Jim Collins: Relationships vs. Transactions [The Knowledge Project Ep. #110]
Master researcher and author Jim Collins shares a practical guide for leadership. In this episode, we cover the Stockdale Paradox, why we should trust by default, the difference between “risk afraid” and “ambiguity afraid”, approaching life through relationships and not transactions, and so much more.
Collins is the author of some of the most popular business books in history, including Good to Great, Beyond Entrepreneurship (BE 2.0), Built to Last, How The Mighty Fall, Start with Why, and many more. During his years of study, he’s learned the road map for leaders in business who want to build enduring companies.
Let’s listen and learn from the master.
Pair with episode 67- Jim Collins: Keeping the Flywheel in Motion
Here are a few highlights from the conversation:
People break into two buckets. Some come at life as a series of transactions. And some people come at life as about building relationships. You can have a successful life doing transactions, but the only way to have a great life is on the relationship side.
And so that’s when this idea appeared: I’m going to create a personal board of directors and I’m going to put people on that board who I admire for their character. They’re the sorts of people I wouldn’t want to let down. So I drew a little diagram of a board table and I put seven seats around it.
We found that the 10X leaders had a much wider range of ability between slow, medium, and fast. Sometimes they made really big decisions quickly and some days they made really big decisions slowly and there didn’t seem to be a pattern. Often the comparison companies would act very quickly.
The moment that you introduce autopsies with blame, as opposed to autopsies without blame, the more you are going to begin to create an environment where it’s like, “Man, the upside downside here of making a decision is, you’ve got upside downside for the company.” It’s an agency problem, right? If everybody becomes indecisive, that’s bad for the company, but it might be very good for their careers.
And then it began to dawn on me. They’re taking on increased risk to reduce ambiguity. If you have a job, you know what you’re doing, right? It’s much less ambiguous. It’s the paint-by-numbers approach to life. Going out on your own is a blank canvas. It’s a lot more ambiguous. Where do I start? What colors do I use? What kind of painting do I want to make?
What we found makes a great flywheel, a great company, go is when you’ve got an incredible, replicable, scalable recipe as an overall corporate approach to the world. And you know how that works and you understand why it works and people can explain why it works.
Wait a minute, maybe you don’t see the whole situation. You’re jumping to a conclusion about why somebody is doing something. When actually, if you can see the hat, you feel forgiveness. What do you think it means to forgive? And do you find it harder to forgive yourself or to forgive others?
And so much more. It’s time to listen and learn.
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