Jim Collins — A Rare Interview with a Reclusive Polymath | The Tim Ferriss Show (Podcast)

1. 0:00 – 5:26

   Cold open and sponsor messages (LinkedIn, Peloton)

   1. TFTim Ferriss0:00

      Optimal minimal. At this altitude, I can run flat out for a half mile before my hands start to shake. Can I ask you a personal question? Now would seem an appropriate time. What if I did the opposite? I'm a cybernetic organism, living tissue over metal endoskeleton. The Tim Ferriss Show.

   2. TFTim Ferriss0:23

      This episode of The Tim Ferriss Show is brought to you by LinkedIn. The right hire can make a huge impact on your business. The wrong hire can crater your business. And I have seen example after example from thousands of my readers, at a minimum, where they've told me stories of how finding the right person at the right time, and in some cases not even asking, "What should I do?" But asking, "Who should I find?" Because that person can help me determine what exactly to do more intelligently. And I've had a chance to hire two such people in the last year, and that has just made my business take a quantum leap forward, and my complexity in my personal and business life get cut dramatically. And this type of simplification cannot be overvalued. We think a lot about hiring, and I think a lot about hiring, and it is a skill that I've had to learn. It is important to find the right person. But where do you find that person? You can post a job on a job board and hope that that right person finds your job, that they are on the internet happening to scan something here and there and then find you. But think about it. How often do you hang out on job boards? The answer is probably not very often. So don't leave finding someone great to chance when you can post your job exactly where people go every day to make connections, grow in their careers, and discover job opportunities. That is LinkedIn. Most LinkedIn members haven't recently visited the top job boards, but 9 out of 10 members are open to new opportunities. And with 70% of the US workforce on LinkedIn, posting there is the best way to get your job opportunity in front of more of the right people. And you can be very, very highly targeted and specific. People who are qualified for the role you have and ready for something new, this is where you find them. It's the best way to find that person, that key person who will help you grow your business. And this is why a new hire is made every 10 seconds using LinkedIn. That's bonkers. Every 10 seconds. So head to linkedin.com/tim and get $50 off your first job post. That's linkedin.com/tim, T-I-M, to get $50 off your first job post. Linkedin.com/tim. Take a look. Terms and conditions do apply. This episode is brought to you by Peloton, which I've been using probably for about a year now. Peloton is a cutting-edge indoor cycling bike that brings live studio classes right into your home. You can also do on-demand, which is what I do. We'll come back to that. So you don't have to worry about fitting classes into a busy schedule or making it to a studio or gym with a hectic or unpredictable commute. I, for instance, have a Peloton bike right in my master bedroom at home, and it's one of the first things I do many mornings. I wake up, I meditate for a bit, then I knock out a short 20-minute ride in my undies, hard to do that at the gym, take a shower, and I'm in higher gear for the rest of the day. It's really convenient and has become something that I look forward to. So you have a lot of options. For one, if you like, you can ride live with thousands of other riders across the country on an interactive leaderboard to keep you motivated. There are also up to 14 new classes added every day with more than 8,000 classes on demand, and you can pick based on length, 45 minutes, 20 minutes, whatever, music, hip-hop, rock and roll, or say low impact versus high intensity or interval. You can pick the class structure and style that works for you. And in my case, I quite like Matt Wilpers, and I tend to do on-demand and listen to a lot of and watch many of the same classes over and over. But I'm kind of promiscuous and also enjoy classes from a lot of the other instructors. They have, Peloton, an amazing roster of incredible instructors in New York City with a whole range of styles and personalities, so you can find what you're in the mood for. You also get real-time metrics that you can use to track your performance over time, and that will help, I would say, catalyze you to beat your personal best. Now, that all sounds good, right? Gamification, yada, yada, yada. I didn't think that it would work for me or in any way incentivize me, but they really 100% hit the nail on the head. I was very, very impressed with how motivating it was, and it worked tremendously to keep me pushing, uh, which quite honestly takes a fair amount. I can get quite lazy, particularly with anything that edges on endurance, which is kind of more than five reps of anything for me. So check it out. Discover this cutting-edge indoor cycling bike that brings the studio experience right to your home. Peloton is offering listeners of this podcast a limited time offer. Go to onepeloton.com. That's O-N-E Peloton, P-E-L-O-T-O-N.com, and enter the code TIM, all caps, at checkout and get $100 off of accessories with your Peloton bike purchase. So get a great workout at home anytime you want. Check it out. Go to onepeloton.com and use the code TIM to get started. Why hello, boys and girls. This is Tim Ferriss, and

2. 5:26 – 8:26

   Tim introduces Jim Collins and what the conversation will cover

   1. TFTim Ferriss5:26

      welcome to another episode of The Tim Ferriss Show, where it is my job each episode to deconstruct, tease out the habits and routines, best practices, life lessons, and so on from world-class performers from many, many different disciplines. My guest today is Jim Collins, and this is a rare treat because Jim very, very seldom does any media or interviews whatsoever. I have wanted to speak with him for more than a decade, in fact, and it was worth the wait. This conversation over-delivered on every level I can imagine, and I really hope you enjoy it as much as I did. So who is Jim Collins, this mysterious, reclusive mastermind polymath? Jim Collins is a student and teacher of what makes great companies tick, and a Socratic advisor will Get a better idea of what that means, particularly in the beginning of the interview where he wants to ask me questions. So we do get to Jim's story, but he wants to and wanted to, even before we started recording, ask me a few questions. So let me get back to the bio. He is student and teacher of what makes great companies tick, and that is an understatement. He really has, has delved into the data. And a Socratic advisor to leaders in the business and social sectors. He's authored or co-authored eight books that have together sold more than 10 million copies worldwide. That's a lot of books, including Good to Great, Good to Great in the Social Sectors, Built to Last, How the Mighty Fall, Great by Choice, and his newest work, Turning the Flywheel, which gets into all sorts of details about the self-perpetuating, in some ways, models behind Amazon, Vanguard, and so on. Fascinating concept and, uh, very practical examples. Driven by a relentless curiosity, which you will get front row seats for, Jim began his research and teaching career on the faculty at the Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. In 1995, he founded a management laboratory in Boulder, Colorado. In 2017, Forbes selected Jim as one of the 100 Greatest Living Business Minds. And, uh, we talk about not just what makes good companies great, we get into that a bit, but really we're digging into Jim him- himself. We talk about how he tracks time, how he breaks up his day, his, uh, sleep optimization, his stories related to Peter Drucker, which are just amazing, and so on and so forth. Uh, he's also, as, uh, I might have already inferred, multifaceted and multi-talented. He's an avid rock climber, as one example, and has completed single-day ascents of El Capitan and Half Dome in Yosemite Valley. And if you don't know what that means, just take my word for it. It's very impressive. You can find more about Jim at jimcollins.com. And now, without further ado, please enjoy, and I certainly enjoyed it, please enjoy this wide-ranging conversation with none other than Jim Collins. [static] Jim, welcome to the show.

3. 8:26 – 14:01

   Jim flips the interview: Tim’s thesis, language acquisition, and how language shapes thought

   1. JCJim Collins8:26

      I'm really happy to be here, and, uh, uh, I'm, I'm hoping that you wouldn't mind if I start by exercising a bit of my own curiosity just to, to ask you some questions to begin our conversation.

   2. TFTim Ferriss8:39

      I would, I would love to jump into it any way that you would like. So I'm, I'm game for questions.

   3. JCJim Collins8:45

      So I, I, I, I'm dying to ask, what did you do your Princeton senior thesis on?

   4. TFTim Ferriss8:52

      My senior thesis, which took some extra time to complete, was on the, the phonetic and semantic acquisition of Chinese characters by native English speakers. And it was looking at language acquisition, but specifically what most people in the West would consider ideograms. And there are a few different layers of meaning or context for each character that one might acquire. So the thesis was about the different approaches, the pros and cons of various methods for acquiring these characters.

   5. JCJim Collins9:29

      And, and what is language acquisition? It's a, it's a, it's a major I've never quite heard of, and I'd be curious what its essence is.

   6. TFTim Ferriss9:38

      So within the East Asian Studies department, uh, you ha- you had to pick a primary language, and I, I chose Japanese because I had spent a year in high school in Japan going to a Japanese school as an exchange student. But I ended up taking primarily Chinese classes because my, my Japanese level was already decently high. And within the context of that department, language acquisition would be focusing on... And this is a really good-- It's a, it's a very good question because the way that I look at language is really acquiring concepts and a almost an operating system for thinking that is associated with a different culture. And that would generally, in, say, a language like Chinese and most languages, start with the phonemes, the sounds themselves. And in the case of something tonal like Mandarin, you're actually gonna be doing a lot of training. It's almost like going to the gym and lifting weights because to produce a sound like-

   7. JCJim Collins10:46

      Mm.

   8. TFTim Ferriss10:47

      Uh, or a word like ye xu, which is maybe, or if you want to ask with a retroflex of tongue, na shi shen me shi qing, like, what is that thing? You, you really need to develop musculature that you have not developed before as a native English speaker. And then after you've developed the basic, uh, the basic phonetics and pronunciation verbally, you would move into the writing. And for some scripts... And the writing tells you a lot about the thinking of a given culture, and I, I think of culture as, uh, sort of a collection of shared beliefs and habits. Uh, be- some are, are, are purely phonetic, like we have our Romanized alphabet, and then others have multiple layers, like Chinese, where you have a character that's composed of radicals, each of which has a particular, uh, connotation in terms of, uh, in terms of meaning and the, the etymology. So all of that is, uh, those would all comprise ingredients in the recipe that is language acquisition.

   9. JCJim Collins11:54

      And, and, uh, and, and forgive me for asking you a follow-up question on that. I'm just, I'm curious, just as you've clearly come from both a love of language but also a study of language, uh, how much do you think the language in which you are operating, uh, uh, whether that be mathematics or, or whether it be Japanese or Chinese or English, um, either constrains or, or enhances the concepts that we develop?

   10. TFTim Ferriss12:26

       I would say almost completely. I think, uh, the, I can't remember if it was, uh, uh, Wittgenstein or-

   11. JCJim Collins12:33

       Wittgenstein, yeah

   12. TFTim Ferriss12:34

       ... who said the, what is it?

   13. JCJim Collins12:35

       Yeah

   14. TFTim Ferriss12:35

       "The limits of our language are the limits of our world," or something to that, to, uh, to that effect. Uh, I, I really feel like language and thinking are inseparable. Uh, and therefore, part of the appeal to me in acquiring other languages, studying other languages, even if I only use them temporarily, uh, like I, I did when I visited Turkey or Greece, these places, I still study the languages very intensely because it gives you, i- in my experience, a different lens through which to process the world, and to absorb stimuli, and to react to things differently. Uh, so, so in my experience, um, you can, you can s- you can very often tell a lot about someone by not just the language they speak, but the particular dialect within that language that they choose. So that, that can apply to h- uh, English and the particular nuances or predilections someone has in their own, say, grammar, vernacular, even in a given family, but it can also apply to coding, and then within coding you have different coding languages.

   15. JCJim Collins13:47

       Mm-hmm.

   16. TFTim Ferriss13:47

       And they tend to reflect, in, uh, many instances, different personalities and different value systems, um-

   17. JCJim Collins13:55

       Mm

   18. TFTim Ferriss13:55

       ... different priorities. Um, so that's, um-

   19. JCJim Collins13:59

       Mm

   20. TFTim Ferriss13:59

       ... that's how I would, I would think about that.

4. 14:01 – 24:28

   Wittgenstein, writing craft, and lessons from John McPhee

   1. JCJim Collins14:01

      Yeah. I, you mentioned Wittgenstein. I, I am a no, uh, expert on Wittgenstein. I had a quarter in college, uh, which the main focus of, uh, th- the work I was learning in was in Wittgenstein, and I [laughs] remember the professor saying to me, "Well, what's marvelous about Wittgenstein is," he said something along the lines of, "He lays out very clinically what we can meaningfully talk about." Uh-

   2. TFTim Ferriss14:25

      Mm-hmm

   3. JCJim Collins14:26

      ... and, and then, uh, the professor adds, "And of course then there's the great punchline, which is that most of what's really important we can't talk about, so [laughs]

   4. TFTim Ferriss14:35

      [laughs]

   5. JCJim Collins14:35

      ... because, because the words can't go to the mystical." So-

   6. TFTim Ferriss14:39

      Mm-hmm

   7. JCJim Collins14:39

      ... um, uh, very, very interesting. And I've often thought about this when I wrestle with concepts as I'm wrestling, uh, in, in my own research. And one of the first questions I ask, people often ask me, we'll say, "How do you, how do you develop a concept?" Or, "How do you decide to come at something that would allow you to, say, you know, articulate something you're seeing through the lens of, say, the Level 5 hierarchy, or the preserve the core, stimulate progress duality, or whatever?" The first question I always ask myself is, what's the conceptual vessel, right? Because it, to, to get a concept, you, there's different kinds of concepts, right? You've got dialectics, uh, you've got hierarchies, you have stages, you have equations, uh, you have categories, right? And one of the first, most important things to do is to say, "Well, if you're looking at something, what's, what's the best kind of conceptual vessel?" And then from there you develop the concept. And now just one thing on, on language, um, it's not really about language per se, it's about the really hard, uh, world of writing. And as I, uh, was looking, uh, about your background, Tim, I, I noted, if I read it right, that you had crossed paths with one of our great nonfiction writers, John McPhee. Is that right?

   8. TFTim Ferriss15:54

      Uh, that is correct. I was very, very lucky and got to, uh, take a class called the Literature of Fact, which was-

   9. JCJim Collins16:01

      Yeah

   10. TFTim Ferriss16:02

       ... a seminar that McPhee, uh, used to teach. I don't know if he still teaches it, uh, but-

   11. JCJim Collins16:06

       Yeah

   12. TFTim Ferriss16:07

       ... uh, that, I did have a chance to spend some time with the incredible McPhee.

   13. JCJim Collins16:12

       Yeah. And, and I, and I, just b- before we launch into our, our broad conversation, I, I... What, um, what was it like to have a class from McPhee? I mean, I, I have never met McPhee, but I've been a, a huge almost student of how he writes. Of course, and I love the most recent, uh, work, uh, I think it's called Draft No. 4, where he describes to all of us who struggle with words, uh, the s- the struggle of writing. But he's got those great books from years ago, A Sense of Where You Are, about Bill Bradley, and he has the, the Archdruid book, and he has, uh, The Control of Nature, which recently with all of the, uh, fires and so forth happening in California, I actually went back to read to, to kind of remind myself of how McPhee was writing about these things before. And, and, and he had just such a marvelous way of being able to use words, uh, to really, uh, uh, exercise his curiosity and see things, and then put them in these marvelous forms. And, uh, and I've often thought, boy, if you could, like, learn from him how to write. So-

   14. TFTim Ferriss17:16

       [laughs]

   15. JCJim Collins17:17

       ... as a proxy for that, what, what would you... You know, as those of us who write-

   16. TFTim Ferriss17:22

       Mm-hmm

   17. JCJim Collins17:23

       ... we all know how hard writing is, right? Nobody would ever say writing's fun.

   18. TFTim Ferriss17:26

       [laughs]

   19. JCJim Collins17:27

       Um, what, uh, uh, what do you, what did you take from, from McPhee being able to really learn directly from him?

   20. TFTim Ferriss17:34

       [laughs] Uh, so I never get tired of talking about McPhee, although I worry about, uh, invoking his name in a sense because I feel like I, I'm, I'm such a shameful, uh, repetitive writer [laughs] full of all sorts of fluff compared to his tight prose. I, [laughs] I, uh-

   21. JCJim Collins17:54

       His, his prose is tight.

   22. TFTim Ferriss17:55

       [laughs] Um-

   23. JCJim Collins17:56

       I mean, he is the, he's the consummate version of that Twain, uh, line about, you know, the difference between almost the right word and the right word is the difference between a lightning bug and a lightning bolt.

   24. TFTim Ferriss18:08

       [laughs] Right. So I, so with, with the, with the sort of preface that I, I in no way compare myself to McPhee or claim to have had all of his magic rub off on me, uh, the class was, uh, was absolutely, uh- This is, this is me looking for the right word. Looking for the lightning and not the lightning bug.

   25. JCJim Collins18:30

       Mm-hmm.

   26. TFTim Ferriss18:30

       It, it w- I, I, I don't use this expression much, but it was really paradigm shifting for me in, in many respects when it came to writing and thinking. And, uh, I'll, I'll mention a few things before I directly answer your question. Number one is I've carried my notes from that class with me everywhere-

   27. JCJim Collins18:48

       Mm.

   28. TFTim Ferriss18:48

       Meaning in every place I have lived since I took the class, which would have been in probab- '98 or '99. So I've been carrying these notes for 20 years now. So that should tell you about how highly I value them.

   29. JCJim Collins19:02

       Mm. Mm-hmm.

   30. TFTim Ferriss19:03

       Um, the, the, the second is, uh, I remember very clearly, uh, when we had our first round of feedback on some initial writing task that we had been assigned. Maybe it was... We had three... I think it was th- like, three to five-page writing assignments each week, and we would have a seminar with all the students together, and then we would have one-on-one sessions with McPhee. And I remember the first time he handed out in class the red-lined versions of our assignments.
5. 24:28 – 35:28

   Choosing the right “conceptual vessel”: how Level 5 leadership emerged

   1. TFTim Ferriss24:28

      ... I'm gonna try to prioritize them a bit. But the, the conceptual vessel ... term that you used, uh, or phrase, I should say. Could you give an example of choosing the right conceptual vessel?

   2. JCJim Collins24:40

      Yeah. Uh, so, uh, uh, maybe I'll use a couple, but let me start with, um, with one.

   3. TFTim Ferriss24:48

      Yeah.

   4. JCJim Collins24:48

      Uh, so ba- back when we were working on the research for what became, uh, Good to Great, a little bit of a story of what was happening. When, when we went into, uh, the Good to Great research, and everything we do has a, has a research base to it, I had really given the research team the instruction that I didn't really want to have a leadership answer. And, uh, the reason for that is because I was always skeptical, especially from the Built to Last research, which had come before, of placing too much emphasis on having a single leader. Number one, if you're gonna build something truly enduring, it has to transcend the leader. They all go away. They all die. Uh, uh, you, you can't have a system based on a single leader. Um, and the second is, you can go around in a big circle where you can say, "Hey, uh, if that company was successful, it must have been a great leader." And then if it's not successful, you say, "They weren't a great leader after all," and you're just in a big circle. You're not learning. So I, I said to the research team, "I don't wanna study, uh, I don't wanna have a, a, a leadership answer." And my research team, which is usually composed of, uh, somewhat, uh, I would say, highly irreverent, smart people who just work really hard, and they love to challenge me. And we had these, these, uh, what we call, uh, uh, kind of research chimposiums because Curious George was our, is our, kind of our mascot, right, of curiosity. And we would have chimposiums. And, uh-

   5. TFTim Ferriss26:14

      [laughs]

   6. JCJim Collins26:15

      ... and, [laughs] and so we would, we would, we would be talking about the research, and one day the research team, uh, kind of essentially joined hands when I came in. And they, and I said, "What's up?" And they said, "We're gonna tell you today that you're wrong." I said, "Well, what about?" And they said, "Well, about this anti-leadership bias that you have. Uh, each of us, we're responsible for studying the Good to Great journey, the inflection of these companies that were average that, that made that leap, and, and, um, uh, and we see that at that point of inflection of the leader ha- played a huge role. And to ignore that is to ignore the evidence. You always tell us, Jim, pay attention to the evidence. We invoke that here today. You're wrong." And, and I responded to the team by saying, "Well, let me ask you a question. You remember your high school algebra?" And they all, of course, did. I said, "Remember, if you have the same variable in the numerator as the denominator, uh, the variable goes away." And so, uh, as a, as a relevant differentiator. And so, um, I went to the whiteboard, and I put a little, you know, line up there for the numerator and the denominator. And I put, um, good to great companies in the numerator and comparison companies in the denominator. Now, our research method, and, and this all gets to the conceptual vessel, but you kind of have to sort of know how we get there. So, uh, all, our research is always based, uh, on a method that I developed with, uh, a re- a great mentor of mine. And one of the themes, by the way, I think that's gonna come up in our conversation is what I see as the tran- the incredible role that who luck, right, the luck of the right people that intersect your life plays in the journey. And I had great who luck in a research mentor named Jerry Porras, uh, at Stanford when we were doing Built to Last together, and Jerry pushed us to develop this method where he said, "Look, if you study successful companies or companies that, uh, achieve certain things but you only study the successes, well, you're gonna find they all have buildings. Well, does that mean having buildings will make you-"

   7. TFTim Ferriss28:20

      [laughs]

   8. JCJim Collins28:21

      Right?

   9. TFTim Ferriss28:21

      [laughs]

   10. JCJim Collins28:22

       "... a successful company?"

   11. TFTim Ferriss28:23

       Right, right.

   12. JCJim Collins28:23

       And, and so he said, "What we have to have is a comparison set." And we d- developed this his- this, uh, historical method where you study the entire history of two evenly matched companies at the start of the journey that are in the same place, same time, same resources, same potential, and then one breaks out to a totally different level than the other and holds it long enough that you can have confidence in it. And the other that was a virtually identical twin at that time does not. And at the birth of any industry, for example, you have an explosion of new entrants, so all the early semiconductor companies. And in there you're gonna find a, a, a twin pair of companies that are virtually the same. But one of them becomes Intel, and the other one doesn't, right? So why? And so he said, "You always have to ask what's really different. Compared to what?" It's a, it adds huge amounts to the work, uh, just the, the magnitude of work you have to do to do the comparison because it basically more than doubles everything you do, but that's how you see. And of course, you find all the comparisons also have buildings. So buildings can't be the answer. So I went to the whiteboard, and I said, "Okay, so we have the good to great companies, had these remarkable people that led them through the transition. Well, let's look at the comparison companies." And started ticking through the list and found, oh, sure enough, the comparison companies had some remarkable leaders, and some of them were even really extraordinary leaders. I mean, Jack Eckerd, who had built Eckerd, and, uh, Stanley Gault at Rubbermaid. I mean, these were really, really good leaders. And so I, I wrote leadership in the numerator. I wrote leadership in the denominator. And I said, "Guess what? The variable drops out. We have it in both. It doesn't really matter as a variable. Now let's go back to work and do something useful." And, uh, and the team-

   13. TFTim Ferriss30:12

       [laughs]

   14. JCJim Collins30:13

       ... you know, th- that's the wonderful thing about smart, irreverent, young people.

   15. TFTim Ferriss30:17

       Yeah.

   16. JCJim Collins30:17

       They, they sort of closed ranks on me, and they said, "We knew you would do that to us."

   17. TFTim Ferriss30:22

       [laughs]

   18. JCJim Collins30:22

       So, [laughs] so we came prepared. And, uh, and this is when the team, this is the value of having a great research team, saw something that then led to this notion of the, of what eventually became the level five idea and the conceptual vessel for it. So the team said, "Jim, you're right." Both sets of companies, the good to greats and the comparisons, at the critical moment in time had leaders, and there's no evidence that the leaders were any less exceptional in terms of their pure leadership ability. But there's something different about the good to great leaders. They're cut from a different cloth. It's not about their personality. Many of them were shy, and reserved, and soft-spoken, never drew attention to themselves, right? Uh, uh, so it wasn't about that. There's something different about them, and that became interesting. And essentially what happened then was the question was what's the difference between these leaders? It wasn't leadership, 'cause they were both leaders who did leadership. There was something different about the leaders. And so th- there was the signature of their humility, and then their fierce will on behalf of something that's not about them. They were able to subsume their ego into the company, and that blend of humility and will is what stood out, and that was different from the comparisons. So that was interesting. So you kind of step back and you say, "Okay, now how do we capture that conceptually?" And I went out onto my porch and I started thinking, "Okay, is this just an idea? They're just humble leaders? No, that's not quite it. There's something about this duality. Is it a dialectic?" Mm, didn't seem to be quite right. And I started playing around with different things, and I, I had this flash that went through my mind of it's a hierarchy, and it's a pyramid of capabilities, and you kind of climb up this hierarchy. It was sort of almost like a Maslow's hierarchy except it was of leadership, and that there was a, there were levels to it. And I thought, "This is a hierarchy of levels." Level one would be individual capabilities, and so that would be at the base of the pyramid. And then you go from individual capabilities to level two, which is you get really good at playing well with others, right? Good team skills. And then level three, you would learn how to manage. And by the way, as an aside, never denigrate great management. Anybody who's had a poor manager knows [laughs] how awful that is to work for one and how great it is to work for a great manager. And then above level three becomes level four, and you go from b- managing to learning to lead. And then there was a higher level, and that higher level was the level five. And the level five, well you, you could be a leader as a level four. To be a level five leader, you had to go to the next level of the hierarchy and add in this ambition for something that's bigger than yourself with humility and with will. And that when you stand back and you looked at that, you could look at it and say the right way to convey this idea is as a hierarchy that you grow through as distinct from some other way. I had to kind of find the, the, the, the way of capturing, and then the critical thing is it's not leading, it's are you a five or a four, and here's sort of the overall pyramid. And just to illustrate, let me just invoke, uh, uh, um, w- somebody who wrote their Princeton thesis on what became a level five journey. One of the great leaders that I've gotten to know is Wendy Kopp, the founder of-

   19. TFTim Ferriss34:04

       Sure

   20. JCJim Collins34:04

       ... Teach For America, right?

   21. TFTim Ferriss34:05

       Teach For America. Mm-hmm.

   22. JCJim Collins34:06

       Yep. She wrote her senior thesis on it, which is why I'm always curious. I mean, Jack Bogle wrote his senior thesis on mutual funds and ended up creating an amazing thing. Uh, Wendy Kopp wrote, wrote hers on, uh-

   23. TFTim Ferriss34:17

       [laughs]

   24. JCJim Collins34:17

       ... uh, on what became Teach For America. But if you look at Wendy Kopp, if you were to ask the question, you know, where is she on that, well she goes, she went through all, all the levels and, but she's not just a leader. She has that extra dimension where she's got that genuine personal humility and an absolutely ferocious resolve for the overall cause that is not about her. And if anybody that's met Wendy or seen her, you would never think this is about Wendy Kopp. Uh, you would never think, uh, but if you ever doubted her resolve, right? You know, there's that image of her sitting there trying to get her first, uh, uh, uh, uh, funding for Teach For America, where her image is, "I put glue stick on the bottom of my pants and I would not leave the chair until I got a $25,000 check." I mean, just sheer will, and will for ultimately the kids and what, how the kids' lives could be changed, and yet genuine humility. And so she went to the top of the hierarchy. And so when I stand back, I look at it and say, "That's the right conceptual vessel for this journey of what we had seen." Now, other, other concepts-

   25. TFTim Ferriss35:25

       May I jump in for one second?

   26. JCJim Collins35:26

       Yes. Sure, please.

6. 35:28 – 40:26

   Measuring “genuine humility” with data: speeches, credit, and ‘window vs. mirror’

   1. TFTim Ferriss35:28

      The question was genuine humility. How do you identify genuine humility? What are the characteristics and how do you, uh, separate it from false humility-

   2. JCJim Collins35:40

      Mm

   3. TFTim Ferriss35:40

      ... or what someone presents as humility? I, I guess I'm, uh, wondering how you, how you-

   4. JCJim Collins35:46

      How we, how we, how we, uh, imputed that from the research data.

   5. TFTim Ferriss35:49

      Correct.

   6. JCJim Collins35:50

      Yeah, yeah. It's a great question. So, so first of all, in, in all of our work, uh, we start, not surprisingly, with, uh, a question of curiosity, right? It always has to be something, I just am really curious enough to go through the years of suffering to get some insights. And then you translate that into the research method, the, the comparison method, the historical method, and so forth, and then you collect vast amounts of information. So in the good to great... And, and, and the key is you're not looking for anything in particular. You're looking for patterns of difference. Why did one set of companies, what was different about them versus the others as you walk through time? And o- and/or what kinds of decisions they made and so forth, always going to that difference question. And, uh, and so what we began to notice is that the, uh, the good to great leaders- Was fascinating that number one, you can, you can do what's called event analysis. So you can do something like, say, let's call an event the number of times in speeches you use the vertical pronoun versus you don't over the course of a career. And y- that's something you can count, right? So you can look at it and say, let's take the good to great CEOs, and let's take the comparison CEOs and look at every letter they wrote that we can get a hold of. Let's look at every speech they ever gave, every interview they ever gave, right? I mean, you got mountains and mountains of information. Now let's go through and literally count how many times they tend to take credit themselves, how many times they give the credit to others, how many times they, uh, don't use the vertical pronoun I, how many times, uh, they, they do. Now, later, of course, if somebody had read level five, they could try to pretend to be level five. I'll never forget an email when somebody sended me an email that says, "Help." And I open it up and says, "Dear Jim, our CEO just walked in and announced he's level five. What do we do?"

   7. TFTim Ferriss37:58

      [laughs]

   8. JCJim Collins38:00

      [laughs] Have them reread the chapter. So y- I mean, it, it... But these were people that they were just doing what they were doing. I know they weren't trying to show themselves one way or another. That's the thing of looking over a course, I mean, en- entire history or career. You can count things. How many times did they allow themselves to be on the cover of a magazine? How many times, uh, when, when, uh, when they're in discussions about things that did not go well, right? You can look at window and mirror events, things that, that did not go well. Well, one approach is when something does not go well, you can point out the window and subtly or not so subtly attribute the reason it didn't go well the factors outside yourself, right? The economy or somebody let you down or a partner didn't come through or whatever it happens to be, but somehow it's not you. Or there's the window approach, which is your kind of natural tendency is all that might be true. It doesn't change the fact that I'm responsible, uh, and I own this, and this is the mistake I made and so on and so forth. And you can look, and again, it's comparative. What did the comparison CEOs do? You can count a lot of events of some version of pointing out the window. What did the good to great CEOs do? You can count a lot of versions of pointing in the mirror. And so you begin to add all this up, right? And over the course of decades, 'cause we, we look sometimes over fifty, 60 years, uh, and some CEOs were in harness for multiple decades. That then... And, and since they're all publicly traded companies, people often ask, "Well, why do you only study publicly traded companies?" My answer is, "'Cause that's where the data is," right?

   9. TFTim Ferriss39:42

      [laughs]

   10. JCJim Collins39:42

       It's not because-

   11. TFTim Ferriss39:43

       Right

   12. JCJim Collins39:43

       ... I mean, because that's, that's the beauty. They all have to report the same way. They all have annual reports. They all have earnings calls. They all have all these things over time that you can then use as data sets. I'm never... I'm not really a business author. I just happen to have used companies as the method to study human systems-

   13. TFTim Ferriss40:01

       Mm-hmm

   14. JCJim Collins40:01

       ... because there's great data. And, uh, and so that's where the data is. And if you do that, and we have 6,000 years of combined corporate history in the research database, pretty soon you can start counting a lot of things, and then you can begin to say there's a substantial amount of quantitative evidence that adds up to a greater level of humility in these than those, and that's how you get there.

7. 40:26 – 55:18

   Jim Collins’ daily tracking system: creative hours, the 1,000-hour floor, and mood scoring

   1. TFTim Ferriss40:26

      May I ask you a question about counting?

   2. JCJim Collins40:29

      Yeah.

   3. TFTim Ferriss40:29

      All right. So I, we, we have a number of books we could talk about, and we are gonna talk about some of them, but Built to Last has a subtitle, Successful Habits of Visionary Companies.

   4. JCJim Collins40:38

      Yeah.

   5. TFTim Ferriss40:39

      I'm very fascinated by what might be the successful habits of Jim Collins, and this is a question about counting.

   6. JCJim Collins40:47

      Mm-hmm.

   7. TFTim Ferriss40:47

      In the course of doing some of the homework for this conversation, uh, I have come across different ways that you seem to measure your time-

   8. JCJim Collins40:56

      Mm-hmm

   9. TFTim Ferriss40:57

      ... and your days, and I'd love to explore that for, for just a little bit. Um-

   10. JCJim Collins41:01

       Sure

   11. TFTim Ferriss41:01

       ... so the, the first was I read that you had, and this may have evolved or changed by this point-

   12. JCJim Collins41:07

       Mm-hmm

   13. TFTim Ferriss41:07

       ... but a stopwatch with three timers in your pocket.

   14. JCJim Collins41:09

       Mm-hmm.

   15. TFTim Ferriss41:10

       Uh, can you... A- and that it was-

   16. JCJim Collins41:13

       Yeah

   17. TFTim Ferriss41:14

       ... in, sort of indicative of creative teaching and other. Uh-

   18. JCJim Collins41:17

       Yes

   19. TFTim Ferriss41:17

       ... but could, could you explain, uh, that habit, please, for people who-

   20. JCJim Collins41:23

       Oh, sure

   21. TFTim Ferriss41:23

       ... are not familiar?

   22. JCJim Collins41:24

       Well, so actually, let me tell you the story of how it began-

   23. TFTim Ferriss41:27

       Yes, please

   24. JCJim Collins41:27

       ... what the three were about, and then how it's evolved into something a little simpler and a little more powerful in what I do with it every single day.

   25. TFTim Ferriss41:34

       Perfect.

   26. JCJim Collins41:34

       So I, I don't wanna pretend that I'm normal, okay?

   27. TFTim Ferriss41:38

       [laughs]

   28. JCJim Collins41:38

       So what I'm gonna describe is, is not normal behavior, but this is, this is it. So when I, uh, when I was 36 years old, uh, I made the decision, and we can come back to this later if you wanna talk about big bets and doing scary things, uh, such as betting our career, betting our lives, Joanne and I, on a entrepreneurial path. Uh, let me just kind of step back and sort of share the origins of this. Um-

   29. TFTim Ferriss42:01

       Mm-hmm. Yep

   30. JCJim Collins42:02

       ... so I was teaching at Stanford, and I, I... It was a marvelous journey, and of course, I had great mentors and learned how to do my research there. That's where Jerry and I did Built to Last. But I had a- another mentor who encouraged me to think about whether I wanted to do a self-directed path or not. And I used to say to my students, because I taught entrepreneurship and small business, uh, I, I always said to my students, "Why don't you go do something on your own? I mean, why give over all your creative energies for somebody else's thing?" I would at least challenge them to think about that. And I would say, "If you're really interested in business, you don't have to go to work for IBM to be in business. You can do your own." So my students, this is the wonderful thing about great students, they hold you to account, right?
8. 55:18 – 1:07:15

   Finding patterns with the data: ‘more of this, less of that,’ flow state, and relationships

   1. TFTim Ferriss55:18

      ... it makes perfect sense. What are some of the, the patterns that you've found for, for either the do more column or the do less column?

   2. JCJim Collins55:25

      Mm.

   3. TFTim Ferriss55:25

      For yourself.

   4. JCJim Collins55:26

      Yeah, so, so when I look at those patterns, uh, I would say on the plus twos, there are, um, almost two contradictory components and... Not contradictory, but they're just really different flavors. One is the solitude of really hard work. And sometimes o- one of my favorite days will be I get up, I never leave the house, uh, and I basically get to just lose myself in the research or in the writing, uh, or in the making sense of things. It's a very, an incredible simplicity of the day. A- as I, as I've, as I... I'm 61 now, and I think about w- well, what comes next, and I, I intend to keep creating. I wanna stay in some version of that march for a really long time. My, my role models have all done that. But I think about life as having three f- uh, three things at least I think are really important, and one of them is increasing simplicity, just sheer simplicity. Two is time in flow state, and flow state's not easy. And the third is time with people I love. And, uh, and, and so when I look at the, um, at those plus twos, they have a lot of, a lot of the days would be days of high simplicity. Not much happened. There were very few moving parts. But a lot of deep, hard work in flow state. I might've been writing or doing a concept or, or creating something or... I mean, just you're lost in the work.

   5. TFTim Ferriss57:10

      Or rock climbing probably.

   6. JCJim Collins57:11

      Or rock climbing. Exactly, exactly. It's arduous, but you're lost in it. Those are great. The other, though, for me, is the time with people I love. And the other dimension, while I wouldn't describe myself as a highly social type person, I love the solitude of the hard work, the other side is, um, there are... The people in my life, and there are many, I have great friends, really great, great friends that, many decade friends. Friends back to third grade, seventh grade, all my college roommates. I mean, my personal band of brothers. I mean, I have friends. And, um, and, and my wife, we've been married 38 years. Uh, got four da- engaged four days after our first date. Um-

   7. TFTim Ferriss57:54

      What? Four days-

   8. JCJim Collins57:55

      Yeah

   9. TFTim Ferriss57:55

      ... after your first date?

   10. JCJim Collins57:57

       Yes, that's true.

   11. TFTim Ferriss57:58

       Wow.

   12. JCJim Collins57:58

       And, and-

   13. TFTim Ferriss57:59

       Okay

   14. JCJim Collins57:59

       ... um-

   15. TFTim Ferriss57:59

       We, we might come back to that

   16. JCJim Collins58:01

       ... we might.

   17. TFTim Ferriss58:01

       [laughs]

   18. JCJim Collins58:02

       But, uh, but the, but the thing is when you have those days where you're really present and engaged with people you really love, those are plus two days. They, you may not have accomplished anything, or in the case of climbing, it might be that I went out climbing with one of my best friends, and I don't even necessarily remember the climb. It was with a friend.

   19. TFTim Ferriss58:24

       Hmm.

   20. JCJim Collins58:25

       And so my plus two days, uh, are either very solitude or very connected, but connected to people that have these long, enduring, really, really wonderful relationships in life. And those make plus twos.

   21. TFTim Ferriss58:40

       I love it. You, you at some point in life need to meet my friend Josh Waitzkin who you and he have very similar heuristics. Uh, he was the basis for the book and the movie Searching for Bobby Fischer.

   22. JCJim Collins58:55

       Mm.

   23. TFTim Ferriss58:55

       So his first life was in chess, but I, I, I won't, I won't take us too far off track. But at some point, uh, I think you guys would really, really get along. Uh, okay, let me dive into a couple of clarifying-

   24. JCJim Collins59:09

       Yes

   25. TFTim Ferriss59:09

       ... questions if I may. Because this is-

   26. JCJim Collins59:11

       Sure

   27. TFTim Ferriss59:11

       ... this is, this is so juicy, I can't, I can't... I, I don't wanna just move on to the next thing.

   28. JCJim Collins59:15

       We're gonna have all these people now creating spreadsheets.

   29. TFTim Ferriss59:18

       [laughs] I was gonna say, if this writing thing doesn't work out for you, you, you should create [laughs] ... You have, you have a spreadsheet company. You have a journaling company available to you. Uh, creative, so this is a word that means different things to different people. What are the main activities or what are some of the activities that are squarely in the, the creative bucket for you? And the reason I'm asking is I'm thinking of how I spend my own time. And, and you have a team. I've, I've, I suspect, a much smaller team. But for instance, if you are working on a book that requires interviews, would spending time scheduling those interviews count as creative or-

   30. JCJim Collins59:56

       Hmm
9. 1:07:15 – 1:14:55

   Sleep as a third of life: sleep lab testing, 10-day totals, and napping strategies

   1. TFTim Ferriss1:07:15

      Uh, sleep tracking.

   2. JCJim Collins1:07:17

      Yes.

   3. TFTim Ferriss1:07:17

      So you mentioned sleep.

   4. JCJim Collins1:07:19

      Yeah.

   5. TFTim Ferriss1:07:19

      How do you note or modify or have you modified your sleep? W- w-

   6. JCJim Collins1:07:25

      Mm.

   7. TFTim Ferriss1:07:25

      Can you talk to us about... Uh, but I think most people-

   8. JCJim Collins1:07:29

      Mm-hmm

   9. TFTim Ferriss1:07:29

      ... would agree it's important, but how, how have you monitored and, and modified your sleep?

   10. JCJim Collins1:07:35

       Well, again, so [laughs] I, I'm not normal, okay? [laughs]

   11. TFTim Ferriss1:07:42

       [laughs]

   12. JCJim Collins1:07:42

       And, and I mean-

   13. TFTim Ferriss1:07:43

       That's precisely why I'm asking you these questions.

   14. JCJim Collins1:07:45

       [laughs] No, but I, uh, but, but one of the things that struck me a number of years ago, uh, is that we spend so much time thinking about time management, and I'm not really a... I mean, even though I describe this counting and stuff, I'm not really a time management sort of person. I'm a... Like, I don't, I don't have kind of a, "I have to organize my time a certain way," or whatever. You know, like that thousand creative hours, as long as I stay there, there's millions of ways I can get there, right? So I'm... It's, it's like a, it's like a constraint within which now I can have a ton of freedom, right? So I'm not overly regimented. I'm just disciplined, and there's a big difference. And I, I, um... Until when I was... I was thinking, "Well, wait a minute. If a third of our lives approximately are spent related to sleep, why don't we put as much thought into time management of sleep as we do into the rest of our day?" I mean, it, it, it, it's just ignoring a huge piece of it. So one of the things I did was, without, to my knowledge, having a sleep issue, I... and my sh- and my insurance wouldn't pay for this or anything. I just was curious. There's a sleep center at, I think it's the National Jewish Hospital here in, uh, in Denver. They have a sleep lab where they'll do sleep tests and stuff, and I just said, "Hey, can I come and get sleep tested?" And so I went down there and just scheduled myself in and spent the night and had them put the electrodes on. And I kind of feel like I'm my own rat in life, my own lab rat, why I'm always studying myself somehow, right? And, and this... Uh, I used to have a little book called The Bug Book, where I'm the bug and I'm studying the bug called Jim. That's how I figured out where I was gonna go in life. And so anyway, so I went down to the sleep lab and, and I said, "I'm gonna study..." S- to study sleep is too strong of a word. "I'm gonna be a student of the science of sleep." And so, because it's a third of my life, I... why don't I understand it? So I, I got the sleep test and I found out I didn't have any, you know, serious sleep pathologies. I learned about the different aspects of sleep. And what the big takeaway I got about sleep was we tend to think of this idea of, you know, seven hours a day or eight hours a day. And what I learned from this little journey, and I'm... again, I want to underscore, it's not like I'm a r- a sleep expert or anything or... I'm just trying to figure it out for myself, is it's actually the number of hours that you get over, say, a 10-day cycle. So if, if you go up and you, you do a big climb, like when, uh, Tommy and I did, um, our climb on El Cap together and do it in, in a day, that means 24 hours. You're gonna be awake for 36 hours. And so if you're basically like, "Oh, I couldn't do it without sleep," well, you're never [laughs] gonna do it. You can perform at really high levels with zero sleep over a day. You wouldn't wanna do it over 10 days, though. And so the, the... What, what I, I started thinking was what really matters is the q- amount of quality sleep I get over, say, a 10-day cycle. So early on, after all this, I actually started counting, and I would count naps, and I would count to just try to keep, again, very much like the 20 mile march of the creative hours. As long as I was staying above 70 over a 10-day cycle, however I got there, that was fine. Uh, I've since found that, um, uh, what really... I, I'm, uh, I probably still hit that number, but having counted it for about a decade meant that I ingrained the patterns of how to come at it. And what I've learned is, I guess, three, two or three things specifically about, about the sleep process for me. This is just personal. One, the 20-minute rule. If you wake up in the middle of the night and you check the time... First of all, it's also, by the way, fun to see if you can guess what time it is, right? Uh, but then check the time, and then, um, and then if you're not back to sleep in 20 minutes, get up and go. And then I love... I'll sometimes go lose myself in, again, back to the simple work or whatever. There's something really quiet. I get up at 3:00 or 4:00 in the morning and just, you're just there with the creative stuff you're doing. That's a great time. Uh, sometimes you wake up at 3:00, sometimes you wake up at 7:00. The second is, for me, I'm really, really lucky. I have the genetic ability to nap in any situation. I took a nap. I woke up eight minutes before our conversation today.

   15. TFTim Ferriss1:12:04

       [laughs]

   16. JCJim Collins1:12:06

       I'm serious.

   17. TFTim Ferriss1:12:07

       Yeah, I, I know you are.

   18. JCJim Collins1:12:08

       And, uh [laughs] and, and I... And, and so for me, my, my little secret, uh, extra capability that I just was born with was I can nap pretty much anywhere under any conditions, and I can dream. You give me 12 minutes, I'll dream. If you give me tw- 55 minutes, I'll dream, and I can wake up and, boom, be fine. It's just genetic, but naps are my sort of saving... Like, they, they give me this sense of like, ah, whatever happens, I'll be fine, because I can always close my eyes. I, I, I-

   19. TFTim Ferriss1:12:39

       When, when do you nap?

   20. JCJim Collins1:12:39

       I can nap sitting up. When?

   21. TFTim Ferriss1:12:41

       When, when do you choose to nap?

   22. JCJim Collins1:12:43

       Well, I have two favorite times of napping. Uh, three favorite times of napping. Uh, one is, uh, airplanes are great for napping. So, uh, you never... I never eat anything on a plane or, you know, do any of that. I, I, I'm either trying to do something creative or sleep, and I have... I, I really... I have a sleeping kit, uh, which includes those Bose noise-canceling headphones and, uh, eye covers and a donut pillow that the headphone can go in so that... You know, it's actually, like, really, like, kind of creating a microenvironment, so you can sleep on an airplane or wherever you happen to be. Uh, the second place, if I'm not traveling, which I try not to do too much anymore, uh, afternoons are great for a nap because you have a really good morning, and then you just... And then you get a s- that wonderful afternoon glow of, of creative time. Sometimes if you took a nap from, say, 2:00 to 3:00 or 3:00 to 4:00, and then you have that marvelous, like, 4:00 to 7:00 in the evening, and it somehow coincides with the end of the day, that can be a... It's like a second morning. And my... But my favorite absolute sleeping pattern is, uh, oh, so when Joanne's doing one of her bike rides across the country, and she's gone for six or seven weeks doing it, I'll fall into a pattern where on a lot of days I'll go to bed at 11:00 and get up at 3:00. I'll roll out of bed, and then I'll, I'll do the creative work stuff, usually creative or preparing teaching, from, say, 3:00 till 7:00. You don't eat anything. You don't drink anything. You don't have a cup of coffee. You just go roll right in. And then you go back to sleep from 7:00 or 8:00 until 10:00 or 11:00. And if you've ever been under general anesthetic, that second sleep is like general anesthetic.

   23. TFTim Ferriss1:14:26

       [laughs]

   24. JCJim Collins1:14:27

       I mean, you blink and it, and it's just that, that deep, dark bang, and all of a sudden three hours are gone. And then I get a second morning, 'cause mornings are the best. I get a second morning when I get up, and then you have breakfast, and then you get this really great energetic day. That, for me, is a perfect sleep day.

   25. TFTim Ferriss1:14:47

       Wow. I, I have these things I'm dying to get to, but then you keep bringing up interesting things-

   26. JCJim Collins1:14:53

       [laughs]

   27. TFTim Ferriss1:14:53

       ... which I f- I-

   28. JCJim Collins1:14:54

       Well, go ahead. Go with whatever you want to do.

10. 1:14:55 – 1:24:26

    The ‘Bug Book’ and the personal Hedgehog Concept: discovering what you’re encoded for

    1. TFTim Ferriss1:14:55

       No, no, I squarely blame you for that, but I'm glad you're doing it. The bug book.

    2. JCJim Collins1:15:00

       Yes.

    3. TFTim Ferriss1:15:01

       You, you mentioned it in passing. What [laughs] ... Uh, what is the bug book? Could you please elaborate-

    4. JCJim Collins1:15:07

       Yeah

    5. TFTim Ferriss1:15:07

       ... on the bug book?

    6. JCJim Collins1:15:08

       On the bug book. [laughs] So, uh, when I... Uh, I think a, a lot of us, and I, I certainly was one of them, have a w- kind of the... W- We struggle in our 20s to get clarity about how to deploy ourselves i- in the world. And... 'Cause everything up until you've kind of finish, you know, high school or college or graduate school, whatever, it's kind of structured. You don't really have to think about it. It's like, "Oh, I gotta, I gotta figure out how to do these math problems," or whatever. And but life isn't really like that. And then all of a sudden you hit, hit life, and life is much more ambiguous, and so you're trying to navigate through it. So I, I, like a lot of people, was, was trying to, you know, figure out how best to deploy myself in my 20s, and I had multiple things that helped me do that. But, um, uh, one of them... Let me just introduce a concept, okay? And then I'll tie it into the bug book, 'cause this is how I challenge young people to think about it. There's a concept in Good to Great called the Hedgehog Concept. And the idea of the Hedgehog Concept is, is to sort of simplify down... We found it by studying companies, and we found that when they really focus on one or a few really big things and made very disciplined decisions over time, those would accumulate and begin to build some real results and eventually what would become the flywheel effect, which we'll chat about a little bit later. And the Hedgehog Concept is the intersection of three circles, and for, for a company, it's doing what you're deeply passionate about, because if you're not passionate about it, you can't endure long enough to really, really do something exceptional. Two, uh, it, it's ma- the second circle is what you can be the best in the world at. And if you can't be the best in the world at it, leave it to others. So for example, it doesn't mean being big, right? You could have a truly great local restaurant. It's never going to be big, but it's the absolute best in the world at a particular thing that it does in its specific community, right? That... And, uh, no large company could come in and be better than them at that, right? That's very hedgehog, even though it's not big. And then the third is that you have an economic engine, and you know how it works. And so if you have the intersection of those three, our e- energy is going to go into things that we're passionate about and we can be the best in the world at and that drive our economic engine, you're in your hedgehog. Now, there's a personal analogy to the hedgehog, and this gets back to the bug book. I'm not a big believer in sort of thinking of traditional careers. I'm a big believer in thinking of finding your hedgehog and then really building flywheel momentum with that over time. And so as a, the personal version of the hedgehog is, again, doing circle one, what you're passionate about and love to do, the kinds of stuff that when you do it, you say, "I sure hope I get a long life, because I really love doing this." The second circle isn't best in the world, because if you said, "Well, if I can't be the best orthopedic surgeon, I won't do it," well, then we'd only have one, right? That's not good, right? [laughs]

    7. TFTim Ferriss1:18:18

       [laughs]

    8. JCJim Collins1:18:19

       So, so, so it's what you are encoded for. And what you are encoded for is different than what you're good at. So when I went to, to college, um, I thought I was gonna be a mathematician, because I was one of those kids that was good at math, and that's why I majored in math sciences. But then I met, at Stanford, the people who are genetically encoded for math. They were not me. I was good at math. They were encoded for math. It's like being an athlete where you thought you were a good athlete till you met the incredible natural gifted athlete and you realize, "I could never see to spin to the basket like he did," or, "I could never see to put the ball there running down the field playing soccer the way she did." I just wouldn't have seen it. It was a gift. That's the encoding. And so you have to find what you're encoded for as distinct from just what you're good at. And then the third is you have an economic engine, and you can theref- and you can fund your goals, your objectives, the things you're trying to get done. When you have all three of those, I'm passionate about it, I'm encoded for it, and I have an economic engine in it, now you're in your hedgehog. Now, when you're in your 20s, there's all these sort of paint-by-numbers kits approach to life, right? You can be a professor, you can be a businessman, you can be a lawyer, you can be whatever, right? And the nice thing about a paint-by-numbers kit is you actually don't have to think about it that much because as long as you stay in the lines and you, and you paint it, you're gonna end up with a nice picture at the end. But the only way to paint a masterpiece is to start with a blank canvas. And, and that is sort of figuring out those three circles and then making your own unique series of decisions consistent with the hedgehog of those three circles, and they may or may not fall into a traditional bucket. And so I was trying to find my way, and I started this little book, and it was inspired by a mentor named Rochelle Myers, who, um, uh, suggested that what I do is I study myself like a bug. And imagine with dispassionate objectivity as you're going through life, you're making notes where you're observing the bug called Jim, but very scientifically, clinically. And so I remember I was, uh, I was w- working, uh, at HP for a couple years out of graduate school. Great, great company at the time for sure, but I wasn't really constructed to be in a large company, but I was trying to navigate my way, and one day I had to give a presentation on how network computers work, and this was back in the 1980s when it was early on in that. And I had to figure out how to communicate to everyone really the essence in, on our team of how network computing was gonna work and how it fit together, and I had to sort of conceptualize it, and then I had to teach it and, and share with... All of a sudden, I had this day where it's like, wow, that was really fun to figure it out, to figure out how to conceptualize it, to figure out how to put it in concepts everybody can understand, to share it with everyone, to teaching it. My bug book, when I'm then writing, "The bug Jim really loves making sense of something difficult, breaking it down into understandable pieces, and teaching it to others." It was an observation in the journal. The other thing is, might be something like, "The bug Jim would really, uh, languish if he had to spend a lot of time in senseless meetings." This is not good, [laughs] right? And so I would... I... And, and constantly observing, and then eventually that allowed me to, to... It was that sort of observation, clinical, that allowed me to eventually sort of head back to teaching at Stanford when I was 30, which then became really the start of the, the, the, the real journey of what happened.

    9. TFTim Ferriss1:22:25

       With the bug book, did you write things in the bug book each evening? Did you do it, keep it in your back pocket, and when there was a, uh, out- uh, like an outlying impactful or emotionally notable event, you'd write in it? W- what was the structure-

    10. JCJim Collins1:22:44

        I-

    11. TFTim Ferriss1:22:44

        ... to how you used it, if there was any?

    12. JCJim Collins1:22:46

        At that time, and I'm, I'm more now just kind of in the coding we described earlier, 'cause I'm, I'm one of those really lucky people that I found this stuff early, and I remember the moment I hit the classroom at Stanford, first teaching in a small business and entrepreneurship class. I just knew I'm home. I'm in the three circles. Like, this is, I know, is going to guide in some version, some permutation of this probably for the rest of my life, and I just knew it. But until then, I had to kinda get to where I could see that. And so for those years, uh, I would say if I... I bet if I went back and looked at them, and I haven't done that, they're in my basement, uh, I'll bet you that probably five out of seven days there's reasonably thorough entries in there.

    13. TFTim Ferriss1:23:32

        Hmm.

    14. JCJim Collins1:23:32

        And, uh, and, and those entries would also be things like noting, uh, sort of projecting out, and a lot of it was often what I would describe as pattern recognition, where you'd n- be noting things, but I would also always be scanning for people that I could see them, older, people much older than me, and I could... And, and the question is I could somehow picture that some version of what they do somehow resonated, and I would note that. What was it about it that resonated? Why did I look up to that person? I'd spend a lot of it not just on my own experiences, but also very much on people that I admired. Very... Not people from afar, people I, I knew and observed, not for their achievements, but something about the quality of what they were, and that was a, also a big part of that, that observation process.

11. 1:24:26 – 1:39:37

    Peter Drucker: who-luck, preparation, and ‘how to be useful’

    1. TFTim Ferriss1:24:26

       O- okay, this is the perfect layup segue, so thank you for what you just said, to a follow-on to you mentioning that you're 61 years old.

    2. JCJim Collins1:24:36

       Yep.

    3. TFTim Ferriss1:24:37

       And, uh, I read in a piece in The Irish Times, and you can feel free to fact-check this, but you, you're quoted as saying, you know, "The big years are 60 to 90 to me."

    4. JCJim Collins1:24:47

       Yep.

    5. TFTim Ferriss1:24:47

       "I want to dwarf what happened before this with what comes next." And in between, that quote was broken up into two pieces. It says, "He adds, pointing out that when he first met Peter Drucker, then aged 86, the Vienna-born sage still had 10 books left in him." So w- McPhee is to you in a way, wanting to know what it was like to study under him-

    6. JCJim Collins1:25:11

       Mm-hmm

    7. TFTim Ferriss1:25:11

       ... uh, Peter Drucker is to me.

    8. JCJim Collins1:25:13

       Yep.

    9. TFTim Ferriss1:25:13

       So I have a copy of The Effective Executive. I've read it more times than I can count. I'm fascinated by this man, but have never actually spoken to anyone-

    10. JCJim Collins1:25:21

        Hmm

    11. TFTim Ferriss1:25:21

        ... who has spent any time with him. Can you-

    12. JCJim Collins1:25:23

        Hmm

    13. TFTim Ferriss1:25:24

        ... c- would you mind just explaining who-

    14. JCJim Collins1:25:26

        Mm-hmm

    15. TFTim Ferriss1:25:26

        ... uh, who he is for people who don't know, and then Just talking about your, your history with Drucker

    16. JCJim Collins1:25:32

        Mm. Well, first of all, in The Effective Executive, I, I was, uh, very honored to have the opportunity to, uh, write the forward to the 50th anniversary edition. To be-

    17. TFTim Ferriss1:25:45

        Oh, no kidding.

    18. JCJim Collins1:25:45

        Yep, yep. And, uh, I'd, um, uh, you might wanna look it up because, uh, I stood back and I said, I essentially said, "I'm gonna distill, you know, 10 things I learned from Peter Drucker," uh, in that forward, some of which tie into The Effective Executive, but some were sort of broader than that. And it was very interesting to sit down and sort of think about some of those, some of those things I learned from Peter. So, uh, I'll just sort of intersect a little bit with, with Peter, and, and Peter was, um... Boy. Uh, so let's talk about who luck, okay?

    19. TFTim Ferriss1:26:19

        Yes.

    20. JCJim Collins1:26:20

        And an intro to that. I have been so who lucky. And, and it didn't start that way because I, um, didn't really have a great relationship with my dad, and then, and I, um, and he died young and, you know. And so I kind of decided I would sort of create my own father by reading biographies and, and, and people that I would really look up to, and I formed a personal board of directors, came up with that idea in the 1980s, and started putting people on it. And so I would, uh, and they were often people who I just admired for their character, right? More than their accomplishments. And, and I would let them kinda, kinda shape me. Um, and I hope a little bit later we might have a chance to talk about one really amazing person in that, a fellow named Bill Lazier, one of my, my mentors I, I learned from. But Peter, uh, was a person who I just... If, if somebody said to me... Well, somebody did say to me. So a fellow named Tom Brown from Industry Week magazine way, way back when, well, we, uh, well, I don't even think we'd published Built to Last yet. Uh, he did a interview with me and Jerry at Stanford and, and he said, "Well, who, who's most of a role model for you that you would most look up to?" And I said, "Peter Drucker." He said, "Why?" I said, "Well, because he really asked big questions." And, and so Tom, unbeknownst to me, had previously interviewed Peter for something, and he calls u- up Peter and he says, "There's this guy, uh, he's maybe is gonna take his own path. Uh, he really admires you. He's 35 years old. He's up there teaching at Stanford. Would you be willing to m- to spend some time with him?" So out of the blue, I get this voicemail.

    21. TFTim Ferriss1:28:05

        [laughs] Oh, God.

    22. JCJim Collins1:28:07

        Okay? [laughs] I get this voicemail, and I, I, I, I, I hesitate to try to mimic the Austrian accent, because I'll, I'll, it'd just sound terrible. But it's something along the lines of, "This is Peter Drucker." Right?

    23. TFTim Ferriss1:28:21

        Yeah.

    24. JCJim Collins1:28:21

        It's coming through my voicemail. And, and he says, "Would you please give me a call? I would love for you to meet with me."

    25. TFTim Ferriss1:28:28

        [laughs]

    26. JCJim Collins1:28:29

        Okay. So he's almost exactly 50 years older than me at this point. I'm, I'm heading to 36. He's, he's heading to 86. And I, I call him back from the Seattle Airport. And, uh, and I call him up and, and I said, "Mr. Drucker, th- th- this is Jim Collins." And, and he, he yells into the phone, "Speak up! I'm not young anymore!"

    27. TFTim Ferriss1:28:50

        [laughs]

    28. JCJim Collins1:28:51

        [laughs] And so I'm yelling into the phone, right?

    29. TFTim Ferriss1:28:54

        [laughs]

    30. JCJim Collins1:28:55

        And so we arranged this day, and I think it was December 10, 1994, if I recall correctly. And I get on a plane and I go down to Claremont. Uh, and by the way, this is just as, let me just pause here for something for anybody, you know, you, anyone that's listening. If somebody is willing to give you mentor time like that, you owe, you owe it to them and to you to go prepared, and then to do a lot of writing after. So I put, uh, an entire couple, three days into preparing for being able to meet with Peter. And then when I came home, I st- I still probably have, I'm sure, my notes. I mean, I sat down and j- uh, and I just processed and wrote and wrote and wrote everything I gleaned from that meeting. And there were others, you know, interactions later, but, but that meeting. And that, that notion of you, you owe them the respect of going prepared. It's not like, "Hey, I wanna hang out. Let's network." It's not like that, right?
12. 1:39:37 – 1:59:54

    Turning the Flywheel: why transformations aren’t ‘miracle moments’ and how to map momentum

    1. TFTim Ferriss1:39:37

       We have, we have, we have many, many, many avenues that, uh, we can go down. Hopefully, this is not the f- the first and last time that we have a chance to have a conversation like this. But, uh, I want to define a term that's come up a few times already now.

    2. JCJim Collins1:39:55

       Mm-hmm.

    3. TFTim Ferriss1:39:56

       And that is flywheel.

    4. JCJim Collins1:39:57

       Yep.

    5. TFTim Ferriss1:39:58

       And, uh, you have a monograph, a new monograph, which is out, Turning the Flywheel, uh, subtitle, A Monograph to Accompany Good to Great. B- but let's start with the term flywheel itself. What is a flywheel?

    6. JCJim Collins1:40:12

       So, um, and, and, and also describe why I chose to put creative hours into this because there's lots of other things that are in the pipeline still and things that haven't gotten out. Why flywheel extension? Uh, uh, since the flywheel chapter already exists in Good to Great, what... Why would I then write a monograph? So, so the, uh, the idea behind the flywheel, so we were looking at... Let's go back to Good to Great. We're looking at... The, the question was, why do some companies make the leap from good to great, and others, right, who are the same, do the comparison set, have situation at moment in time, resources, industry, customers, did not, right? So it's always the difference. And when we went into it, I had this bias towards believing that a dramatic transformation would happen in a dramatic way. And, uh, and sort of thinking that there would be an aha moment, a miracle moment, a point of breakthrough. Uh, uh, you could really sort of see, you know, there's, there was this grand thing that happened, and that was sort of an assumption. I don't know if I had it so explicit, but it was kind of in my mind. And then when we started interviewing, we were very lucky because we got to interview all the key executives, many of whom are no longer with us, but that were, that were still alive, uh, that had been on those teams when they made those leaps, right? "So what was it like when you were there? What was, what was happening when you were there?" We, we coded all the research and so forth. And one of the questions was, uh, something along the lines of, "How did you know?" You know, "What was the point of breakthrough?" Or, "What was I... " And repeatedly, we kept getting a response which was, "I don't get the question. Uh, that's a stupid question."

    7. TFTim Ferriss1:41:54

       [laughs]

    8. JCJim Collins1:41:54

       There was no... [laughs] Right. There was no miracle moment. There was no moment of breakthrough. I don't think it was as dramatic as it sounds. It was more of a gradual process. It was like an awakening that kind of happened in steps, right? We just got this over and over again. It began to dawn on me that the way something really dramatic appears to those looking in from the outside is different than the way it feels to those doing it on the inside. And so it's like if you're watching an egg, right, and, and nothing's happening. It just looks like an egg is just sitting there, and all of a sudden it cracks open and out, out jumps a chicken. Well, you could have a big thing, a radical transformation of egg into chicken, and visionary leader transforms egg into chicken. And, right? But what's it look like from the chicken's point of view? Right? Well, it's just kinda one more step after a whole bunch of stuff that's been happening inside the egg that you couldn't see until it cracks open. So we were r- observing that it, the way it looked and the way it felt were different. And the way it sort of really happened on the inside, even though you can see the inflection on the outside, the best analogy I could come up with was it was a series of good decisions, supremely well executed, taken with disciplined thought, that added up one upon another over a very long period of time to produce a great result. And so, uh, I had this image of pushing a giant, heavy flywheel. And you start pushing it in this intelligent and consistent direction. You start pushing on the flywheel, and after a lot of work, you get one giant, slow, creaky turn. And then- You don't stop. You keep pushing in the sort of the direction of those three circles we talked about earlier, what you're passionate about, what you can be best at, what drives your economic engine. So it's not random pushing. And you eventually get two turns, and then you keep pushing. And they eventually get four, and they start to add upon each other, and then eight and 16 and 32 and 64 and 100 and 1,000 and then 10,000 and then 100,000. And then at some point, all that cumulative momentum, all that cumulative... Sort of like this-- that you can-- there's a breakthrough that happens, but how did it happen? What was the one big push that made it go is a nonsense question. It would be like asking, you know, what was the one investment that made Warren Buffett Warren Buffett? Well, [laughs] that's, uh, doesn't make sense, right? So it's a cumulative effect. And so that, uh, and then we observed in the comparison companies that they bought into the idea of these sort of dramatic moments or radical transformations or, you know, cultural revolutions or whatever, uh, savior CEOs, anything they were trying to jump to break through in sort of one big step rather than the building of the flywheel. And that was kind of a doom loop. And so we wrote this chapter called The Flywheel and the Doom Loop, which was chapter eight of Good to Great. And, and it really kind of captured-- It was a really neat chapter because it just sort of, for me, turned it on its head about how it actually happens. And it came from the research, right? It was all from the research. So then, um, uh, after publishing, uh, Good to Great and, you know, it changed our lives and I'm very grateful for how many people it reached. But right around the time of its publication, uh, in 2001, it was published, uh, in, uh, October, September, October of 2001, I was invited up to Amazon. And, uh, the flywheel principle was embedded in Good to Great. It's a fundamental principle of how, you know, great companies get built over time, ones that last and so forth, and I knew the principle. And I w- and I was there with executives in Amazon, and all I did was teach, right? I, I don't-- just taught them the principles in Good to Great and particularly the flywheel. Coming out of the dot-com, it's like, "Don't respond to this as an event. Respond and build a flywheel." And great students often take things and make them even better. And what they did was they took the flywheel and then made it their own. And what, what they did was to say, "We're gonna harness the flywheel principle that came from Good to Great, but we're gonna do it by getting clear on what is our flywheel." And so to really harness the flywheel, then you have to be able to say, "Okay, so but that's great. The flywheel principle is the principle, but how do you then turn that into your own flywheel? Like, what is the flywheel?" And what the Amazon people did, kind of in a more simplistic form, but I'll just grab it here. Essentially, they, they, they had this sort of reinforcing loop, right? You know, if you lower prices on more offerings, well, then you almost can't help but go down to the next step on the flywheel. Picture a circle going around, right? To increase customer visits. And if you increase customer visits, well, then you almost can't help but get more third-party sellers. And if you get more third-party sellers, well, then you almost can't help but expand the store and extend distribution. And if you do that, you can't help but grow revenues per fixed costs. And if you do that, you can't help but be able to lower prices on more offerings, which is going to attract more customer visits, which is going to attract third-party sellers, which is going to, uh, expand the store and extend distribution. You can eventually buy whole foods and all the other stuff. You're gonna grow revenues per fixed costs and then boom, lower prices on more stuff, et cetera, et cetera. Now, the beauty of that was that they got very specific, and what I came to understand was the flywheel principle best comes to life when you can really capture it. But here's the key. People talk about flywheels. You know, we have a flywheel, whatever. And what I came to see is that people didn't necessarily really have a flywheel because they didn't understand something deeply important about how a fly- what a flywheel really is. A flywheel is an underlying compelling logic of momentum. It's not a list of steps drawn as a circle called a flywheel. Rather, there's an inevitability built in. If you do A, you almost can't help but do B. And if you do B, you almost can't help but do C. And if you do C, you almost can't help but do D. And if I-- and around and around, and it gets driven around because there's an underlying connection. There's a logical sequence that builds dynamic momentum because A drives B, drives C, drives D, and around back to the top of the loop. And that if you can kind of stand back and then say, "We need to engage in the very hard thinking of figuring out exactly how our flywheel turns, what is our flywheel in a way that truly has that inexorable driving momentum within it." And different organizations will have different flywheels. Different people will have different flywheels. You have a flywheel, right? And, and then the key is you build it over a long period of time, and the power of a flywheel is that it's an underlying logic. It's, it's an underlying architecture. It's not a single business, right? It's something that can be extended. You can then extend it into, uh, new things as you experiment and find new things that will drive the flywheel even further, whether it be going from military bombers to commercial jetliners in the case of Boeing. But the same underlying architecture. Going from memory chips to microprocessors in the case of Intel, but the same underlying architecture. And, and so what the flywheel monograph is about is basically after... I like to say to people, "Just because you're the one who articulated the principle," as we did in Good to Great. We've-- We uncovered it, we articulated it Uh, and, and it's right, but it doesn't mean you yet fully understand it, even if you're the one to bring it forth. After 15, 17 years of really reflecting on it, I realized that my understanding of the flywheel back in Good to Great was right but primitive. And so this notion of really, really thinking through the specifics of a flywheel became something that I really wanted to share with people because I, I felt that people were talking about it a lot, but not really understanding it, and so that's what that's about.

    9. TFTim Ferriss1:50:25

       And, uh, just, just for people who may be wondering, so by, by mono- when you say monograph, uh, one way to think of this would be as a, a short book. It's, I think, 46 pages.

    10. JCJim Collins1:50:35

        About 40 pa- yeah.

    11. TFTim Ferriss1:50:36

        Yeah.

    12. JCJim Collins1:50:36

        Yeah.

    13. TFTim Ferriss1:50:36

        40 to 46 pages, and in that you also talk about, uh, you give other examples and walk through Vanguard, Cleveland Clinic. Uh, a- you did mention earlier, and I don't, uh, I don't know if, if this is in, in the monograph as well, but possibly asking you about what your flywheel is. Uh-

    14. JCJim Collins1:50:55

        Well, I thought, knowing you, that you might ask, so I, in my kind of, uh, drive for, um, you know, being prepared, I put a little thought into that, so I'd be happy to, to chat about it. Let me just share with you one thing, though, [clears throat] about the, the different examples that are in there. They cover such a, a wide range, and we have an elementary school where a school principal used it to create results for kids, basically, and you've got healthcare and you've got startups and whatever. But why a mono- a monograph? Here, this is w- McPhee I, I hope would like this idea. A piece of writing has a natural length. A symphony has a length. "Gimme Shelter" by The Stones has a length. You wouldn't say to "Gimme" ... "Well, we should make 'Gimme Shelter' a, you know, 72-minute piece." It, it's the wrong length for "Gimme Shelter."

    15. TFTim Ferriss1:51:45

        Mm-hmm.

    16. JCJim Collins1:51:47

        And writing is like music. It has an appropriate length for what the music is trying to do, to be. And what I realized back, uh, you know, 2005 was sometimes you can have something that is a powerful extension idea or an idea. It really shouldn't be a book. It's, it's not enough to be a book.

    17. TFTim Ferriss1:52:10

        Yep. 100% agreed.

    18. JCJim Collins1:52:11

        Yeah. But it shouldn't be a, um, but it shouldn't be just an article, 'cause that's ephemeral, 'cause if it's durable... And so we were really struggl- we wrote this thing called Good to Great in the Social Sectors, which was another monograph. And I was like, "What are we gonna do with this? If we make it an article, it's too perishable and too short, and if we make it a book, it's too long." It's ... And, uh, and then I... Well, do you make it a chapter in the back of Good to Great? Well, the problem with that is then all the millions of people who bought Good to Great buy, need to buy another copy of Good to Great. That, that's not right. So Joanne, my strategic brain, uh, said, "Well, w- why don't we create a monograph and publish that?" And started thinking about, like, remember Common Sense? Think of the impact of Common Sense by Thomas Paine. It didn't have to be big. It was the right size. And so I thought, "Well, why don't we bring back that genre?" Right? The, the monograph size. And so we wrote Good to Great in the Social Sectors. I remember printing 50,000 copies and thinking, "I don't have 50,000 friends to give it to, but it won't sell." And then it ended up reaching lots of people. We decided to do one on the, on the flywheel here. So, um, my own flywheel, if you want to, to chat about that-

    19. TFTim Ferriss1:53:27

        Sure

    20. JCJim Collins1:53:27

        ... I'd be happy to take a cut-

    21. TFTim Ferriss1:53:28

        Yes

    22. JCJim Collins1:53:28

        ... at describing it.

    23. TFTim Ferriss1:53:29

        Yes, please.

    24. JCJim Collins1:53:31

        When you do a flywheel, you need to first ask, "Where's the flywheel gonna start?" So in the case of Amazon, it's an economic flywheel for, that ultimately brings stuff to more customers and so forth. It starts with lower prices on more stuff, right? But Cleveland Clinic begins with getting the right medical professionals that can fit in their culture. Giro sports designer Intel starts with great innovative products. So the start of the flywheel is a key question, and in my case, it's curiosity-fed big questions. That's where my flywheel starts. It all starts with, "What am I curious about?" That has to be g- the beginning of everything, and if I'm really curious about something, well, then I can't help but wanna learn about it and do research on it, and that will throw me into the research. And if I do the research right and really, really throw ourselves into it and stay in those creative hours of the research, well, then I can't help but have ideas and insights, concepts that come out of that research. And then if I have those, then I can't help but want to write them and teach them and share them. And, and that means going through the suffering of writing, right? As you know, right?

    25. TFTim Ferriss1:54:53

        Yeah.

    26. JCJim Collins1:54:53

        And, and, and, and to write them well and to wrap them well and to get the concepts in the right vessels, I can't help but want to do that. And if I can't help... If I do that, well, then I can't help but have at least some impact on the world if it's well done, 'cause that's the power of writing. You never know where it goes. And if you have impact and reach in the world, well, then you can't help but have s- funding that comes from that, meaning there's some economics that comes that allows you to do what? Fund and feed your next curiosity big questions, which then leads to the research, which then leads to the chaos to concepts, which then leads to writing and teaching, which then leads to impact on the world, which then generates funding, which then allows me to fund the next question. And then it's perpetual.

    27. TFTim Ferriss1:55:42

        Is it, i- is it also the case that in some cases... I'm, I'm struggling with how to f- how to ask this question because it just occurred to me, but, uh, I suppose it is Th- uh, that, um, is it as true that there are negative flywheels as there are positive? Sort of these vicious cycles that are reinforcing within companies that people should be aware of, or is the flywheel as you use it, uh, a virtuous cycle? Uh, should people be also looking at sort of disabling, uh, flywheels that they might have organizationally?

    28. JCJim Collins1:56:19

        So, uh, the ans- It's a, it's a great question, and actually, I think it could be d- d- really interesting to think about dysfunctional flywheels, right? Uh, and really think about those. And w- I would... I'll offer two things. Uh, the, the first is that if a flywheel doesn't seem to be working, you have to kinda get the diagnosis right, 'cause it could be that the flywheel is just... You haven't got the flywheel right. Or it could be that the flywheel's fine, but think about the inexorable logic. Imagine you could score each of the five or six components on how well you're doing it, uh, say one to 10, and suppose your scores are eight, nine, 10, nine, three, nine. Well, the very nature of the flywheel, the fact that it's the reinforcing logic that builds incredible momentum over time, has a downside, which is that that three stops the whole flywheel. And so you have to be able to say, "Well, maybe we have a flywheel that's working. It's a great flywheel, but the problem is we're not executing on this piece of the flywheel, and therefore, the entire flywheel stalls or stops." So that's an important thing for people to think about. You can't... If you do five-sixths of the flywheel well, you don't get five-sixths of the momentum. You get none. And that's, uh, sort of the downside of the, of the flywheel, because you gotta execute on all of it. Now, going to this other question. In Good to Great, in a lot of... This concept came from Good to Great, which is why we go back to it a lot. There are all the other books, Built to Last, Great by Choice, and so forth. But in Good to Great, uh, and then later we explored it further in How the Mighty Fall, which is studying how great companies fall, w- we described this other pattern we saw in the comparison companies or in the companies that fell, which is a doom loop. So you have the flywheel on one hand, and you have the doom loop-

    29. TFTim Ferriss1:58:04

        Right

    30. JCJim Collins1:58:04

        ... on the other side. And yes, and the doom loop, though, tends to have the following pattern. You are grasping for some sort of salvation, a new savior, a new program, a new strategy, a new direction, a new right, because things aren't working. And because it really doesn't have underlying flywheel logic to it, it doesn't really get any traction. There's a burst of hope and, and, "Well, gosh, you know, maybe this will really work," and then that's false hopes dashed by events. And then that produces kind of a reaction without really understanding what really worked, which then leads to another grasp for salvation. And what happens is you drive yourself further and further down in that grasping for salvation, which is stage four of five stages of when great companies fall, and that eventually leads to companies really going to the bottom. So while you can have actually... We've-- 'Cause you have, again, you always have the comparisons, the, the, the, the Good to Greats and the comparisons, the Built to Last and the comparisons. The comparisons often, in fact, double down on a doom loop and drive themselves into the ground.
13. 1:59:54 – 2:24:37

    Big bets vs. calibration: engagement after four days, ‘fire bullets then cannonballs,’ and closing themes

    1. TFTim Ferriss1:59:54

       Um, and it could be that I'm misperceiving who you are, or it could be that I'm misperceiving how things transpired. The first is... Well, there, there, there are two that, that jumped out. The first is you having mentioned that you got engaged-

    2. JCJim Collins2:00:07

       Mm-hmm

    3. TFTim Ferriss2:00:07

       ... four days after your first date.

    4. JCJim Collins2:00:09

       Yeah.

    5. TFTim Ferriss2:00:09

       The sec- the second was around 35, 36, your Thelma & Louise-

    6. JCJim Collins2:00:14

       Mm-hmm

    7. TFTim Ferriss2:00:14

       ... moment, where you... It's... You... It s- You had less than $10,000 in the bank, and you kinda threw this Hail Mary.

    8. JCJim Collins2:00:21

       Yeah.

    9. TFTim Ferriss2:00:21

       Those both seem very out of character.

    10. JCJim Collins2:00:23

        Hmm.

    11. TFTim Ferriss2:00:24

        Uh, s- so i- is it that you looked at the downsides, decided you could survive, uh, a- and you ran some type of calculus? How did these two things happen-

    12. JCJim Collins2:00:32

        Hmm

    13. TFTim Ferriss2:00:32

        ... given that you seem to be encoded to be very [laughs] data-driven, to think through the contingencies, to test the assumptions, and so on and so forth?

    14. JCJim Collins2:00:44

        So I think those are related but very different situations, and I think they, they... One of them is consistent with one of our principles, and one of them, I don't know where to put it. [laughs]

    15. TFTim Ferriss2:00:54

        [laughs]

    16. JCJim Collins2:00:55

        So, uh, so one of the key principles from all of our work is the notion that life, everything... You have to kind of, you know, great things build by disciplined people, disciplined thought, disciplined action, then building it to last, and then you multiply times return on luck. Luck, L-U-C-K. And it's... And th- by the way, the evidence is very clear. The big winners are not luckier. We, we were able to establish that, uh, by s- by quantifying luck and studying it. Uh, the big winners get a higher return on their luck than the comparisons, but they don't get more luck per se. Now, uh, in... And I've mentioned this notion of who luck, uh, all the way through our conversation, and lessons from great mentors. One of the p- key things we've learned in our work is everything starts with people, disciplined people, but also just people. And, uh, I, I don't know how you quantify certain aspects of just things about people. I mentioned earlier friends and my marriage and- I just, you know, want time with people you love, meaningful work with people you love and respect. And so with Joanne, um, we found each other. We, we had... We both came from families that they, they were clearly not built to last families. [laughs] And, and we, we met at, uh, we, we met in Boulder very briefly, but we really met at, in college at Stanford. And our first date, uh, was a run. And I wasn't really a runner, but I really wanted to be around Joanne, but I couldn't. I was too shy really to ask her out. But so she eventually said to me... I said to her, "So are you still running?" And she said, "Yes." And I said, uh, "Well, uh, I'm thinking of upping my mileage," which was true, 'cause I had just thought of it and talked [laughs]

    17. TFTim Ferriss2:02:44

        [laughs]

    18. JCJim Collins2:02:47

        And, and so she said, "Would you like to go for a run?" And I said, "Sure." And I went over to her dorm room, and she took me out on an eight-mile run.

    19. TFTim Ferriss2:02:55

        [laughs] Oh, you want to run, s- do you?

    20. JCJim Collins2:02:58

        Yeah, you want to run. And it was the... And anybody who knows the Stanford campus knows that if you go out sort of towards Page Mill Road, you go immediately uphill out of campus. So we went three miles uphill.

    21. TFTim Ferriss2:03:10

        [laughs]

    22. JCJim Collins2:03:11

        And, and then sort of had to wa- At, at about the three-mile mark, it became very clear to her I wasn't really that much of a runner, and so we walked five of the eight ways back.

    23. TFTim Ferriss2:03:24

        [laughs]

    24. JCJim Collins2:03:26

        And we got to know each other really well, and, uh, that was my senior year and her junior year. And by Thursday, uh, we had simply decided to throw our lives in together. I don't know where the data comes from that. I don't know the evidence. I just had this sense and, and, and, and, and I think Joanne did too, of this, this incredible stroke of luck that these two people had... I, I just... I mean, we'd found each other, and it was just an instinctive thing, and we just did it. It was truly... And it's funny, 'cause Joanne later was the, uh, the Nike athlete. She won the Ironman in 1985. Uh, she was in the original Just Do It campaign. So maybe she was already thinking, "Just do it," right? "We're gonna get married." [laughs]

    25. TFTim Ferriss2:04:15

        [laughs]

    26. JCJim Collins2:04:15

        And so, so anyways, uh, and we got in, we got married about six months later. And I can't say where the evidence comes on that, but it's hands down the best decision I ever made. And-

    27. TFTim Ferriss2:04:27

        Wow

    28. JCJim Collins2:04:27

        ... but then the, the key is the commitment to make it work, 'cause relationships are about... I mean, you, you just, y- the unwavering, "We will not fail at this marriage no matter what." And you have to have some place in your life... You know, in, in Good to Great, I wrote in the acknowledgments one of my favorite paragraphs I've ever written. And it's at the end of the acknowledgments, and I was gonna write about Joanne. And I wrote a line which is along the lines of, um, "Success in the end for me is that my spouse, uh, likes and respects me evermore as the years go by. And I hope by that measure to be as successful as she is." So I don't know where that comes from.

    29. TFTim Ferriss2:05:35

        Yeah. Well, you, you said at the very beginning of this conversation, or maybe you were quoting Wittgenstein, I can't recall, but he [laughs] the, s- many of the most important things sort of transcend the capabilities of language, right? And this certainly seems to fall into that category in, in some respects.

    30. JCJim Collins2:05:55

        Yeah. The, uh, the big bet, uh... So one of the things that we learned in Great by Choice with my coauthor Morton Hanson, another great stroke of who luck in my life. He's a tremendous... He's a genius research methodologist and, uh, a great, great partner on Great by Choice. One of the things that we struggled with was the role of big bets and the role of, you know, kind of new directions and innovation and so forth. And one of the things that we found is the importance of empirical validation, which is really different than pure analysis, and the, the principle we call fire bullets then fire cannonballs. And the idea being you have a certain amount of gunpowder, and ama- and you have a ship bearing down on you. And imagine you take all that gunpowder and you put it in a big cannonball, and you fire it at that ship, and it misses. And you turn, and you look back, and you're out of gunpowder. And now you're in real trouble. But imagine if instead what you did was you, you fired bullets. Uh, and you fire your first bullet and it's 30 degrees off, and then you take another bit of gunpowder and you fire a second bullet, and it's... It, it shoots out there, and you're... Now you're only 10 degrees off. And then you take a third bullet and you fire, and you put it... And, and it hits the side of the ship. Ping. You know you have a calibrated line of sight. And now you take your gunpowder, whatever you have, and you put it in a cannonball, and you fire it on the calibrated line of sight. And what we learned is that... And I'll, I'll tie this into the Thelma and Louise moment, because w- w- what we learned in our research is that one way you extend a flywheel is you're firing bullets, and then every once in a while get calibration, and then you fire a big cannonball on a calibrated line of sight, which then adds a big burst of momentum into a whole new direc- uh, not necessarily new direction, 'cause the flywheel's turning, but, uh, it gives you an empirically validated big bet that can give you massive momentum. And the key there is notice, though, it's empirical validation, and that empirical validation are the bullets. If we go back to the Thelma and Louise moment, there is the moment of gulp when you fire the cannonball, right? I mean, you can't just sit there and only fire bullets. There comes a point when you gotta fire the cannonball. In that case, I was really scared because if the cannonball didn't hit, I didn't know what was going to happen. We were really felt out there. But there were also six or seven years of bullets that had been the research we had done, the teaching in the classroom, and also some early response to Built to Last. There was no guarantees yet, but early response of people really resonating with the ideas, right? There, the, there... It wasn't like it just came out of the blue. There were bullet, bullet, bullet. There was enough calibration that this was not crazy. The question was, would we have the guts at that moment then to take all of our gunpowder, put it into one big cannonball, and go? And there's a critical lesson I got from one of my, uh, mentors, another stroke of who luck, at Stanford, and two great professors that were there with me when I was teaching. Bill Lazier, who taught me about the importance of relationships first in life, and there was this guy named Irv Grossbeck. And I asked Irv, "Do you think I should keep enough capital alive here at Stanford that if this doesn't work out, I could come back?" And Irv said to me, "An option to come back has negative value."

Episode duration: 2:24:57