so it was that wrapping paper. So if I say, “Do you have a strategy?” “Oh yeah, everybody knows that we have a strategy.” It’s like, “Do you have a Hedgehog Concept?” You have to pause, and now what you have to do is say, “Well, what’s a Hedgehog Concept?” Now you have to open it up.
JC: And it’s not a cutesy thing, it’s like there’s a reason. What’s the big thing? And the big thing has three components to it, and we need to make decisions that fit with that, and if we do that in a disciplined way, we’ll begin to build momentum, which will then lead to the Flywheel. And so we see how all this comes together, is from question to research method, to data, to chaos, to insights, to emerging validation of those insights, to conceptual vessel, to a construct, to wrapping paper that then ultimately fits in a whole overall framework. So if you were kind of to think about the essence of what I do, that’s it right there, and that’s how the Hedgehog came to be.
BB: It’s really weird, I just have to tell you, Jim, to hear someone… Barrett from my team is in the office with me right now and she’s hearing the conversation and she’s looking at me like, “Oh my God.” It’s very weird to hear another Grounded Theorist put this out in a way that you know when you hear your work described accurately. Barney Glaser, who Glaser and Strauss developed Grounded Theory at the University of Chicago, ’30s, ’40s. He was at UCSF and he was my methodologist on my dissertation, and he didn’t use the word chaos, but he kept warning me, “It’s a drugless trip.”
JC: [laughter] Meaning you don’t get to take any drugs?
BB: Yeah, exactly. And I was like, “Well, what do you mean?” And he said, “There’s going to be something that feels out of control.” And it was really hard because I was in a PhD program that had never had a qualitative dissertation before, and so I had to get special dispensation from the provost and all this stuff to do this qualitative dissertation. I think they just let me do it because Barney Glaser was my methodologist. And the Sociology Department really lobbied for me. They’re like, “This is a big deal, this is a big methodologist person.” But I remember at a point saying, “I don’t understand what’s happening anymore. I’ve lost control of this.” And it felt so chaotic. And to hear you say from chaos to concept, and Barney would always push me and say, “What is the core thing here that explains the chaos? What is the main concept that explains the chaos?” It’s a weird process, do you not think? That combined with… You know, for those of you who are not Grounded Theory methodologists, the Constant Comparative Method, which it sounds like you use that as well, is that true?
JC: Absolutely. It’s cornerstone to… If you just studied a bunch of successful companies, you’d find that, guess what, they all have buildings and their chief executives wear clothes. And so if I came to you and I said, “You know, if you wear clothes and you work in a building, you’re going to be a great company,” it’d be absurd. So you find all the comparisons. Also, they wear clothes and, well, until the pandemic, work in buildings. And so yeah, there has to be comparative. You always have to say, “Not what did the great companies in their best years share in common?” It’s, “How were their whole approaches different than others that were in the same situation that didn’t do as well?”
BB: I remember one time Barney gave me this book of Grounded Theory dissertations that he had published himself. And he said, “One of the things about Grounded Theory that’s so powerful is that when you… ” To Joanne’s point, “When you wrap something up in something memorable and sticky that people can unwrap and re-wrap and embed and make their own… ” One of the compliments I get a lot about my work that people outside of research think it’s an insult when people say this. They’re always like, “Oh my God, I can’t believe she said that to you.” But people will say, “I knew everything you were talking about today, but I didn’t know there were words for it. I didn’t know it was a thing.” And so how did you get so good at wrapping? You’re like “Elf.” I’m thinking about “Elf,” the movie when Will Ferrell’s wrapping all those gifts. You’re an Elf-level wrapper. How do you go to type of vessel to, “Am I going to use a metaphor, a story, a picture?”
JC: Yeah. So remind me, I might want to pop back in a minute to the Hedgehog because there’s one thing that I’d love to share with your student body, your listeners, about the power of the Hedgehog at an individual level. Let me just hit that real quick, and then I’ll go to this kind of magic moment that happened. So I’ve actually, with a lot of the ideas in our research… And I mentioned earlier I don’t think of myself as a business author. It’s like people thought that Peter Drucker was a business author, and he wasn’t. And Peter had a big impact on me, and what I came to understand is that Peter was ultimately interested in a giant human question, which is, “How do you make society both more productive and more humane?” It’s this beautiful, big question, and I’ve always been interested in sort of the big questions. And the research through rigorous data and companies allowed me to look at larger questions. And as a result, Good to Great is not in my mind a business book, it’s a book that developed powerful ideas that came from studying businesses in this rigorous way.
JC: So the Hedgehog, very powerful for companies, very powerful for non-profits, but think about it at an individual level, as a human idea. “What’s your hedgehog?” I like to ask people. And think about it as that, again, it’s the three circles, but it’s slightly different. It still starts at the top circle, which is, “What are you really passionate about and love to do?” But you know that old saying, “Do what you love, the money will follow”? Well, that’s not true. I love to rock climb, and no one’s ever given me a check to go rock climbing. And then there’s the second circle, which is it’s not about best in the world, because if you’ve limited every person should only do what they can be best in the world at, there would only be one orthopedic surgeon because only one can be the best. The second circle is this, “What are you encoded for? What are you made for such that when you do it, it’s not that you’re good at it, it’s that you’re wired for it?”
BB: Oh my God.
JC: In my case, I thought I was going to be a mathematician, and I went off to college and majored in mathematical sciences. But while I was there, I met the people who are encoded for math. I’d get to the same end of the proof, but they did it in one-third the number of steps and one-third the amount of time. Their brains were made for pure math. My brain was not made for pure math. I was good at math, but I wasn’t encoded for math, so that couldn’t be my hedgehog even though I was good at it, but I could never be wired for it the way they are. And the key is to discover what you’re wired for. Then the third is, and you can make a living at it. You can make a living pursuing the goals that you find meaningful. And if you have all three of those, I wake up in the morning, “I’m really passionate about this, I’m wired for it. I’m encoded for this. And I can actually do something useful for which there’s an economic engine.” You found a hedgehog.
JC: And one of the things I think about what makes a really humane company that’s also incredibly productive is the greater the probability that any random sample of people in your company are in seats on the bus that align with their personal hedgehog. So they’re in a seat that, “I love doing this. I’m really wired for this. I’m good at this. I’m made for this.” And they’re also doing something useful enough that the company can pay them for it. And you have more people where they are in their hedgehog in their seats, you have this marvelous genius of the end of it’s a humane thing because they’re in the right seat, and it’s a productive thing because they’re in their hedgehog in that seat. Anyways, forgive me for going off on the personal hedgehog there.
BB: No, it’s amazing.
JC: For young people, I always like to say that a really good place to get to is to have discovered your hedgehog before you’re 30, if you can.
BB: Oh man, I’ve just got to tell you that I am just seeing a little hedgehog bus full of hedgehogs, and it just… I’ve got to tell you, you’re going to read my bio on my website next week, and it’s going to have a little hedgehog climbing up the side of it.
JC: Yeah, I don’t know how to answer your other question because there’s this mystery moment when something just flashes and I don’t remember when it became clear, the Flywheel analogy, the linking to the Hedgehog. I do remember when BHAG happened. A lot of times what happens is this: I’m trying to teach, and I’m trying to help somebody understand something, and it pops out of my mouth. I see it on the table, and then I grab it and put it in a cage before it can run away.
BB: Oh my God, yes, I’ve got both hands up in like a prayer yes. Okay, so I’ve got to say two things really quick. So I want to go back to the Hedgehog for a second. So for me, I had to figure out my personal Hedgehog before I could figure out this organization’s Hedgehog. And one of the things I have to say that the irreversible leap…
JC: Yes, Bill Lazier.
BB: So Bill said, “Take that irreversible leap and it’s a scary thing.” Let’s see if you track this, this is kind of a crazy thought, but it’s where I am. We did your book as a organization-wide read, but I felt like the moment I said to everyone, “We’re going to get hedgehog-y.” We got hedgehog stationary. We embodied this thing. To me, it was an irreversible leap because I’m surrounded by people that are way smarter than I am. And when I said, “This is the litmus test we’re going to use,” I got held accountable in the most freaking painful ways as the founder and the CEO of this organization, because I got challenged on whim-y ideas. That people would start saying, “How does this fit our hedgehog? I don’t understand. We’re not actually really that passionate about it, we’re not even mediocre at it, and… ”
JC: [chuckle] “And we’re going to lose money.”
BB: “And we’re going to lose money.” And then I would say, “Well, I think I’ve worked my ass off for the last 25 years, so if I want to try this… ” And they’re like, “That’s fine, but let’s not call it a Hedgehog.” But man, was that… Just learning about the Hedgehog is an irreversible leap.
JC: And of course, you have a capability that I am less wired for, which is building, leading, and running an organization. I would say that that’s not heavily in my Hedgehog. And so you’ve had to really think about translating it to the company. I’m not convinced that in life hedgehogs are always better than foxes. I think I’m maybe a serial hedgehog is maybe the way I think of myself, but there are walks of life where being a fox is very helpful and there are certain fields were knowing a lot of things… Like if you’re a neurobiologist, you want to really understand the biology of human behavior. I just took a whole course on this. And you have to be pretty fox-like about everything, from evolution to the way synapses fire. You’ve got to have a lot of fox understanding to really understand the big thing. I think the power of the hedgehog is something you just put your finger on, which is organizations need focus in order to really get that traction of that sort of flywheel momentum, a series of good decisions that accumulate one upon another over a long period of time, building momentum like a flywheel.
JC: And part of how you do that is to say, “Look, folks, there are lots of things we could do, but this is the big thing, and we remain focused on the big thing so that we can get that cumulative momentum.” Sometimes a fox-like leader still has to have a hedgehog for the organization in order for the organization to have momentum. And then you can experiment around the edges. In Great by Choice, I write about fire bullets and then fire cannonballs; you can fire bullets and find things that will work. And every once a while, you find that something new that you hadn’t done before actually still meets the three tests, but you didn’t know that and you fired a bullet and it worked. So for example, if you think about the evolution of, say, Apple… Or actually, here’s one way back in history, but it’s interesting. If you realize that for the first maybe couple few decades of Marriott’s life, they didn’t have hotels, they were restaurants and started with a single A&W root beer stand. And then J. Willard Marriott Junior tried an experiment of doing a hotel, and it worked. And then it turned out that the passion circle for them was, “Actually what we’re really about, what we really love, is helping people away from home feel they’re among friends and really wanted.”
JC: Exactly. “And we can do that in restaurants, but guess what? I’ve proven with our first hotel we might be able to do this in hotels too.” So what happened is through experimentation and rigorous empirical validation, you can expand the number of things that meet all three tests, so that that’s what allows you to evolve and extend the flywheel further and the hedgehog kind of grows, if you will, but while also still having the discipline to say, “No matter what we do experimentally, if in the end it doesn’t meet the test, we’re not passionate about it, we can’t be the best in the world at it, and there’s no economic engine in it, it misses any one of those three tests, it might have been a fun experiment, but it shouldn’t be converted into a really big cannonball for what to do next.”
BB: I want to hover over something that you just said quickly there because it’s a really profound thing for me, is start with bullets before you move to cannon balls. Because I’m not only am I like, “We’re going to try this and I’m going to force it into a hedgehog-ness, but I’m starting with all the gun powder in one cannonball.” But I’ve learned, you’ve taught me. So do you want to just unpack that real quickly for people that were listening to the start with bullets and then just the calibration process? Because I think it’s so fantastic.
JC: Yeah. So let’s just kind of stand back, and this kind of really marries Good to Great and Great by Choice, which are two books that sit next to each other. Great by Choice I did with my colleague, Morten Hansen. I’ve had these wonderful people in my life; Bill Lazier and Jerry Porras and Morten Hansen and these wonderful collaborators. And Morten and I did Great by Choice. And let me just kind of lead into it by essentially laying out the arc of how a company goes from good to great and stays there. And let me just very quickly hit that and then tie this bullets and cannonballs in, because it’s really a cool thing. So it basically starts with the right people, and we can spend whatever time you want on that, the right people led by these Level 5 leaders who are humility and well, for the company, not themselves. And that’s just all about just one people. Then you begin to take discipline thought, which involves embracing an “and” view of the world, the genius of the and, the Stockdale Paradox, which you mentioned earlier, which we’ll probably touch upon in this pandemic world, and then you get your hedgehog, and the discipline thought to really understand the hedgehog. Then you begin to make a series of good decisions that fit with that hedgehog and execute them really well. And that moves you into disciplined action.
JC: And then disciplined action, when you begin to make those hedgehog-like decisions and execute them really well, you begin to build momentum, and this is the Flywheel effect where you begin to… It’s like it’s not just one turn, two turns. It’s two turns turn to four, like pushing a giant, heavy flywheel. Then six and eight and 10 and 12 and 100, and 100,000 and a million turns. That flywheel builds all this momentum by those decisions that fit with the hedgehog, adding up one upon another over time, and at some point you hit breakthrough. So that’s in disciplined action. Then what we learn in Great by Choice is there’s a couple of ways that you really accelerate the flywheel. One is with the execution power, the 20 Mile March, which is basically doing a few things really, really well, always. But then there’s this bullets and cannonballs. So how do you renew and extend a hedgehog, renew and extend a flywheel in a world that’s changing while also remaining true to what really fits in those three circles?
JC: And so imagine you have a ship bearing down on you and you have a certain amount of gunpowder, and one approach would be, “I’m going to take all my gun powder, I’m going to put it in a single cannonball, and I’m going to fire at that ship and hope hits.” And it goes sailing out there and it splashes in the water. And you turn and you look back and you’re out of gunpowder, and here comes a ship and you’re in trouble. But suppose instead what you did was you took a little bit of gun powder and put it in a bullet, you took your best shot with that bullet, it sails out there, it misses, but you see it’s 30 degrees off, so you take another bullet, you recalibrate, fire again. Now you’re 10 degrees off, take another bullet and fire, ping, you hit the side of the ship. Now you take your gun powder because you know it’s a calibrated line of sight, now you take your gun powder, now you put it in the cannonball, and now you fire the cannonball out to the ship and hit the ship.
JC: Now, what we found for entrepreneurs who then go on and build very successful companies in highly turbulent environments, which is most of our world these days, is they’re very disciplined about fire bullets then fire cannonballs, both as a hedge against the world’s uncertain, what we did before might not work in the future, and to find new things that might work, and to do this in a very disciplined, calibrated, empirical way. But at some point they fire the cannonball once they have calibration. Now, here’s the key point. What gets very exciting is then through that process of firing bullets and you got your people, you’ve got your Level 5 leaders, you’re confronting the facts, you’re living the Stockdale Paradox, and you got the Hedgehog and you’re making decisions, and that flywheel’s building momentum, and it’s really going, and you’re executing on it really well, and you’re 20 mile marching. And then at some point, like, how far can it go? Well, there’s this marvelous moment of if you look at great companies in their history where they make some kind of a beautiful extension of the Hedgehog and the Flywheel.
JC: So take Apple. For most of its history, it was a personal computer company, right? And then when Steve Jobs comes back in ’97, he gets the right people and all that, but then he begins firing some bullets, one of which was this little bullet called the iPod. It was not a cannonball, it was truly just a bullet. It was such a bullet that it only merited a single sentence in the 10-K the year that they put it out. It was just called, “A natural extension of our digital hub strategy.” It was a bullet, but a very cool bullet. And it turned out that a whole bunch of people inside Apple kind of wanted to carry their music around like that, and then they wanted software to be able to organize, and that led to iTunes. And then came this thing about, “Well, maybe we could put it on Windows machines, and so forth.” You can see it was bullet, bullet, bullet, and then it was like, “You know, we don’t have to be just a personal computer company. We could be like this personal device company with everything that’s happening.”
JC: And once they fired the cannonball, the natural extension went beyond the Macintosh and all those computers. You had this big burst of momentum in the flywheel, and now you then added the iPod and the iPhone and the iPad and all that, which were extensions that continue to this day. And so notice how what you have is you’re sort of doing all the things and you’re in the hedgehog, but you don’t say, “The Macintosh computer is our hedgehog. Our hedgehog is what we can be passionate about, best in the world at, drives our economic engine. And if by bullets and cannonballs we discover an extension of that that merits a cannonball, let’s do iPods and iPhones, it could then take us to a whole other place, but still consistent with that idea.” And you look over history, that’s exactly what you see over time.
BB: I’m looking at the new book, BE 2.0, so the Beyond Entrepreneurship, your second edition. Is the map on 150 or something?
JC: Yeah, Chapter Six. And the beauty of the map is, if I died tomorrow, which I don’t intend to, I’m only 62, I describe as mid-point in my career, but if I died tomorrow, I would just say to people, entrepreneurs who want to build a great company, “Read BE 2.0 and follow the map.” And the map is 30 years of work. Chapter Six. I took 30 years of research, all the studies, which I sort of thought of as ultimately it wasn’t just a bunch of studies, it’s actually been one giant study into what makes great companies tick that came out in installments. Built to Last, Good to Great, How the Mighty Fall, etcetera. But then I wanted to create a single cohesive framework that would take the 30 years of research and put it in one place where I could say to people, “This is how what the map came to be, but here is the map.” Brené, if you said to me, “Jim, I want what we’re doing to be an enduring great company,” I’d say, “Read BE 2.0 and follow this map.” It starts with you as a Level 5 leader and then building new Level 5 unit leaders. And then we go to the whole people question. Then you can see how this whole map… And now notice, we just went through up through stage three of four stages right there in the map.
JC: Then you get to the building it to last and staying alive, and the productive paranoia, and managing your dread, and becoming a clock builder, and the long-term preserve the course/stimulate progress, and all these things. But the beauty of it is there now is a map. And as a researcher, I’m sure you… This is the thing, when you talk about the chaos to concept. For me, one form of bliss, I’m sitting here in my management lab and literally, I have the map laid out on a single whiteboard right to my left, I’m pointing at it right now. One of my goals in life was to finally be able to take three decades of work and fit everything integrated and connected into one map. And that’s what this is. And now I’m like, “Okay, I’m moving on to new questions outside of the ones I’ve worked on. The what makes great companies tick map is there, I can look at it on the whiteboard, it’s a single whiteboard. And it’s just deeply satisfying, intellectually satisfying, to look at it and say, “I didn’t know it would take 30 years, but there it is. I can exhale and I can move on to the second half of my career.”
BB: I’ve got to tell you that this book, Beyond Entrepreneurship 2.0, BE 2.0, is such a generosity, it’s so generous. For those of y’all who have not read it yet, the map is in the center of the book, and it’s not just a map, it’s got a legend, where Jim tells you, “Okay, here we are in the disciplined action stage. Here are the three chapters you should read from this book, put them with this reading.” It is… Literally, you have laid it out for us. It’s very generous.
JC: I really do think of it as I move on to the second half of my intellectual career, I really wanted to be able to hand to people “If I’m not here, here’s the map. And I trust you, you’re great students, you don’t need me. Follow the map and use your best judgment, and you’ll probably be in pretty good shape.” That’s what I wanted to give. And you mentioned also generosity. Beyond Entrepreneurship 2.0 is an act of love for me because kind of the other spark of what really drove this is there’s a co-author on this, Jim Collins and Bill Lazier. And Bill died in 2004, and Bill was the closest thing to a father I ever had. And I would not have done any of the things I’ve done were it not for Bill Lazier. When Bill died in 2004, I knew I really wanted to write something about Bill. And I didn’t want to write an ephemeral article or a thing for the alumni magazine or an obit, I wanted something enduring and worthy of writing about Bill. And it sat there for a really long time, and then Joanne, who just runs through my life as the… I sort of think of it as she’s my guidance mechanism in my head for all my erratic propulsion energy.
JC: And she had this wonderful idea. She said, “Why don’t you go back to the first book you ever wrote?”, which was Beyond Entrepreneurship. And what that book was about was the word beyond. It wasn’t about being an entrepreneur, it was about… I think of a Brené Brown having started as a successful business. Now, how do you go from there to an enduring great company? It’s beyond entrepreneurship. That’s what Bill and I wanted to give people. And it was based on our course at Stanford, and it had a very loyal following, but a small following. It got kind of dwarfed by all my later books. But for some people, it’s still their favorite. Reed Hastings read it every year for more than 10 years to bring him back to center in building Netflix. Joanne said, “It deserved more attention than it got. Why don’t you upgrade it, add new material, maybe put the map in there? But most important, write about Bill and write about what you learned from Bill and how you would not be who you are without Bill.” And it’s still by Jim Collins and Bill Lazier, and Chapter One is “Bill and Me,” and about the life lessons I gained from this truly generous and incredible mentor.
JC: And the most important thing is, I’m thrilled to have the map, what I am sharing Bill with the world. I was sitting there in Stanford Chapel after Bill died, and there were all these people in that chapel. And Bill had totally transformed my life. When Bill died, I cried really hard, and it was such a difference of how I cried. Because when my father died, I cried for what I never had. And when Bill died, I cried for what I had lost. And now to be able to honor Bill with a book that brings what we did together back to the world and to offer Bill in my words to the world is an act of love and, I hope, generosity.
BB: It was my favorite book. And then now, this is my favorite book. And when I read, “Never stifle a generous impulse,” which is one of the things that Bill taught you, right, one of his lessons?
JC: Yeah, it was inspired by a phrase that Bill Hewlett would use, but Bill liked. That was Bill. Never stifle a generous impulse.
BB: I thought to myself, “Man, he is putting that into practice in this book.” Like, this is an offering, and you can feel the love in this book. And I’ll tell you how you can feel it; there is a warm hand around the shoulder, let me walk with you through this vibe in this book. And you feel you with your arm around my shoulder walking me through it, but you also feel Bill.
BB: And the way you laid this book out is sheer genius. The fact that over half the content is new…
JC: Almost half, but not quite.
BB: Almost half, okay. But there’s a slight difference in the page color, so I can see what was the original, which was so meaningful for me, and then you coming in with your 2020 thoughts. It really truly is such an homage to Bill and such a gift to us as the reader.
JC: It’s interesting because… I’ve got to share with you a little story of what happened. So Joanne had this idea, and then I raised it with… There’s sort of an odd little back story of luck event in life, which is that it so happened that the editor on Good to Great had moved over to found the imprint, Portfolio imprint, at PRH. And PRH had bought Prentice Hall, which was the owner of Beyond Entrepreneurship. And so the person who’s been the editor, so I called up Adrian, Adrian Zackheim, and I said, “This idea about coming out with this new edition and an homage to Bill,” and Adrian jumped all over it. But then I made a mistake. I was like, I didn’t do it. I started playing around with the words, the original words that Bill and I had written. And I got all tangled up because I’m a different writer than 30 years ago. And also I was kind of messing with what Bill and I had actually done together, and it was almost kind of trying to become like writing 30-year-later Jim views sort of feel. But in a sense, that would sort of put what Bill and I did together kind of begin to erase that, which is the opposite of what I wanted to do. So I actually threw it out. I was like, “I can’t do this, I don’t know how to do this.” And I wasn’t going to come out with it. I just put it in a drawer. I just was like…
JC: Yeah. “This is a year. It’s just… I’m throwing it away. It was a good effort, but man, it didn’t work, and I’m all tangled up.” And Joanne was continuing to support me. And Adrian and Nigel Wilcox in London, they would just periodically send me these emails saying, “You know, have you thought more about this?” And finally, I thought about this, came up with this weird idea. I said, “Well, what if you left all the original text, with a few corrections, intact, so that it is exactly as Bill and I wrote it, but you put in right next to it in different colored pages writings of today?” So that as a reader it’s like, “Ah, now I’ve got Bill and Jim walking next to me because I’m in the gray-shaded.” And then there’s, “Oh, and here’s Jim sharing thoughts with me from today, and I’ll put them together.” And it’s the weirdest thing. To my knowledge, no one’s ever done this before, so I had no idea if it works. It was just the only way I could come up to solve the problem. But the beauty of a PRH and what they said, “Okay, that’s different, but let’s give it a try,” and it’s what actually allowed it to happen. It almost didn’t happen. Truly it was just in a drawer. I was like, “I’m not doing this. I can’t figure out how to do it.”
BB: I’m with Penguin Random House as well. The publishing business is not as innovative as it probably could be, but I do love the fact that Penguin Random House, at least in my experience, has been willing to try a lot of fun things with me. As a reader, it’s fantastic. It’s like I have a sense of place. And it’s not disjointed. But I have to tell you too, as a Grounded Theory researcher, so one of the big, I guess, idioms from Grounded Theory is, “A theory is only as good as its ability to work new data.” And the fact that there are additions and there is context and color and connective tissue that you add, but the fact that what you and Bill wrote is still as sound as it was then including all the new data that are working, is really… That’s a feat.
JC: The way I like to think of this kind of work is if you do it right, and I imagine you must feel the same way, ultimately, you want things that are timeless and true. Or at least true with a small t. There’s a big T truth, but I think us little researchers in the world, we can get to small t truth. But sometimes people often ask, “What did you get wrong in Good to Great?” And I can never really answer that question, because if you do the work right, you didn’t get things wrong. What you got them is incomplete.
BB: That’s right.
JC: Or you got them primitive. And so incomplete means what you found is not wrong, it’s just not the whole story yet, and so you have to keep searching. And if you did your work wrong, then you would go back and you would say, “The Hedgehog is just wrong.” Well, I don’t believe that. I believe the Hedgehog is right, and it’s just that it’s incomplete, it’s not the whole story. And the other thing that I find, and I’d be really curious if this happens for you as well, is that even if you’re the one who did the research and crystallized an idea and then processed it and shared it and put in a framework for people, do you find, Brené, that sometimes, while the idea is still the same idea, when you look at that idea 10 years later, the idea is true, but you say to yourself that, “Man, my understanding of that idea was primitive when I wrote it”?
BB: For sure. Conceptually this still accurately reflects the data. There is context now that I understand that I didn’t understand when I was doing this. And so the concept, the intervention point for this new understanding may not be the concept, it may be the vessel, it may be the wrapping. That does happen with me, but I think a lot of times people will ask, “Well, that shame definition emerged 20 years ago from your first Grounded Theory study that was just on shame. How is the definition different?” It’s not, because I had a huge sample and it took me six years to come up with that definition, it wasn’t a swag.
JC: You raise shame and I… And maybe it’s just my own denseness, so just maybe you can help me be more clear. What is the essential difference between shame and guilt?
BB: Hugely important. So the easiest way to describe it is shame is a focus on self, guilt is a focus on behavior. Shame, “I am bad.” Guilt, “I did something bad.” Shame highly correlated with addiction, depression, abuse, suicide, eating disorders. Guilt, inversely correlated with those things. We try to think, especially in this political environment of the last four years, we’ve tried to convince ourselves that shame is a very powerful social justice tool, shame is a compass for moral behavior. But it’s not. And there are no data. The data go back to Helen Block Lewis probably in the ’70s. So that’s, what, 50 years of data now? There’s just no evidence that shame drives ethical or moral behavior. In fact, shame is much more likely to be the cause of immoral, destructive, unethical behavior than the cure for it. Guilt is really a feeling of cognitive dissonance. It’s, “I’ve done something or failed to do something that is out of alignment with who I want to be or what my values are.” And it drives a psychological discomfort that is really adaptive for social change and for personal change. And so, really significant differences not only in how we experience them, but also the long-term behavioral outcomes of shame and guilt.
JC: Something just triggered in my head as you were saying that, which is I find myself wondering if there’s almost like a connection to a Stockdale Paradox way of looking at the world with that in the sense that, as you were describing it, it felt Stockdalian, in the sense that the Stockdale Paradox says, “Confront the brutal facts as they actually are and have unwavering faith that you can and you will prevail in the end.” And what was going through my head as you were describing that is it may be a brutal fact that you did something or you failed to do something that is a divergence from the level of values you would like to live to. And that part of it is to confront that brutal fact. It is a brutal fact that that action or non-action falls outside what I consider the standards I would want to embody and live to. And if I don’t confront that brutal fact, I can’t grow. On the other hand, the faith part of it is this unwavering faith that I can become more of the person of values that I would ideally like to move toward, and it’s sort of like faith in yourself as a human being, unwavering faith in yourself as a human being and your capacity to evolve, and confronting the brutal facts when you hold yourself accountable for that’s not the standard and to separate those two. Does that make any sense at all?
BB: No, yeah. So let me make it really concrete. So I lie to an employee. A shame self-talk would be, “I am a liar. I’m a liar. I’m a liar and a terrible boss.” There’s nothing redemptive there. It becomes a self-fulfilling prophecy. In fact, we rarely see people apologize, change behaviors, or make amends if they experience shame as the result of an action like that, because it’s so painful to think, “I am a liar.” Where do you go from there, right? That people double down and become defensive and blaming. So, “I am a liar,” versus I walk back into my office and I say, “I just told a lie, or I just lied to this person.” Now I can confront the brutal reality of, “I did something squarely not only outside of my ethics, but the ethics of this organization, what I believe is right, and I have to change that. That that is not my identity, that is a behavior that I can change and I have faith in my ability to change it and make it right. And I also have faith in my ability to accept the consequences of a loss of trust possibly.” And so I do think that when we are individually more shame-prone or collectively, we create a culture that is more shame prone. In our organization, we call the Stockdale Paradox gritty faith and gritty facts in equal measure.
JC: [chuckle] I enjoyed that. They made me smile looking out at Haystack Mountain.
BB: Yeah, it’s just that we thought, “This is gritty faith and gritty facts, but in equal measure.” And I think a shame-based culture or shame-based individuals have a really hard time, to your point, of owning the hard stuff if the self-talk around it is, “I am a bad person. I am a liar. I am a loser,” versus, “I told a lie. I made a mistake. I failed at this, which is actionable to change.”
JC: And it’s something I’ve really struggled with in terms of engaging with organizations, companies, institutions of all different kinds, profit, non-profit, sports, etcetera. And you and I both have the great joy to interact with so many different types of walks of life. But one of the things I puzzled on, and I’m curious how you resolved this, so let me put it in the form somewhat of a false dichotomy because I realize you can have the and, but the false dichotomy would be this. On one end of the continuum suppose you could, through your teachings and the things you’ve learned from your research and your practice, you end up changing individuals. And then the organization doesn’t change, but they all go on elsewhere with the rest of their lives and you’ve permanently changed them as individuals. The other end of the continuum would be that no, the end result is I want to change organizations, and I want those organizations to become, say, less shame-based cultures, so on and so forth.
JC: And I understand that if you change people, it changes organizations, but sometimes I’ve found… And I won’t go into specifics of who because I don’t want to name names of folks that disappointed me. But every once in while, like you invest, back especially when I would engage Socratically with organizations and such, and then you realize later some really took to ideas and like, “You never met me and yet you’re hedgehog-ing and embracing Stockdale Paradox and doing these things. I don’t even need to be there because you’re going to grab it and go with it.” There’s others that you see that you know nothing really changes for a given company or organization for whatever reason. And then Joanne always says to me, “Yeah, but at some point, you change to the people.” And so even if the organization didn’t become what you would want it to become, wherever the people go in their life, they’re changed, they’re different. How do you come down on that as the end result, changing people or changing organizations? Not too false of a dichotomy, but a tilt.
BB: I think it’s been the question of my career, especially in the last 10 years where I’ve been doing a lot of work, like you said, in Fortune 10 companies and with professional athletic teams and the military. And I will say that it just brings up a story that makes me teary-eyed every time. And I did some work with a group, and I’ve done all my military work pro bono for the last, I don’t know, five years, and I did some work, and there was really movement. And the military is hard to change culturally, right? And I’m not even going to talk about what branch or who I’m working with, but I’m doing this work. And not a week after I left and was feeling really great about it, they brought in someone whose views were diametrically opposed to mine and just kind of stood for everything that I didn’t. And they ended up very much latching on to that. And it was a real come to Jesus meeting that I had to have with myself around, “What am I doing?” Because it goes back to my time.
BB: And what I realized then, and what I try to work from now, is I know that if there are 100 people in a room, because I’ve been doing this long enough, if there are 100 people in a room that I’m working with, whether it’s at a school or a company, it doesn’t matter where, students, graduate students, there will be everything in that room from wild transformation, Brené with Jim’s book kind of transformation, to interesting seed planting, where maybe an idea or something I said will pop up in someone’s head six weeks or six months later, to complete resistance or disinterest, even worse. The disinterest is worse than resistance because resistance at least means there’s some emotion attached to what’s going on, right? And I just have to know that I’m there to serve everyone, and that’s all I can control. And I try to work from just an assumption of gener… I call it the Hypothesis of Generosity, and I’ve done my work. And I’m never prepared when I get a letter or an email a year later from someone who was in that audience that I didn’t think it went well, who said, “I had to leave that company because I don’t think they’re ever going to change in this direction, but man, did you change the way I talk to my kids and my relationship with my partner.” That to me is… That’s a win.
JC: Yeah, that’s a win. And no matter where they go in life, right?
JC: For rest of their lives and then the people they touch. And that’s one of the things that Bill really embodied for me is… And so you think about the single impact he had on me, and I’m happy to share the story of that because it was really profound for me.
BB: Yes, please.
JC: But the kind of how it goes to this notion of reverberating effects. So I mentioned that my dad was MIA. In fact, one of the things I loved was you were asking about the five songs. And I put a little fun fact in there, which is that one of the five songs is Hendrix “All Along the Watchtower.” And the fun fact is that I lived right around the corner from Jimi Hendrix, where Jimi Hendrix lived in Haight in the 1960s, because we lived five houses or five or six flats down from Haight on Ashbury. You can still find it. 515 Ashbury. I could hit that…
BB: You’re kidding.
JC: Oh no, I could hit that famous Haight Ashbury sign. It was like it was my street corner from 1964 into 1967.
BB: Oh my God.
JC: I was a grade school kid. I was ground zero of whatever was happening. And so if you look at that map of where everybody was at that time, literally if you went up and just went right around the corner, there was Jimi Hendrix and Janis Joplin and then the Grateful Dead and Country Joe and all this. But I’m just a grade school kid. All I know is I like the posters from the concerts at the Fillmore. Anyways, but why was I in Haight? Well, I was in Haight because my dad was an artist, they went there for the beat scene. And for whatever reason, he just… Being a dad was not really part of his hedgehog. And then when I moved back to Boulder, my dad stayed in San Francisco, we had one more year, one or two more years of interaction with him, and then really almost none. In high school, I tried to reconnect with my dad. At one point, he was living in an adobe hut, adobe building with a dirt floor in Albuquerque, New Mexico. And I drove down with a… I took a turkey down for Thanksgiving. And I’m on a bus going from Boulder down to Albuquerque area to bring my dad a turkey to try to establish some sense of connection with him.
JC: And reading Plato on the bus, highlighting Plato. I think I still have the Plato book actually highlighted from that bus ride. And when I left that, by the time I got back on the bus, I realized, “There is no father here,” and we never really had anything to do with each other again, and then he died when I was 23. So there was never a chance to ever repair that. And so I remember going off to college, and my friends would call their dad, and I’d be like, “That’s weird. Why would you do that?” And then it began to dawn on me, “My goodness.” I was quite resentful of the fact that they had a dad to call and I didn’t. So I made a very conscious decision, which was I would create my own father. If I didn’t have one, it didn’t mean I couldn’t have one, I could make one. And so that began a process of I decided I would try to read 100 biographies. I invented this thing for myself of a personal board of directors, but the most important thing was the honing system to try to be aware of when people of great quality might take an interest in me. And I had this great, amazing stroke of who luck.
JC: And I was a second-year student at the Stanford Business School, and I didn’t get into the popular course I wanted and ended up in a course taught by a first-time professor by the name of Bill Lazier. And he had been an entrepreneur, he returned in his 50s to kind of have a renewal of a new life to teach. And I ended up in his class, and I remember asking my friends, did anybody know this fellow Bill Lazier? And nobody knew who Professor Lazier was, so I just went and showed up, just completely like I had no clue, and went and took his class. And for whatever reason, he took an interest in me. And it was about right… It was shortly after my dad died. And Bill and his wife Dorothy took this interest in me. And nobody had ever taught me about values, no one had ever had a conversation with me ever about values. Nobody had talked with me about service. I just missed all that. And Bill stepped in and became the first of many great mentors that I had from there, but he was the chair of the board of directors, he was the great force.
JC: And what he did was he just kindly took me on, and he just kept pushing and challenging and shaping and teaching and pushing and challenging and teaching. And then he basically started to fill this role. Then when I was 30, he knew I wanted to maybe teach and get involved in research and things like that. And there was this stroke of luck, bad luck for the person, another professor had had a family tragedy, and so there was an opening that at the last minute, the deans of the Stanford Business School had an unfilled course in entrepreneurship and small business. Bill also taught that class, and Bill went to the deans, he saw this opportunity for me, he went to the deans and said, “I think we ought to let this young guy, Jim Collins, have a shot at this. Bring him in and have him teach and I’ll take responsibility if he messes up.” Totally went out on a limb for me. Like, no. I don’t know why he did this, but he did. And then he gave me this also though sort of essentially that Hamilton thing, “Don’t throw away your shot.” And he’s like, “This is your shot.” I pictured it as I got a chance to pitch in Yankee Stadium, and Bill was like, “You pitch well, you’ll get to pitch again.” And so that began the whole journey. And Bill just like from then on until the end of his life was this force of all these lessons I share in Beyond Entrepreneurship of what I learned from Bill, which I want to share with the world.
JC: But at the very end of that first chapter, I write about sitting there in the chapel. And when I went to the chapel, I had this too self-oriented view of like I was the one person Bill had invested in until I went to the service, and there are hundreds and hundreds of people in that room. And I began realizing as I was talking to people, all these other people who Bill had affected their lives, that Bill had touched them, that Bill had shaped them. And all of a sudden I had this image, I had this image of every one of those as like this vector going out in time and space, and all these young people and all these people that he had touched and that he, by affecting… If you think about a vector going out in time and space, if you affect this trajectory a little bit when they’re young, it’s a huge sweep over their life. And then think of it across hundreds and hundreds of people who will then do it across hundreds of hundreds of other people, and this massive multiplicative effect. And I just have this image of like… And you describe this idea of you don’t know who you touch and who they touch and who they touch. Bill’s idea of affecting all these vectors, and he may not have ever even known some of them that he affected. And I can think of no better way to think of a life well led.
BB: When I read that final paragraph in that chapter, it was a very spiritual moment thinking about the countless… I mean, there were a thousand people in that chapel at Stanford. Imagine, I never knew Bill, but he shaped my life.
JC: Right, exactly. He’s got his arm around you in those gray-shaded pages.
BB: Yes. And I love what you write because it really kind of took my breath away, Jim. You wrote… This is when Bill was advocating for you to teach. And I think if you’ve never been in the academy before, some of the things that Jim has talked about his mentors doing for him are kind of unheard of. A senior person who’s a dean letting a junior person take first authorship on something, it just doesn’t happen. And then putting a bet at a place like Stanford on someone to teach who is not…
JC: A member of the tribe. [chuckle]
BB: Yes, right. But you wrote in the book, “Bill placed upon me a huge burden of responsibility. He trusted me. He believed in me.”
JC: Absolutely. And that was, I think, maybe one of the deepest things I learned from Bill was one of his great sources of wisdom was his trust. And you know, as you can think about it, how do you elevate people? And Bill just like… His trust and his faith and his belief was like this magnet that just pulls you up because you don’t want to fail that. Not in the sense of like, “I’ll be a terrible person,” but more just kind of like it’s magnetic. And Bill wasn’t this super charismatic person or somebody who would sit there and pound on your chest and say, “You can do this,” or whatever. He would just be… Just in his actions of like, “I’ll put myself on the line for you, because I trust you.” Oh boy.
BB: Oh boy. That is responsibility, right?
JC: Huge responsibility. And I was thinking about one of the lessons I learned from Bill, which I think you have written a lot about and understand at a much deeper level than I do, which is that Bill had this thing that I call the Trust Wager, and it’s one of the lessons I learned from Bill. And I, like all people in life, but I found this especially when I left the kind of nice walls of Stanford, I found that there were some people, they abused my trust, they took advantage my trust. And I was talking with Bill about this, and I said, “Bill, what do you do about that? Because you seem to trust people, and I’ve gotten burned on some things where I trusted people and that turned out bad.” And Bill really taught me this lesson. He said, “There’s this fundamental fork in the road in life, and it is your opening bid to trust or does somebody have to earn your trust?” And Bill’s view was that there’s far more upside and far less downside in an opening bid of trust, always. And I remember pushing him on this because, especially given my upbringing and a variety of other things and where authority figures in my life were not necessarily reliable and things like that. I’m like, “But people are not always trustworthy.” And that’s a brutal fact. And or they’ll behave in ways to take and lose your trust, right? That’s a brutal fact.
BB: That is.
JC: Bill came back to it as, “Essentially, first of all, make sure you never leave yourself so exposed it’ll be catastrophic.” So you do have good financial controls in such that in the event that somebody really goes rogue, they don’t kill the company, things like that. But the essence of it was, he says, “It kind of comes down to people.” Bill was a people person, a relationship person. And his basic argument was, “That if you trust people as an opening bid, number one, a lot of people will rise to it. You’ll make them more trustworthy by trusting them.” That was Bill’s view. The second is that it will attract the best people because they will thrive on being trusted. The best people will respond to, “I’m trusted, I’m responsible.” And if you want to have the right people around you, trust people. But this was Bill’s other thing. He said, “If you start with mistrust, you’re going to turn away the best people, because the best people will not take well to ‘You have to earn my trust. I’m not sure you’re trustworthy.'”
JC: And for Bill, it all came back to people and it all came back to relationships as the foundation for everything. He said, “I’m willing to take the cost, the pain, the disappointment that comes from every once in a while being wrong, but that is dwarfed by the upside to human richness, the benefit, the relationships of an opening bid of trust.” And then it actually turns out, as I understand it, I’m not an expert on this, I’ve only taken a couple of courses in it, but in Game Theory, as I understand it, if you zoom out on Game Theory, and I hope I’m not embarrassing myself with game theorists who might be listening to this, but my understanding is that across a large number of games, it actually turns out that the most rational thing is an opening bid of cooperation. And sometimes it works out well, and sometimes it doesn’t, but that’s kind of interesting if you think about it, right?
BB: I think that’s right. I think that’s even right in… What do they call that?
JC: I forget what the name is. I just remember…
BB: Yeah, but there’s the name of it though, in Game Theory that… You’re right. Like an assumption of collaboration or an assumption of something. And it doesn’t always go well, but it is a premise, the premise. I love it when you’re writing about this, because you really do push Bill on this trust issue.
JC: Yeah, I do.
BB: And I love that you said something about… Oh, “This was Bill’s trust wager or hardheaded belief that there is more upside and less downside to an opening bid of trust and an opening bid of mistrust.” And then you say… You ask Bill, “So what do I do then if you discover someone truly has abused your trust?” And man, Bill is not letting this thing go, because he answers, “First, you’ve got to make sure it’s not a misunderstanding or incompetence.” He’s still making sure, isolating trust and not that someone misunderstood or that they didn’t have the skill or ability to do what was expected or asked. He’s holding on to this thing hard.
JC: Absolutely, ferocious. And he’s just like… He had been burned by somebody who he said it cost him enough that it really hurt, didn’t kill him but…
BB: Yeah, enough money to hurt.
JC: So it hurt, but he still would come back to it and he’s like, “Don’t jump to the conclusion that it was a trust issue. It could be that somebody, just they’re incompetent. Incompetent doesn’t mean that they’re untrustworthy. You might not trust them to get something done, their competence trust. But it could just be simply that they just blew it. Or it could be a misunderstanding.” It’s interesting here at the Good to Great Project, we’re really fanatic about our commitments. Missing a commitment is a really significant thing, we just don’t do it, and to people that we commit to. So you commit to few things and then do them really well, that’s our philosophy. And one of the things that’s interesting is we have really good contracts, but Bill taught me something about contracts. He said, “You want to have really good contracts, but it’s not because of ever needing to use them. The purpose of a contract process isn’t negotiation, isn’t to then have legal recourse or to go to court. You hopefully never have to do any of that stuff. The purpose of a contract is so that both parties never have a misunderstanding about what it is that you’re agreeing to do.”
BB: Clarity of expectation, right?
JC: Clarity of expectation, assuming the best about both people, both parties. We shouldn’t be talking to each other if we don’t have that. And if we do have it, why do we need a contract? We need a contract so that we all basically look at it and say, “Yes, we all are understanding, so that somewhere down the road there isn’t one of those situations where you say, ‘I thought you were going to be here on December 3 and you’re not here. You lied to me.'” “Oh no, I thought I was supposed to be there on the 5th.” You prevent that.
BB: We call that “Clear is Kind. Unclear, unkind. We are really ferocious, to use your word, about contracts too, just because we just want to make sure everyone’s got the same set of expectations so that I can deliver against them.
JC: Exactly. But I was thinking a lot about the trust wager when I was reading your book because that theme is in there. And of course, I think I’m only in my early primitive stages of understanding the essence of vulnerability, but an opening bid of trust is courage and vulnerability.
JC: You are making yourself vulnerable. They might defect, right? They might, but what’s your bid going to be? And what I love about Bill was that his willingness to accept the cost of that is just part of the price of a great life.
BB: And I would say for me, because I operate from the same perspective, and trust… I mean, if you asked anyone here, if you separated me from everyone that works here and said, “What’s the one thing that’s the most important thing to Brené?” I think they would all say trust, without a hesitation, and I’m going to lead with a lot of it. I think that that feels vulnerable, and I have been burned. But you know the other, and maybe this is just part and parcel of a good life, I don’t have to carry the armor of distrust on my back every day. Do you know what I’m saying?
JC: I do.
BB: Like the opposite of what we say the opposite of daring leadership, which is vulnerable and authentic and accountable is armored leadership. And for me to move through the world… Now, I will tell you that when I have a deep experience of betrayal, I go into armored mode probably for some number of days or weeks before I realize that I can’t add that one unique situation to my load because it’s changing my life. My tennis game is not as good. I’m not as snuggly with my kids and I get frustrated with Steve easier. And so I think Bill was right, damn it.
JC: And I had to… It was interesting because I kept pushing and I kept pushing on that. And that’s why I included that lesson from him when I was writing that chapter of what I really took from Bill. I think Bill would think the world would be fundamentally a better place if people have that opening bid. And of course, that’s part because for Bill, everything comes down to human relationship and human connection.
BB: Yes, because that’s the neurobiology, right?
BB: Man, I’m so glad I get to walk with both of y’all through this book, it is just such a treat. It’s so generous, Jim. It’s so loving, and loving in a… It’s a loving 20 Mile March.
JC: It’s funny because I don’t know how re-release with new material and bringing Bill to the world, etcetera, I don’t think of this in terms of how many copies or that sort of thing. In many ways, I feel like the book has already done what I wanted it to do, which is I wanted to share Bill and also knowing that Dorothy has her copy.
BB: I feel very lucky to have this new copy. And I was a huge fan of the first one, this is even better. You ready for some Rapid Fire?
JC: You know, I am because I prepared. [laughter]
BB: Oh, you’re going to be really bummed out when I tell you this.
JC: Which is?
BB: I’m doing a different set for you of questions.
JC: Oh no!
JC: It’s funny because, just picking up on our last conversation, there was one of the original Rapid Fire that I had no idea how to answer, and so I had to ask my people, which the one is, “What’s my best leadership quality?” And I just sat there and looked at the page and I’m like, “I have no idea how to answer that question. I can’t even think of something.” So I ended up asking members of my team and people around me.
BB: So what did you… We have to start there. We’re going to officially start. because you know, I’ll tell you why. I switched it out for the Unlocking Us Rapid Fire, because I thought, “We’re going to talk about leadership for a long time, and I want to talk about Jim.” But we’re going to start with… Are you ready? Are you strapped in?
JC: I’m ready to go.
JC: If I have to pause and think, even if you’re rapid, I might think.
BB: Oh, no, yes, no, we love this. We did a podcast with “The Economist,” and she said, “Wow, we may need to change this to a ‘pausecast’ after talking to you.” And I was like, “No, that’s… You’re never going to rush my thinking.” I think that’s what’s wrong with the world half the time, so you take your time. Alright, so we’re going to start with number one from the other one, because I want to know the answer. What is your best leadership quality?
JC: So when I asked everybody, I got variations on a theme, and it builds on trust, which is that I trust them and I, as a result, give them a ton of freedom in a framework to manage themselves, to do their best work.
BB: Wow. Boom. I’m so glad I asked. And I’m so glad you asked.
JC: I am too. I just had a blank sheet. But I think that’s actually really true, and it’s the way… Even with my researchers who are college students, when they come in in the summers or etcetera, I give you a ton of freedom and I just trust you’re going to do great work and I’ll trust you’ll figure out how to manage yourself. And what I’m struck by is how much really great people just thrive on that.
BB: Because it’s so rare, Jim, it’s so rare.
JC: Well, I don’t have time to do otherwise. [chuckle]
BB: I know, but that doesn’t stop micro-management around the world. I mean that’s… It’s rare. Alright, fill in the blank for me. “Vulnerability is… ”
JC: The human condition.
BB: You are called to be brave. You have to do something pretty tough, but your fear is real and you can feel it right there in your throat. What’s the very first thing you do?
JC: Well, it depends on if it’s an action or something I’ve got time to prepare for. If it’s time for something to prepare for and it’s usually something around people, I write. I write so that when I engage, I can be honest and compassionate.
BB: What if it’s an action?
JC: There I think something that I have learned and I give myself only okay scores on, I think the essence of leadership for anybody… because one of your questions is, “What if you don’t see yourself as a leader?” And what I’ve really come to understand is the essence of it is seeing something that has to be done, and then they making sure it happens ultimately. But it’s the, “Jim, don’t be a bystander. Don’t be a bystander. That’s got to be done. Look to your right, look to your left. There’s you.” And so whenever I can get out of bystander mode.
BB: That’s powerful. What is something that people often get wrong about you?
JC: They think I’m a business author.
BB: I can see that until they read your stuff, and then I’m like, “He’s a people-knower. Is that fair? Is that okay?
JC: Yeah, yeah. I’m interested in big human questions ultimately, yeah.
BB: Yeah. The last TV show that you binged and loved.
JC: Joanne and I love TV series because they’re like a novel, and so it’s always kind of the most recent one. And so… Gosh, gosh, I just love so many. But the one we’re loving right now is French, and it’s called “The Bureau.”
BB: Oh my gosh, I’m going to have to look at that. Okay.
JC: There are so many.
BB: I know. Give me one more that you love, just because I didn’t know this was going to be a thing, and this makes me excited to know this about you, because I’m the same way, I love it too because it’s a novel.
JC: It’s a novel.
BB: Have you seen The Queen’s Gambit?
JC: Not yet. I saw in your comments, and that’s cued up for us, but I would say one that I felt really came to a satisfying conclusion… Now, some other people may disagree, but I think it’s really hard to end a series. I think that’s one of the great art forms of television.
JC: I really loved “Homeland.” I was really… I thought, “How are they going to end this? How are they going to bring the eighth season to a close?” And I thought it was very creative, and you, by the time with Saul and Carrie, I mean that’s a novel because it’s multiple years of very, very deep characters. And any great story, as you know, stories are not plot lines, they are people lines who create plots because of their character. And when you watch those two characters, Saul and Carrie, over the course of eight seasons… Oh, and I’ll share with one other, though, one that just absolutely, completely drew me in, and I was surprised that it did. Have you seen “My Brilliant Friend?”
BB: No, but you’re the third person that’s recommended that to me.
JC: The third and fourth seasons aren’t out yet, but it’s about a friendship of two Italian girls and young women, and it’s so human, and I was so drawn into it. And it’s not action like “Homeland” and such. I can’t wait for season three.
BB: Okay. Favorite movie or one of your favorite movies?
JC: “Silver Linings Playbook.”
BB: Oh God, so good. Okay, a concert you’ll never forget.
JC: Ojai Music Festival, which is contemporary classic, intense, wonderful wild stuff. And the episode of drumming, which is four movements of percussion, a Steve Reich piece. And getting up and walking out of The Grove where it’s an outdoor place, the power of the drumming had so gotten in my head that it was like I was drugged.
JC: The other one would be the first time I heard Beethoven’s “Symphony Number 3” in live. And the second movement, which is the “Funeral March,” and Symphony 3 is the break point in music. That’s when Beethoven threw out all the rules and said, “Music must conform to the needs of the artist, not the other way around.” Symphony 3, and the first time I heard the “Funeral March,” when it flips in the middle of that movement, I think it becomes a fugue. But anyways, the overwhelming feeling of goosebumps. Yeah, I don’t want a life without my Beethoven.
BB: Yeah, I don’t want a life without music. I couldn’t do it. Favorite meal?
JC: Salad and pizza with Joanne.
BB: What do you take on your pizza?
JC: Generally some kind of thin sausage or just cheese.
BB: Okay. What’s on your nightstand?
JC: It’s interesting because I don’t have books on my night stand because if I start to read, my brain doesn’t work very well at night. My night stand is eye shades so that I can sleep in if it gets light and I don’t want to get up. [chuckle]
BB: Perfect. That’s smart and spoken like someone who’s spent some nights in some hotels. A snapshot of an ordinary moment in your life that gives you true joy. Just one snapshot.
JC: An ordinary moment. So help me understand an ordinary moment. Meaning it just happened to be just kind of…
BB: Just going through life.
JC: And in my life.
BB: Yeah, in your life that just brings you joy.
JC: We have amazing wildlife that goes through our yard: Bobcats, foxes, birds, owls, hawks. And a snapshot of this beautiful red fox with snow behind it.
BB: Oh my God. Is that real? Have you seen that?
JC: Oh yeah. And right out our kitchen window. There’s something about just the sheer exquisite beauty. Speaking of, just as a building on that though, in terms of something that gives me great pleasure, I’ve got these paintings I want to see in the world. There’s a course called 100 of the World’s Greatest Paintings. One of them that just blows me away every time is called Fox Hunt and it’s a Homer painting, it’s in Philadelphia. It will make your heart stop, and it’s a fox.
BB: I’m putting it on my list, on my list of things to see. Beauty and excellence are big things for me, so I can’t wait. Alright, last one. Tell me one thing that you’re deeply grateful for right now.
JC: Boy, there’s so many things I’m deeply grateful for. Well, right at this minute, I’m very grateful for this conversation because it’s been a great conversation. I’m deeply grateful for having the chance to share Bill with the world.
BB: Beautiful. Okay, you gave us five songs that you don’t want to live without.
JC: And this was fun, by the way, because…
BB: This is fun?
JC: Oh boy, did I have fun because the test is that truly like if these were the only five songs on my music for the rest of my life, could I live with only these five over and over again? Like I would never tire of them, they’re that good.
JC: And so on the Zeppelin choice, I mean, I had six or seven options, but I finally settled on the one. So I actually had a lot of fun with this, and I have a little playlist on my iPhone now, and it’s called Brené 5.
BB: [laughter] I love it!
JC: And I can send you a picture of it. It’s Brené 5, and it’s these five.
BB: It’s funny because my husband looked at your list and he goes, “Eh, eh, hmm, Respect.” I was like, “Okay.” So, “Gimme Shelter,” by The Stones, “Respect,” by Aretha Franklin, “While My Guitar Gently Weeps,” The Beetles, with a runner-up Prince live version, “Gallows Pole,” by Led Zeppelin. Very interesting Zep choice. “All Along the Watchtower,” by Hendrix, who lived a couple of doors down. You also have a bonus… Okay, before we go there, let’s just stop here. So, “Gimme Shelter,” “Respect,” “While My Guitar Gently Weeps,” “Gallows Pole,” and “All Along the Watchtower.” In one sentence, what does this mini mix tape say about Jim Collins?
JC: I love that which is timeless and true.
BB: God. Dang, that’s good.
JC: And all of them are.
JC: I don’t know about you, but every time you hear those opening cords of “Gimme Shelter,” if your heart doesn’t stop when Aretha belts out R-E-S-P-E-C-T, you do not have a pulse.
BB: Yeah, you’re dead on the inside.
JC: And when you hear the opening blast of Hendrix’s version of “Watchtower”… And notice something about all five of those, all five of those have been successful, either are covers… because Hendrix didn’t write “Watchtower”… Either are covers or have been very successfully covered, which means the music is spectacular independent of that it had to be a specific performer. So, timeless and true.
BB: And then tell me your bonus selection, one piece that you would choose as the last music to hear in your life.
JC: Beethoven “Violin Concerto in D,” and he had only wrote one, with the Kreisler cadenza, which is the solo violin, is so unbelievably beautiful. It’s something Joanne and I got to know together. It’s just truly exquisitely beautiful, and I would be fine if that was the last that I heard in my life.
BB: That’s butter on your waffles?
JC: Yeah. But of course so is Aretha and Hendrix. [chuckle] That’s a great question, by the way, the five songs. And it’s really… It’s interesting how many songs that I considered, but then I played them multiple times just listening to them thinking, “Could I really listen to this as one of only the five? Like this is all I had for the rest of my life.” And it’s really interesting how many fell away at that test, but these five remained.
BB: Jim Collins, what a… I hope we met your goal of a curiosity-driven, fun conversation. For me, it was a complete delight.
JC: Absolutely a delight. My excitement about doing this was many levels from curiosity to connection to conversation, all of which we have done. And I just had this… Again, it’s just absolute sort of faith that if you and I began with conversation, that we would have a great conversation and that it’d be wonderful to share it with the people who follow you, that they get to listen in and to just be present with each other, and I felt really present with you.
BB: I feel the same way. It was just such a pure joy for me.
JC: Well, we’re early in our lives and many more things to come. And down the road, I can’t wait when all of my next research is done, which is on whole different questions, that we’ll get a chance to chat about that, because I think you’ll find it very meaningful, and I can’t wait to engage back and forth with you about it.
BB: Oh God, me too. Any time, anywhere. You name it, I’ll be there.
JC: Well, very good, and thank you for your very kind comments at the beginning.
BB: It’s true.
JC: I will now do nothing productive for the rest of the day and I will just enjoy those.
BB: I hope so. You’ve earned them for sure. Thanks, Jim.
JC: Very good, take care.
BB: I know that was a lot. It was dense, it was complex, but God, I love this deep dive. Thank y’all for listening and thank you for the deep dive with me. The breadth and depth of Jim’s work just is limitless, I think, and I hope it’s the first of many conversations. Jim’s website, www.JimCollins.com, is an incredible resource. Please go check it out. Kind of our housekeeping bulletin. Last week on the Unlocking Us Podcast, I walked you into my Willy Wonka weird tunnel of thinking, how I connect things that are seemingly un-connect-able, and a big re-visit to FFTs and asking the question like, “Why is my brain so tired? And how do we stay in good shape for all these FFTs that are coming?” This is our last Dare to Lead episode for the year, which I’m glad to leave you with something a little bit longer and more in-depth. Laura, who is our Director of Podcast calls this our extended dance mix bonus, which I really love. We’ll be back on January 11th with more. Stay awkward, brave, and kind, friends. And as always, deeply grateful for listening.
BB: Dare to Lead is a Spotify original from Parcast. It’s hosted by me, Brené Brown, and it’s produced by Max Cutler, Kristen Acevedo, Carleigh Madden, by Weird Lucy Productions. The sound design is by Kristen Acevedo, and the music is by, oh, the one and only Suffers. The song is “Take Me to the Good Times.” You can find it right here on Spotify.
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