Last week the business growth guru Verne Harnish shared with me that he is about to publish a new book. With a foreward by Jim Collins, The Greatest Business Decisions of All Time is the kind of text only Verne could pull together. Along with some of the top writers and editors at Fortune magazine, Verne shares the inside story on 18 of the most unconventional decisions ever made in business—decisions that not only changed companies, but changed industries and even nations.
Few have influence to convince so many brilliant business thinkers to contribute to a common cause, and perhaps no one has devoted as many decades as Verne has to studying the role great decisions play in an entrepreneur’s success.
If you don’t think Apple, Zappos, Walmart, Ford, or 3M have something to teach you, look in the mirror. If you know they do, then buy this book. In addition to weaving inspiration with real-world corporate mythology, the book offers a rich dataset of strategic decisions—from Ford’s decision to give workers a wage high enough that they could afford a Model T to 3M’s now oft-copied practice of giving engineers time to dream—to study. Here is what I learned from the book:
1. Echoes are better than cries.
When we think of the critical strategic decisions that changed the course of a company’s history, we like to think about big bets, one-time events that redirected the course of corporate history. But only three of the 18 decisions this book details were one-time decisions. Sure, you have Apple’s board deciding to return Steve Jobs to CEO, or Softsoap’s risky strategy of buying up soap pumps to block P&G from copying, but in most cases, decisions that matter look more like Zappos offering free shipping or Walmart holding 6 a.m. meetings: The decision guides not just immediate action, but future action. The culminating effect becomes huge. Implication: For each decision, think about how this choice might inspire future decisions.
2. Commit to inspire.
Look at the decisions that did repeat and you see they influenced future choices through inspiration or commitment. Commitment is when your decision forces your company onto one path while giving up another. Verne, for example, points out that Boeing’s 1952 decision to focus on commercial air travel rather than the defense industry committed the company to a radically different path than its peers.
Inspiration is when your decision becomes part of folklore and so inspires a new pattern of behavior. IBM’s CEO’s decision to force top leaders to travel to visit key customers turned into a pattern of behavior that now keeps the once-distant firm close to customer needs. Johnson & Johnson’s policy of adopting transparent and cooperative principles during a Tylenol scare underscored the company’s commitment to doing what is best for customers, even at the cost of the business. This decision inspires thousands of decisions every day and shapes J&J’s unique culture.
3. Rarely do big ideas come from the boardroom.
Few of the greatest decisions Verne highlights occurred in the boardroom, during regularly scheduled planning sessions. Opportunities and threats appear uninvited or unannounced. The key to greatness, then, is to know how to respond intelligently on the fly, like Intel cofounder Andy Grove, who could have laughed at a junior assistant’s suggestion they invest millions on a consumer marketing campaign even though their only clients were OEMs like HP and Compaq. Had Grove responded as most would, there would be no “Intel inside.”
Definitely take the time to look at Verne’s book, which is released this week, and think about how you make the decisions that will shape your company’s future:
1. Are you thinking of the long-term repercussions if the decision you’re about to make is repeated a hundred times?
2. How will your decision commit your company to a new course or inspire future behavior?
3. Do you treat every decision that comes up as a potentially strategic one?
What do you count among the greatest business decisions of all time and why? Tell us about it in the comments.
[Image: Flickr user Thomas Mathie]