Jim Collins, author of best-selling business books
Good to Great and (with Jerry Porras) Built to
Last, is nearing completion of his latest research effort,
a look at organizations that have thrived while operating in
environments characterized by severe disruption. An avid rock
climber, Collins uses the analogy of performing well high on a
mountain, in an environment characterized by fast-moving and
unpredictable forces. Collins believes that most leaders today
feel they are metaphorically moving higher on the mountain, and
notes that this might be especially true for CIOs. He and his
research colleague, Morten Hansen, have been researching the
question of why some companies prevail in such environments,
while others fail to perform (or survive).
Collins shared some of his initial findings at the CIO
Leadership Conference held April 29-May 1. After his talk,
Collins spoke with CIO Senior Editor Stephanie Overby about
what CIOs can learn from his research on leadership, including
what he calls the “asymmetric risk” IT leaders must
manage every day, and why CIOs are uniquely qualified to
succeed in the CEO role.
CIO: You spend a lot of your time studying CEOs. At
the CIO Leadership conference where you spoke earlier this
year, you had the chance to spend some time with leading CIOs.
What did you learn?
Collins: As we got to talking, I was really
struck by the duality of risk and opportunity CIOs have to
manage. On the one hand, a couple people talked about threats
of cyberterrorism. I mean, this is real stuff—I had no idea
how real. You add that to how dependent companies are on their
information systems and technology systems–one CIO I
spoke to said that it used to be if we went down for a few
hours it was annoyance; now it’s a catastrophe–and that’s a huge burden. Man, this is one of those
really, really tough jobs in life where every day that’s
a success, you’re invisible. Yet the one day when
something goes wrong, you become very visible. What a hard job
when you think about it.
At the same time I was really struck by how CIOs are really
energized by wanting to help push the organization forward, to
do innovative things, to bring in things that advance the
flywheel of business.
Thinking about how they deal with that duality is how I came
up with the image of CIOs being like climbers. You don’t
want to just cower in your tent and never go up. That’s
not living. That’s not really being a CIO. At the same
time you don’t want to make the one mistake that will
kill you. That duality of putting yourself in a risky
environment–going for the summit, going to try to do
something bold and being really disciplined about protecting
your systems, not making the one mistake that will bring us
down. I wouldn’t go so far as to say no other role
in the business is like that. I don’t know that. But it
strikes me that this role is pretty far out on that curve.
Next: Managing “Asymmetric Risk”
Is there increasing value in having the ability to
manage what you call asymmetric risk?
As we study entire enterprises moving higher on the
mountain, CEOs are increasingly managing asymmetric risk.
Something happens and there’s a stock meltdown or a
company gets acquired or something bad happens and it instantly
explodes in the 24-hour news media. That need to manage
asymmetric risk will be increasingly a CEO requirement. CIOs
have been trained in that. They live in that.
Yet, the leap from CIO to CEO is still not all that
I don’t know if that will change. But let me share
something from our Good to Great research. We look
carefully at backgrounds of people who became key CEOs in
companies during the eras we studied. A lot came from unusual
backgrounds. Bill Allen, who was one of the greatest CEOs in
history and brought Boeing back from the brink was a lawyer.
Darwin Smith was a lawyer. Herb Kelleher at Southwest Airlines
was a lawyer. David Maxwell was a lawyer. The most prevalent
background in the best CEOs we studied was law. But how often
do you hear of law as a path to the chief executive
But lawyers are very disciplined thinkers who also manage
asymmetric risk. That’s part of the nature of law. Now it
may be rare that lawyers become CEOs, but when they do get in
that role, their training has been very, very good and they
have been exceptional. CIO training strikes me as potentially
having some very good training for corporate leadership.
Do you have any advice for managing asymmetric
In the research we’re doing on prevailing in the face
of disruption, we find that the ability to recognize and manage
asymmetric risk to be a crucial capability. The companies that
we’ve studied that have done really well in these
environments are always squirreling away slack in their systems
so they can absorb a shock. They’re very conservative
financially, which gives them options. They can always try to
climb again another day. They never stretch themselves too thin
or grow too fast, so that when the shocks come (and the shocks
are going to come), they have built in shock absorbers. If you
stretch yourself to the limit, you amplify your asymmetric
Next: How Can Companies Sustain Positive
In Good to Great, you explored the incredible
amount of effort it takes to begin to transform an
organization. But you proposed that once it is started, the
momentum builds like a flywheel. You’re now doing some
research on the downshift from “great” to
“good.” How difficult is it to sustain that
momentum over time, particularly in times of great market
Our research indicates that the flywheel concept applies as
much in times of change as in times of stability, perhaps even
more so. Over the long course of history, a great company is
built by a series of good decisions executed with supreme
excellence, accumulating one on top of another over a long
period of time. No decision or event, no matter how big,
accounts for more than a small portion of the total outcome.
Greatness is a cumulative process, even in times of dramatic
change. And never forget: the most important flywheel decisions
are people decisions. If you get the right people, they can
adapt to a changing world.
The very nature of our research method—studying those
that attained and sustained greatness in contrast to those in
similar circumstances that failed to become great (or failed to
sustain it) reduces the role of circumstance in explaining
outcomes. If one company rises and the other falls, yet they
both have similar circumstances at the start of the inflection,
then the answer cannot be circumstance.
My colleague Morten Hansen and I are nearing completion of a
six-year research effort studying companies that went from
startup to greatness in environments characterized by
turbulent disruption. We’ve deliberately selected companies in
the most severely turbulent industries, using the following
climbing analogy: If you wake up in the security of base camp
and a storm moves in, you’ll probably be fine. But if you find
yourself at 27,000 feet as a vulnerable little speck on the
side of Mount Everest, where the storms are bigger, faster
moving, inherently unpredictable, and the environment less
forgiving, a storm just might kill you.
Our research examines companies that prevailed in such
environments in contrast to those that did not prevail in the
same brutal, turbulent, rapidly changing environments. No
matter how we slice it, greatness—creating it and sustaining
it—is a function first and foremost of conscious choice and
discipline, not circumstance.
Next: What Seeking Greatness Means to Individual Leaders
What implication does that have for individual
leaders, like the CIO?
Focus on building your organization into a pocket of
greatness. Those who rose to senior leadership in the
good-to-great companies focused first and foremost on
delivering exceptional results, building the best accounting
department or law department or whatever they had
responsibility for, and letting those results speak. They
became chief executive because they proved themselves as Level
5 leaders within their organizations, and others took notice.
(Editor’s note: In Good to Great, Collins
defines five levels of leadership, from level one, the highly
capable individual, to the level-five executive, who is capable
of building enduring greatness through a paradoxical blend of
personal humility and professional will.) And even if they
didn’t become CEO, they became key members of a Level 5
executive team. A Level 5 team lives by the idea that “no
matter how much we achieve, we are always only good relative to
what we can do next.” One of the keys to sustained performance
is to remain productively neurotic about how you could lose
your position, about how you need to make yourself stronger
tomorrow than you were today as a hedge against an uncertain
future, about the need to be aware of the brutal facts. Perhaps
CIOs can play an especially helpful role in tracking and
presenting data, facts and trend lines—indicators of concern—so that the brutal facts might be confronted long before
events mushroom into a significant setback.
Based on your interaction with CIOs, which you warn
is relatively limited, you described IT leaders in your keynote
speech as socially adept introverts. Why is that worth
I’m a socially adept introvert.
We have a mythology of leadership that leadership and
personality are the same thing. They’re really not. Yes,
some leaders are very extroverted. Some are very charismatic.
There are some advantages to being charismatic, but
here’s the danger: It’s very dangerous to be
charismatic and wrong. If you’re wrong and charismatic,
you can convince everyone else you’re right, which
isn’t in your best interest.
Our work has found that that tends to be more of a
liability. The executives we studied were very good listeners,
very good at asking questions. They weren’t necessarily
good at giving speeches or standing up in front of a room,
although some learned well how to do this despite their shy
If you come from a background that is more analytic,
it’s likely not your nature to be the extrovert. And
it’s worthwhile noting that many of the very best leaders
and chief executives are exactly like that.
Next: Why CIOs Are Good at “Legislative
You say that successful CIOs are probably good at
“legislative leadership.” What do you mean by
It came from some work we did in the social services sectors
(education, hospitals, city management, universities) as
opposed to corporations. What we found is that, unlike in
business, you have leaders who get things done without
concentrated power. It’s like a senator, who is one of
100, who has to somehow figure out how to assemble points of
power to get something done. Whereas if you’re [Wal-Mart
founder] Sam Walton or some other CEO of a public company, you
have enough to power to decide things on your own.
As I listened to CIOs talk, it began to dawn on me that if
you don’t have that concentrated executive power, the
legislative skill set might be the same as we see in the social
sector. You don’t have the power to make something happen
so you have to have the legislative ability to see where the
points of power are and leverage them. How do you identify the
pools of power and coalesce them to get to a decision in that
direction even if it’s not your decision to make?
That’s a legislative skill set.
One of the interesting things about legislative power is
that people have to trust your motivations. They know
you’re arguing a point, but you’re looking for the
best overall outcome. Frances Hesselbein of the Girl Scouts did
a lot of things to make outcomes happen. But everyone knew in
the end that Frances would bleed green. It was all about the
Girl Scouts. The more someone is in it for larger outcomes, the
more legislative influence they have.
A legislative leader is always asking what’s best for
the organization and thinking about the multi-variant ways they
can connect people to their vision. It’s very artful and
nuanced. The interesting thing is that most CEOs are now facing
an increasingly diffuse power map, too. The pure power for the
CEO of a public company is shrinking, with the increased power
of boards, Sarbanes-Oxley, shareholders. They have to acquire
more legislative skills to complement their executive power.
Those who learn how to yield legislative power–like
CIOs–might be well suited to those roles.
Next: Why Good People Trump Good Money
Two of the biggest concerns for most CIOs at any given
point in time are usually shrinking budgets and finding the
right people. You’ve always said that people trump money
If you look at it through an entrepreneurial lens,
environments characterized by limited resources, what becomes
very clear is that those who build the better ones understood
that every seat on their minibus was too precious. It was a
small number of seats in a scary environment while the company
was vulnerable. But it was far more important to them to put as
much energy as possible into putting the right people in the
right seats. If I can only have three seats, all of whom are
right people, that’s fine. I’ll get more done with
three of the right people than if I were able to double my
budget and have six people, three of whom aren’t the right
The more uncertain and more dangerous our world, the more
important [finding the right people] is. Using that climbing
analogy, it’s more important who your partner is on the
end of the rope than whether you have the best gear. If you
really think about it, what’s really going to help you?
People who can adapt to setbacks, adapt to resource
constraints, adapt to uncertainty. One company we researched
for Good to Great, [steel products maker] Nucor, said
the key is we hire five, work them like 10 and pay them like
CIOs are extremely concerned with motivating
employees. But you’ve said, in as many words, that
motivating people is a waste of time.
Our executives didn’t spend a lot of time motivating
people. They really didn’t . They understood that the
right people really are self-motivated. The real question is
not doing the stupid thing that will de-motivate them. In a
way, it’s disrespectful to say I will motivate you.
It’s actually saying that you aren’t a very
motivated person. The employee is saying, excuse me, what I
need is guidance and coaching and development, not
How does your concept of having the right people in
the right seats apply when you are outsourcing work to a third
party and have less connection to and control over people
I just don’t know. If it’s a tight partnership,
you still have some say in picking the right who’s. How
all that changes when you’re outsourcing, I don’t
have an empirical data on. I’ll say this: You can
subcontract a lot of things, but you should never subcontract
your thinking. In Good to Great, we found that the
great companies who used consultants did not want answers from
their consultants, they wanted data. They didn’t want
their consultants to do the thinking for them.