“The best – perhaps even the only – way to predict the future is to create it.” – Peter Drucker

Last week I introduced the book GREAT BY CHOICE: Uncertainty, Chaos, and Luck – Why Some Thrive Despite Them All by Jim Collins. I would like to share with you over the next several weeks Jim Collins’ insight on how the choices we make determine our success.

As I continued to work my way through the book for the second time, I realized more people can benefit from this valuable information. In this week’s message we will begin with Chapter 1: Thriving in Uncertainty.

In this chapter Collins outlines his research journey and shares some of the surprises he and his team encountered along the way.

He explains that some companies and leaders navigate in this type of world exceptionally well. They don’t merely react; they create. They don’t merely survive; they prevail. They don’t merely succeed; they thrive. They build great enterprises that can endure. He and his team did not believe that chaos, uncertainty, and instability are good; companies, leaders, organizations, and societies do not thrive on chaos. But they can thrive in chaos.

To get at the question of how, Collins and his team set out to find companies that started from a position of vulnerability, rose to become great companies with spectacular performance, and did so in unstable environments characterized by big forces, out of their control, fast moving, uncertain, and potentially harmful. They then compared these companies to a control group of companies that failed to become great in the same extreme environments, using the contrast between winners and also-rans to uncover the distinguishing factors that allow some to thrive in uncertainty.

They labeled their high-performing study cases with the name “10X” because they didn’t merely get by or just become successful. They truly thrived. Every 10X case beat its industry index by at least 10 times.

To grasp the essence of their study, consider one 10X case, Southwest Airlines. Just think of everything that slammed the airline industry from 1972 to 2002: Fuel shocks. Deregulation. Labor strife. Air-traffic-controller strikes. Crippling recessions. Interest-rate spikes. Hijackings. Bankruptcy after bankruptcy. And in 2001, the terrorist attacks of September 11. And yet if you’d invested $10,000 in Southwest Airlines on December 31, 1972 your $10,000 would have grown to nearly $12 million by the end of 2002, a return 63 times better than the general stock market. In fact, according to an analysis by Money Magazine, Southwest Airlines produced the #1 return to investors of all S&P 500 companies that were publicly traded in 1972 and held for a full 30 years to 2002. These are impressive results by any measure, but they’re astonishing when you take into account the roiling storms, destabilizing shocks, and chronic uncertainty of Southwest’s environment.

Why did Southwest overcome the odds? What did it do to master its own fate? And how did it accomplish its world-beating performance when other airlines did not? Specifically, why did Southwest become great in such an extreme environment while its direct comparison, Pacific Southwest Airlines (PSA), flailed and was rendered irrelevant, despite having the same business model in the same industry with the same opportunity to become great? This single contrast captures the essence of Collins research question.

Collins and his team have been asked by many of their students and readers, “How is this study different from their previous research into great companies, especially Built to Last and Good to Great?” The method is similar and the question of greatness is constant. But in this study, unlike any of the previous research, they selected cases not just on performance or stature but also on the extremity of the environment.

The team selected on performance plus environment for two reasons. First, they believe the future will remain unpredictable and the world unstable for the rest of our lives, and they wanted to understand the factors that distinguish great organizations, those that prevail against extreme odds, in such environments. Second, by looking at the best companies and their leaders in extreme environments, they gain insights that might otherwise remain hidden when studying leaders in more tranquil settings.

Studying leaders in an extreme environment is like conducting a behavioral-science experiment or using a laboratory separator: throw leaders into an extreme environment, and it will separate the stark differences between greatness and mediocrity. Collins’ study looks at how the truly great differed from the merely good in environments that exposed and amplified those differences.

Thriving in a chaotic world is not just a business challenge. In fact, all our work is not fundamentally about business, but about the principles that distinguish great organizations from good ones. Greatness is not just a business quest; it’s a human quest.

Next week’s Thoughts on Leadership will feature Chapter 2: 10Xers