Great by Choice

1. Great by Choice Chapter 2: 10Xers Team 5 Andrea Brandt Vanessa Gomez Rachele Reagan Allison Schmidt

2. Final set of 10x cases • This chapter focuses on the behavioral assets the CEO’s of 10X companies.

3. Amundsen vs. Scott Roald Amundsen Robert Falcon Scott “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.” “Our luck in weather is preposterous.” “It is more than our share of ill-fortune…How great be the element of luck!”

4. Antarctica expedition preparation Roald Amundsen Robert Falcon Scott -Age 43 -Previous expedition experience -No exercise -No training -Worked with Ponies (not as adaptable as dogs) -Faulty motor sledges -Marked only intial supply depot -1 ton of supplies for 17 men -Minimal supplies -1 thermometer for altitude measurement (broke) • -Age 39 • -Previous expedition experience • -Exercised • -Lived/trained with Eskimos • -Experimented with different food sources • -Worked with sled dogs • -Marked his path every 8 miles • -3 tons of supplies for 5 men • -Carried extra supplies in case of emergency • -4 thermometers for altitude measurement

5. 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

6. 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

7. 10X leadership

8. 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

9. 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

10. 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. Accept no substitute! Demand the genuine!

11. 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

12. 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

13. 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

14. Industry compensation comparisons Biomet CEO, Jeffrey Binder Southwest Airlines CEO, Gary Kelly Jeffrey Binder: $1.3M Health Care Equipment & Services Industry Median: $8.07M Gary Kelly: $2.29M Transportation Industry Median: $6.91M

15. 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.”