GREAT BY CHOICE
Chapter 2: 10Xers
FINAL SET OF 10X CASES
10X Case
Company CEO
Dynastic Era of
Study
Value of $10,000
Invested
Performance Relative of
Market
Performance Relative
to Industry
Amgen
Robert Bradway
1980-2002
$4.5 million
24.0X the market
77.2X its industry
Biomet
Jeffery Binder
1977-2002
$3.4 million
18.1X the market
11.2X its industry
Intel
Paul Otellini
1968-2002
$3.9 million
20.7X the market
46.3X its industry
Microsoft
Steve Ballmer
1975-2002
$10.6 million
56.0X the market
118.8X its industry
Progressive
Insurance
Glen Renwick
1965-2002
$2.7 million
14.6 X the market
11.3X its industry
Southwest
Airlines
Gary Kelly
1967-2002
$12.0 million
63.4X the market
550.4X its industry
Stryker
Curt Hartman
1977-2002
$5.3 million
28.0 X the market
10.9X its industry
This chapter focuses on the behavioral assets the CEO’s of 10X companies.
AMUNDSEN VS. SCOTT
ROALD AMUNDSEN
“Victory awaits him who has everything in
order – luck people call it. Defeat is
certain for him who has neglected to
take the necessary precautions in time;
this is called bad luck.”
ROBERT FALCON SCOTT
“Our luck in weather is preposterous.”
“It is more than our share of illfortune…How great be the element of
luck!”
ANTARCTICA EXPEDITION PREPARATION
ROALD AMUNDSEN
ROBERT FALCON SCOTT
-Age 39
-Age 43
-Previous expedition experience
-Previous expedition experience
-Exercised
-No exercise
-Lived/trained with Eskimos
-No training
-Experimented with different food sources
-Worked with Ponies (not as adaptable as
dogs)
-Worked with sled dogs
-Faulty motor sledges
-Marked his path every 8 miles
-Marked only intial supply depot
-3 tons of supplies for 5 men
-1 ton of supplies for 17 men
-Carried extra supplies in case of emergency
-Minimal supplies
-4 thermometers for altitude measurement
-1 thermometer for altitude measurement
(broke)
DIFFERENT OUTCOMES, SAME CIRCUMSTANCES
• Amundsen and his team reached
the South Pole on Dec. 15, 1911
• Scott and his team reached the
South Pole on Jan. 17, 1912
• Amundsen and his team reached
home base on Jan. 25, 1912
• Scott and his team stalled in
March, then their bodies were found
8 months later
•”Effective blue ocean strategy
should be about risk minimization
and not risk taking.”
Blue Ocean Strategy, pg. 28
• Same environment, same
goal, drastically different
outcomes
• 10Xers did not necessarily
display higher levels of
creativity, vision, charisma
ambition, luck, risk seeking,
heroism, or making bold moves
PARADOX OF CONTROL
• We perceive we have control over external factors when we only have
control over our internal factors
• 10Xers embrace the paradox of control and non-control
• Example: test is coming up so you study
•“Lead teams with a surprising method of self-control in an out-of-control
world.”
-Jim Collins
10X LEADERSHIP
FANATIC DISCIPLINE
• Discipline- consistency of action, values, goals, method, etc.
-avoiding cookies on a diet
• Fanatic- extreme, uncritical enthusiasm
-like comic nerd
• “Independence of mind to reject pressure to conform when its incompatible with
values, goals, aspirations, and performance standards…having the inner will to do
whatever it takes to create a great outcome, no matter how difficult.”
-Great By Choice, pg. 21
EMPIRICAL CREATIVITY
• In times of uncertainty, instead of following the status quo you support
your own creative instincts through direct observation as opposed to
relying on opinion, whim, and conventional wisdom
• Example: Amundsen picked an unusual location for his base camp
• “It’s not about how much you innovate, it’s how you innovate that
matters.” -Morten Hansen at the Professional Convention Management
Association’s (PCMA) Convening Leaders Conference in Orlando
EMPIRICAL CREATIVITY: EVOLVING COCA-COLA BOTTLE
• The straight-sided bottles were commonly
used and as Cokes popularity grew so did
imitators. To safeguard their product, reps
for the company enlisted the help of glass
manufacturers.
• Root Glass Company of Terre Haute, Indiana
came up with the contour bottle that was
introduced in 1916.
• The bottle packaging was patented and is
now one of the most recognizable icons in
the world.
Demand the genuine!
Accept no substitute!
PRODUCTIVE PARANOIA
• Even in the face of a calm, stable environment,
remaining proactive and understanding that at any
moment the conditions could change for the worse
• Bill gates and his “nightmare memo” showcased
his productive paranoia because at the time, his
company was on its way to becoming the most
powerful in its industry
“Paranoid behavior is enormously functional if fear
is channeled into extensive preparation and calm,
clearheaded action…”
-Bill Gates via Great By Choice, pg. 30
BREAKDOWN OF PRODUCTIVE PARANOIA
Breakdown of Productive paranoia traits
• Build Cash Reserves and Buffers
- Amundsen and his supplies and eating raw dolphin
- Bill Gates insisted that enough cash was on hand to last a whole year without
revenues
• Bound Risk
- 10xers avoid unnecessary risk
- Amundsen avoided Snow Sledge
- Bill Gates not wanting to hire 17 people
• Zoom in, Zoom out
- Amundsen assess environment then made a plan of action
- SWOT
LEVEL 5 AMBITION
• Intensity and passion to achieve an objective great than one’s self
• “Every 10xer studied aimed for much more than just becoming successful, didn’t
define themselves by fame or …power or …money,…they defined themselves by
impact and contribution and purpose.”
- Great By Choice, pg. 33
• “The principles and practices [of] pioneering leaders are to: (1) Build enduring
enterprises that simultaneously solve for people and profits, (2) Forge winning
strategies that leverage their companies' unique cultural and human capabilities, (3)
Dramatically raise the aspirations and ambitions of their people, (4) Energize and
align their diverse global firms, and (5) Relentlessly upgrade leadership capabilities
throughout their organizations.”
-Michael Beer, Harvard Business School
INDUSTRY COMPENSATION COMPARISONS
Biomet CEO, Jeffrey Binder
Jeffrey Binder: $1.3M
Health Care Equipment & Services Industry Median: $8.07M
Southwest Airlines CEO, Gary Kelly
Gary Kelly: $2.29M
Transportation Industry Median: $6.91M
HOW DO YOU BECOME A 10XER???
• No definitive answer or pattern detected among 10Xers
•Scott Sellers, CEO and Co-Founder of Azul Systems
“…You have to be dedicated to not only executing on strategy – but even more importantly – being
an excellent communicator…Your priority needs to be your people. Be visible, support your
team, and help them stay focused on what they can control. Listen to what the market is
telling you. Sometimes the business model that built your company needs to change. If you
have to make changes (in either people or strategy) – make them quickly…Know what you are
good at – building a business takes a different skillset than sustaining one, or executing a
turnaround.”
•Ethan Oberman, CEO of SpiderOak
“The ascendancy of any company is never a straight line but rather littered with bumps, obstacles
and challenges along the way. These ‘scars’ give a company character and an inherent ability
to deal with those days or months that don’t go as well as others. As CEO, there is no
substitute for an uncompromising belief in the company’s vision.”