We all know Jim Collins, who wrote those entrepreneurial tomes “Good to Great” and “Built to Last”. The books explore the vexing question about why some companies become great while others flounder.
Collins has built a successful business around researching these companies, writing the books and teaching.
So I was intrigued to read this interview with him in Inc‘s April issue, where he was asked what he has taken from all his studies of great companies that he has applied to his own company. Guess what he said? His latest research into turbulence in business has turned him into a “total paranoid, neurotic freak”.
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“It has shown me the importance of building big shock absorbers. I keep a year’s operating budget in cash at the bank across the street all the time, and run this place so that we can get an entire year without a penny of revenue.”
He says he learnt that from reading about Bill Gates in the early days of Microsoft. “I want to be able to say at any given time ‘If we don’t get a penny for three years, we’ll be fine’. So we can focus on our work.”
So what is it from his latest research that has spooked him? The realisation that he has to “adjust to dealing with a world that is going to be ferocious. We don’t have practice with that. People like me who grew up in the post war period are not practiced at the volatilities, the turbulence, the uncertainties of the world that will probably define the second half of my life,” he says.
But when he was asked about sounding pessimistic, he says that while the world won’t treat us well, we will figure out how to do very well.
“We need to have a complete, realistic faith on our ability to deal with whatever is thrown at us. And we need to have a complete realistic paranoia that a lot can be thrown at us. It’s our ability to put those two contradictory ideas together: We need to be prepared for what we can’t predict, and at the same time have this total unwavering faith that we will find a way to deal with it all.”
And one solution? Hand over the keys to the younger generation of kids as soon as possible, as there is a most inspired and inspiring generation coming through. “Let them run it,” he says.