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JIM COLLINS 11_7_09 PAGE 1
BOBBUFORD:Well,ofallofthat,IthinkwhatpleasedmemostistosaythatIwasoneof
PeterDrucker’sclosestfriends.I’mheretointroduceJimCollins,nottotalkaboutme.And,I
gotfromCollins’office‐‐he’saverymeticulousperson‐‐alistofallthesethingsthathe’s
accomplished.Buthegavemepermissionnottousethatlist.
So,whatI’mgoingtodoistellyouwhatI’velearnedabouthim,thelastcoupleofdays,just
flyingonanairplaneanddrivingaroundinacar,aroundClaremont.Hopingtointroduceyou
totherealJimCollins.He’llhavehissubjectmatter,I’msure,andwe’lllearnalot.
ThefirstthingI’dsayaboutJimCollinsishe’srelentless.Drivingoverherethismorning,he
saidthathebudgetshistime,50%forwriting,30%forteaching‐‐todayisateachingday‐‐
andthebalanceforstuff,everythingelse.He,likeRickWarrensaidlastnight,neitherCollins
norWarrenownatelevisionset.
Whenheisinbookmode,heworks16hoursaday.Butitdoesincludearock‐climbinthe
middleofthedayandanap.[laughter]Afterwhichhegoesbacktowork.Thepurposeofthe
JIM COLLINS 11_7_09 PAGE 2
napistogethimbacktowork.HehasawonderfulrelationshipwithhiswifeJoanne,who
usedtoatleastbeabletooutrunhimupthemountain,andiskindofa‐‐she’spetite,but
she’sanAmazon.[laughter]And,Imean,shewontheIronmanTriathloninsomeplace.
Anyway‐‐strange.[laughter]
Idon’tthinkherestsany.Iaskedhimthismorningwhetherheeverrested,andhedoes‐‐He
restsontheclock,Imean,like,thenap.Buthesaidhewas49.some‐oddpercentonbudget
forwritingthisyear.Andthen,hecorrectedthatandsaid,“Actually,it's50%.”So,he’sthat
close.
Idon’tknowhowyoucelebratedyourbirthday.Jimcelebratedhisbirthday,his50th
birthday,byclimbingElCapitanstraightup,whichisthemostaboutstraightupanddown
thingyou’veeverseeninYosemite,andwhichhedescribesastheTourdeFranceofrock
climbing.Inaday,40hoursstraightup,youknow,nomeals,nonaps.[laughter]Nopauses,I
don’tbelieve.
ThesecondthingI’dsayabouthimisheisinfectiouslycurious.Youjustreallydon’twantto
bearoundhimmuchifyoudon’twanttogetquestioned.He’safriendlyinterrogator,buta
fairlyrelentlessfriendlyinterrogator.I’llgiveyouanexample.HeandIwerehavingdinnerin
Dallas.And,heaskedme,“DoyouthinkPeterDruckerwouldhavebeenmoreinfluentialif
hehadwrittenless?”Youknow,hedidwrite10,000‐bookpagesandlotsofmagazine
articlesandsoon.
And,ashetoldRickWarrenlastnight,firstIjustdeniedtoanswerthequestion.But,Ifinally
said,“No,Idon’tthinkso,becauseheestablishedtheplatformforalltherestofthepeople
towriteon,thatheconnectedthedots,sotospeak,inthewhole”‐‐Hereallycreatedan
industrywhichiscalledmanagement.
JIM COLLINS 11_7_09 PAGE 3
Ipersonallybelievethat,iftheNobelPeacePrize‐‐notEconomicsPrize‐‐committeehadhad
anygoodsenseorimaginationatall,thatPeterwouldhavegottenthePeacePrize.BecauseI
thinkmanagement’shadmoretodowiththestabilityofWesternculturethananyother
singlefact.Justgosomeplacewhereit’smismanaged,andyoureallywouldn’twanttobein
Darfuroroneofthosecrazyplaceslikethat.
Anyway,thatquestionjustcontinuedtobugmeallalong.And,ithas,inaway,resulted,not
throughanyeffortofmyown,inJoeMaciariellodoingaremarkablethinginthis
managementbook.Imean,youshouldget‐‐Thisbookisreally4011‐pagepamphletson
subjects.And,that’showhewroteless.Idon’tknowhowJoecameupwiththat.Idon’t
knowhowhegot60yearsintoonebookof4011‐pagepamphlets.
Butthe4011‐pagepamphletshavetransformedthemselvesintoDruckerUnpacked,which
usesmorethan,anythingelse,usesiconstotalkabouthowtodoplannedabandonment,or
howtomakedecisions,orthingslikethat,whichIneverwouldhavethoughtofthisuntil
RickWarrensaiditlastnight.Youknow,there’sstillagoodpartoftheworldthatis
languageless,Imeanthatarefunctionallyilliterate.So,wordsdon’tdomuchforthem.And,
theythinkintermsofimagesandpictures.
IfyouthinkofthewholeRenaissance,thewayChristianitydevelopedwaslookingatstained
glasswindows,pictures,notwordsandconceptsandthatkindofthing.And,thisDrucker
Unpackedisjust‐‐It’sjuststunning.And,itisadirectresultofmakingPeterwriteless.There
are15modulesofthingslikethethemeoftheoryorbusinessandthingslikethat.And,you
canactuallygetit.Imean,youcangetit,toptobottom.So,gobuythatthingand,you
know,useit.
Then,thenexttothelastthingIwanttosaytoembarrassmyfriendis,there’sawriter
namedAnnieDillard,whoIlikealot.And,AnnieDillardsays,“Thegreatestofallgiftsisthe
JIM COLLINS 11_7_09 PAGE 4
gifttosee.”And,inmyopinion,thetwopeopleinthelasttwocenturieswhosawmost
clearly,sawthebrutalfacts,sotospeak,inthe19thcenturywereAlexisdeTocqueville,a
Frencharistocrat,whocameandhadfresheyestoseetheUnitedStates,andPeterDrucker,
whowaskindofarelentlesslookerhimself.
And,itcouldbe,atleastmyearliestcandidateforthe21stcenturymightbeJimCollins.He
spendsadayapageonwhathedoes.Imean,hegoesoveritandoveritandoverit.And,it
allowsustoseethroughhiseyes,whichisthegiftwe’regoingtogetthismorning.
LastthingIwouldsayisheisadependablefriend.Hesaid,inthecaronthewayoverhere,
thattherewerethreethingsyoucoulddoaboutacommitment,likethecommitmenttobe
herethismorning.Youknow,thereisanoldjokewhereyoucallsomeoneupandaskifthey
believeinfreespeech.And,iftheysayyes,yousay,“WellI’vegotadealforyou.Ihavean
opportunityforyoutogiveafreespeech.”[laughter]
And,giventhefactthathegetspaidabout$1,000aminutetodohisunfreespeeches,thisis
agift.Andhesaid,“Therearethreethingsyoucandoaboutacommitment.Youcaneither
getanunqualifiedreleasefromit,oryoucandoit,oryoucandie.”[laughter]Andso,he’s
goingtodoitthismorning.Hereheis.[applause]
JIMCOLLINS:IamhereandI’mverymuchalive.Iamreallyverypassionatetobeherewith
youandtobereallyamongfriends,friendslikeBobBuford,JohnBachmann,withRick
Wartzman,andIraJackson,andthewonderfulthingsthey'redoingwithschoolandthe
institute,whichIapplaud.And,Iexpectremarkablethingstocomewithfriends,fromthe
faculty,andalsotobeamongakindofarolemodelfriendfromafar,whichisDorisDrucker.
And,it’sinteresting.BecauseIwastalkingwithmywifeJoanneonthephonethismorning
aboutchattingbrieflylastnightwithDoris.And,wewerejusttalkingabouthowwealways
JIM COLLINS 11_7_09 PAGE 5
lookedat‐‐I’vealwayslookedat,ofcourse,Peterasagreatrolemodel.But,Ialsoalways
haveadmiredtheirmarriage,theirrelationship,alsoasarolemodel.
And,weweresaying,yeah,youknow,ifyoulookatthatkindofarolemodel,we’vebeen
married,now,29years.And,wegotengagedfourdaysafterourfirstdate.And,wewere
saying,youknow,withthatrolemodelinmind,29yearsisreallynothingotherthanjusta
nicestart.
So,it’salsoreallyaprivilegetobehereintheenvironmentatClaremontintheDrucker
School.BecauseIactuallythinkthatitplaysaveryimportantroleintheworldofthinking
andofacademics.And,thisideaofitbeingaplaceforconversations,right,aplacefor
conversations,andaplaceforconversationsonimportanttopicsthatmatter.And,ofcourse,
weknowthatthat’sexactlyhowPeterDruckerinteracted,wasthroughthatconstantseries
ofconversationsandtheideaofhavingthatasanentireethosofaninstitution.And,Ithink
that’saveryimportantlegacyofbothPeterDruckerandoftheinstitution.
Andso,itisaprivilegetotrytocontributetothatinsomesmallwayheretoday.Ihavebeen
askedtohonorPeter,notbylookingbackandarticulatingallthewaysinwhichhewasa
greatman.And,ofcourse,hewasagreatman.But,bylookingahead,abit,atourchanging
world,andperhaps,throughthatlens,buildinguponsometimelessprinciples.
But,beforeIdothat,Iwouldliketosetacontextabit,andtoshinealightonPeterthrough
myownlens.BobBufordmentionedsomethinginhiscomments.And,I’vereflectedonthis
alot,andIbelieveitistrue,theideathatPeterDruckercontributedmoretothetriumphof
freedomandfreesocietyovertotalitarianism,asanyoneinthe20thcentury,including,
perhaps,WinstonChurchill.
JIM COLLINS 11_7_09 PAGE 6
And,thatmaysoundlikeanaudaciousstatement.But,asIthinkaboutit,ithastobetrue,
right.Therearetwowaystochangetheworld,theswordandthepen.And,thosewhouse
thepenrewirethebrainsofthosewhowieldtheswords.Therearepeopleofideasand
peopleofaction.And,Peterchosethepen.
Andreally,forafreesocietytofunction,weabsolutelymusthavehighperformingandself‐
managedorganizationsspreadthroughoutsociety.And,it’sreally,actually,thereasonwhy
we’reabletohavethisgreatmeleecalleddemocracy‐‐whatwasitthatChurchillsaid?It’s
absolutelythemosthideous,awful,completelyirrational,inefficientformofgovernment
everdevised,exceptforalltheothers.[laughter]
AndhealsosaidaboutusAmericans,ofcourse,we’llalwaysdotherightthingafterwe’ve
triedeverythingelse.[laughter]But,ifyouthinkaboutit,thatthere’sanaturalinconsistency
inDemocraticsystems,andnothinggreathappensinthecontextofinconsistency,sowhat’s
thesolutiontothat?Thesolutiontothatisthat,spreadthroughout‐‐andpeoplelikecity
managers,andpeopleinnon‐profits,andpeopleinbusinesscorporations,andpeoplein
organizations,theyaretheoneswholeadandmanageinawaythatproducetheconsistency
thatproducerealresults.
And,itisonlytherelationshipbetweenthosetwo,betweentheconsistent,well‐managed,
individualorganizationsthatmightnowbecreatingmovementswiththekindofinherent
inconsistencyofdemocracy,whichallowsustohavefreedom,thatwegetaworkable
combination.And,ofcourse,Druckergaveusthelanguage,themetaphor,thelens,the
understandingoftheroleofmanagementasthecriticalfunction.
Ithasbecomefashionableinrecentyearstoreveretheideaofleadership,whichIthinkis
great,buttokindofimplicitlydenigratetheideaofmanagement.Andtheideabehind‐‐
you’llhavepeoplewhokindofthinkofitastheleadersaretheoneswhoarecool,right.The
JIM COLLINS 11_7_09 PAGE 7
leadersaretheoneswho‐‐Weallwanttobetheleaders.Wewanttohavetheblackleather
jacketandthecoolsunglasses.And,wewanttolead.And,wewanttobecharismatic,and
wewanttobeallthesethings,andkindofthemanager,youknow,“Well,that’sjust
management.”
And,managementissortofmoremundaneandpedestrian.And,nothingcouldbefurther
fromthetruth.Leadershipwithouteffectivemanagement,andespecially,asRickWarren
mentionedlastnight,charismaticleadershipwithouteffectivemanagement,isnotonly
ineffective,itisdangerous.But,ofcourse,Druckerknewthisandpointeditoutmorethan
60yearsago.
And,ifwethinkthattheworldispermanentlyandirrevocablybeyondthereachof
totalitariandictators,thatfreedomwillalwaystriumph,andneverwillitstepbackward,I
wouldsimplyremindusofourhistory.Itisnotonourside.Mostoftheworld’smost
dangerousandpowerfultotalitarianstatescamelongafter500BCEGreece,whichwasthe
birthplaceofthenotionoftherepublicandthedemocracy.And,lookwhathappenedin
between.
Thereisnolawthatsaysitisaninevitablemarchtofreesociety.And,Ibelievethatfreedom
wins,asDruckertaughtus,indirectproportiontoourabilitytoself‐manage,ifwedeliver
organizationsthatdeliverresultsthroughoutsociety.And,myownfirstencounterwith
Drucker’scontributionreallycamethrougharesearchlens.Andmycolleague,GerryPorus(?)
andIwereengagedinaresearchprojectatStanford,whereweweretryingtounderstand
whatseparatedtrulyenduringgreatcompaniesfromothersoverlongperiodsoftime.
And,weweregoingbackintohistoricalarchives,so,forexample,ofcompanieslikeHewlett
PackardandMerckandMotorolaandJohnson&JohnsonandGeneralElectric.And,wewere
studyingthesecompaniesoverthelongcourseoftheirevolution.Andso,you’dbegoing
JIM COLLINS 11_7_09 PAGE 8
throughboxesofarchivematerialatplaceslikeHP,andyouactuallyhaveDavidPackard’s
originaltypewrittennotesfromthevery,veryfirstmeetingonAugust23rd,1937attwop.m.
intheafternoonwhenheandBillHewlettgottogethertoformHewlettPackard.
Bytheway,there’saveryinterestinglittlesidenoteonthat.It’sveryfun.Theydidn’tknow
whattheyweregoingtomake,whichI’vealwaysjustloved.Theygettogetherandsay,“We
decidedtoformacompanyintheradioandelectronicsandelectricalengineeringfield,”very
broadlydefined.Andthen,itgoesontosay,“Thequestionofwhatwewilldesign,
manufactureandsell,however,waspostponed.”[laughter]And,thisisthefoundingofthe
company.
But,ifyouthinkofit,itwasaveryDrucker‐likeapproach.Because,whattheyessentially
weresaying,is,“Ourultimatecontribution,ourultimateproductisnotgoingtobea
calculatororanoscillator.It’sgoingtobeanorganizationthathasvalues.And,ifwebuild
therightorganizationwithvalues,itwilldoremarkablethings.Butthatisourcreation,nota
product.Allthatstuffchanges.”
And,aswestartedlookinginsidetheseorganizations,andwewerestudyingthem‐‐And,I
wasnotparticularlyfamiliarwithDrucker’sworkindepth‐‐keptcomingacrossthesenotes.
And,Ikeptpicturing,like,DavidPackardstandingupintheearlyformativedaysofHP,
wavingthepracticeofmanagement,andgivingasermontoallofthepeopleaboutwhat
you'regoingtodo.
IfyougobackandyoulookattheoriginalstatementofHewlettPackardobjectives,written
byDavidPackardin1957,beforetheywentpublic‐‐Becausehesaid,“We’regoingtohave
pressuresofthemarketsifwegopublic.So,whatwehavetodois,wehavetobeveryclear
whatwearebeforewehitthatpressure.”Writesdownwhatlaterbecamethebasisofthe
JIM COLLINS 11_7_09 PAGE 9
HPway,butwasreallywhathecalledthesetenobjectives,objectives.Where’stheword
“objectives”comefrom?RightfromDrucker,right?
Hewritesthemdown.And,ifyoureadthosetenpoints,theyarestraightoutofThePractice
ofManagement.ItshouldnothavebeentheHewlettPackardCompany.Itshouldhavebeen
theHewlettPackardDruckerCompany,HPD.[laughter]Andthiswastrueacrossmanyofthe
companiesthatwestudied.
And,Irealizedtherewastheseintellectualfingerprints,atpivotalstagesofthese
enterprises.And,aswewerestrugglingwithwhattonamethebookthatcameoutofthis,
wetossedaside125titlesinfrustration.Ourpublisherwasgoingnuts,becausewejustkept
vetoingallofourtitles.Finally,Ijustblurtedout,oneday,“Whydon’twejustnameit
DruckerWasRightandwe’redone?”[laughter]AndweendedupcallingitBuiltToLast,
which,ofcourse,hewas.
Theinterestingthing‐‐wetalkaboutthisquestionofDruckernow,morethanever.Idon’t
believethatthatisjustaslogan,inanyway.Itisanempiricalfact,fromourresearch.Thisis
notaperspective.It’snotaphilosophy.Itisanempiricalfactthat,ifyoulook,systematically,
atthosethatbecamegreatincontrasttothosethatdonot,andyoulookatthosethatwere
greatthatlostit,thatfell,andyouaskthequestion‐‐twochoices:Thosethatfall,fall(a)
becausetheyfailedtolearnthenewstuffasitcomesalong;or(b)becausetheyfailedto
implement,withexcellence,thetimelessprincipleswealreadyknowtobetrue.Theanswer
isveryclearly(b).
Itisveryhardtoarguethatthefinancialcrisiswewentthroughisbecauseallofthefinancial
institutionsweren'tadheringtofundamental,sound,disciplinedmanagement.[laughter]I
believethatPeter’simpact‐‐andothersmayhavedifferentviews.Thisisjustmypeculiar
lens‐‐derivesnotjustfromthespecificideas,butfromhisapproachtoideas,anapproach
JIM COLLINS 11_7_09
PAGE 10
thathashadahugeinfluenceonthewayIliketothinkaboutideas,andothershavehadto
thinkaboutideas.
And,Ithinkthisapproach,atleastthepartthatkindofjumpedoutatme,hasfourpartsto
it.Thefirstis,(a),numberone,hewasdeeplyempirical.And,whatImeanby“empirical”is
notnecessarilyquantitativedata.WhatImeanis,yougooutandyoulook‐‐ashealways
talkedabout‐‐lookoutthewindow,seewhat’sactuallyoutthere.Don’ttrytothinkwhat
theworldshouldbe.Lookatwhattheworldactuallyis.And,baseduponthatempirical
observation,thentoderiveinsights,youlookoutthere.Thenyouderivetheoryratherthan
derivingtheoryandlookingoutandtryingtomaketheworldfityourtheory.
Ithinkthisiswhyhealwayslovedtointeractwithpeople.Bobtoldthestorylastnightabout
meetingwiththeearlymegachurchleaders.Theyweren'tcalledthatatthattime.And,it’s
because,Ithink,that’swherehewasgettingempiricalevidence.And,whenIaskedhim,I
said,“Whydoyouconsult?Whydoyouworkwithcompanies?”Hesaid,“That’smy
laboratory,right.”That’sempirical,hands‐on.
Oh,andbytheway,ontheempirical,ifyoulookattheothergreatthinkers,likeDarwin,
theywerealsoempirical.Imean,youreadpagesandpagesandpagesaboutpigeons,but
fromwhichcomesasingleelegantidea.ThatwasDrucker’sapproachaswell.
Numbertwo,westartedfirst,andalways,withresults,askingasimplequestion,“What
actuallyworks?”Andthen,askingthequestion,“Whydoesitwork?”IrecallaconversationI
hadwithafacultymemberwhenIwasteachingatStanford.And,wewerediscussingpeople
thathadinfluencedourthinking.AndIsaid,“Well,IreallyadmirePeterDrucker.”And,this
facultymemberhadanabsolutelyremarkableresponse,whichwas,hekindofwrinkledhis
noseinthiskindofdisdainfulresponse,andsaid,“Drucker?Oh,buthe’ssopractical.”
[laughter]IthinkPeterDruckerwouldhavelovedthat.[laughter]“He’ssopractical.”
JIM COLLINS 11_7_09
PAGE 11
But,itwasneverjustkindofthedetailsofthemoment.IfyoupickupacopyofConceptof
theCorporation,youdon’tgointoitandsay,“Thisisahow‐tobookonhowtobuilda
corporation.”Itwasbygoingintotherealempiricalandtherealpracticalaspectsofthings,
butthenzoomingwayout,andaskingthebigquestion,“Whatistheroleofthecorporation
andtheevolutionofsocietyatthisstageofhumanhistory?”Soyougetthiswonderfulblend
ofpracticalandverybigquestions,whichbringsmetothethirdaspectofhisapproach.
Hehadthecouragetoasktheaudaciousquestions.IrememberaconversationIhadwith
anotherrolemodelandpersonIadmiredgreatly,JohnGardner,whowroteSelfRenewaland
onleadershipandSecretaryofHealthEducationandWelfareintheJohnsonadministration.
AndJohnGardner,whenIwastalkingwithhimaboutdoIwanttodoafulltraditional
academiccareerandendupdoingatypeofresearchthatwouldleadmeintothatkindof
normalpath,hesaid,“Thatwouldbefine.It’dbeagooduseofyourbrain.But,beawareof
whathastendedtohappen.Bewareofthetendencytoanswerquestionsofincreasing
irrelevancewithincreasingprecision.”[laughter]
And,IbelievethatwhatDruckerhadthecouragetodowastosay,“Youknow,notall
importantquestionscanbeansweredwithincreasingprecision.Butitdoesn’tpreventyou
from,intheend,beingright.”And,hisapproachwastoaskincreasedquestionsofincreasing
significancewithincreasingempiricalrigor.AndIbelievethat‐‐myviewistherewasone
overridingquestion,whichis,howdowemakesocietynotonlymoreproductive,butmore
productiveandmorehumane?
Andthen,finally,thegreatsignatureofitall‐‐andI’llreturntothisattheend,becauseI’m
goingtogotothequestionsaspecthere‐‐isthateverythingwasinfusedwithatremendous
compassionanddeepconcernforthewellbeingoftheindividual.Youknow,ifyoubuilt
JIM COLLINS 11_7_09
PAGE 12
companiesthatdestroyedpeople,ifyoubuiltwell‐managedorganizationsanddestroyed
humanbeingsintheprocess,thiswouldbeafailure.
And,I’mgoingtoreturntotheindividualaspect,here,maybetowardstheend.Showing
hands,howmanyyoungpeopledowehavehere?IhavetobecarefulhowIdefine“young.”
IkeepchangingthatasIgoalong.Okay,I’mnotgoingtosayyoungorold,buthowmanyare
undertheageof30inthisroom?Wonderful.Attheend,youandIaregoingtohavealittle
chat,atleastforabit.IhavesomethoughtsforyouI’vebrought.
Okay.So,whatIwouldliketodoistospendafewminutesinthisnotionoflookingforward,
teeingupsomequestions.Idon’tknowifIhaverealgoodanswersforthesequestions.But,
whatmightbequestionsthat‐‐Idon’tknowifPeterwouldaskthemtodayornot,but
they'requestionsthatoccurredtomeaswelookforward.I’mgoingtosuggestthreeorfour
ofthem,dependingonmytime.And,I’vebroughtaboutten,butwe’llhaveenoughtimefor
threeorfour.
Thefirstquestionthatoccurstomeis,howdowebuildlegionsoflevelfiveleaders?And,as
wehaveengagedinourresearch,whatwedoiswe’realwayscomparingthosethatdid
somethingexceptionalandbuiltagreatcompany,incontrasttoothersthatdidnot.And,I
hadalways,attheverybeginningofthatprocess,discountedtheroleoftheindividual
leader.Thathadalwaysstruckmeasagreatpluckfigure,right.Itbasicallysaid‐‐Whenwe
saidit’sallleadership,webasicallyweresayingwe’reignorant.
Because,whatwesayis,“Well,webelievetheanswerisleadership.Ifsomethingwas
successful,itmusthavebeengreatleadership.”Wewentinacircle.Whatdidwelearn?And
so,Isaid,tothegood‐to‐greatresearchteam,aswewereembarkingontheresearch,“We
willnothavealeadershipansweringood‐to‐great,”whichis,ofcourse,highlyconduciveto
theirfreedomofthought.And,Ihavethisstrangegeneticneedtosurroundmyselfwith
JIM COLLINS 11_7_09
PAGE 13
youngpeoplewhoreallydon’tcarewhatIthink.And,asthegreatprofessorHalLeavitt(?)
usedtoliketosay,thebeststudentsarethosewhoneverquitebelievetheirprofessors.
So,onedayIwalkedintotheresearchteammeeting,thewholeteamhadjoinedhands.And
Ithought,“Well,that’salittledifferent.What’sup?”Andtheysaid,“Today,Jim,istheday
we’vedecidedtotellyouthatyouarewrong.”“Whatabout?”“Aboutthisanti‐leadership
biasthatyouhave.See,ifwelookatthecompaniesthatreallymadethesegood‐to‐great
leaps,youcan'ttaketheleadersoutoftheequation.Imean,toremoveCorkWalgreenfrom
theWalgreen’sstory,orColemanMachler(?)fromtheGillettestory,orDickCooleyfromthe
WellsFargostory,istoignorethedatayoutellustopayattentionto,nottoyou,weinvoke
thatheretoday.Youarewrong.”
And,Ipushedback,andIsaid,“Yes,butwhataboutthecomparisoncompanies,the
companiesthatdidn’tmakeit?Theyalsohadleaders.Theyalsohadleadership.Would
anyoneontheteamliketoarguethatLeeIacoccawasnotaleader?”Chrysler’sa
comparisoncompany.AnybodywanttoarguethatJackEckertofEckertwasnotaleader?
ButEckertwasacomparisoncompany.Youcannotsaythatthedifferentialwasleadership.
Theybothhadleadership.It’slikeanequation,numerator,denominator,crossesout,goes
away,wroteitonthewhiteboard,satdown,andsaid,“Let’sgodosomethinguseful.”
[laughter]
Andtheteam,theirhandstightened.Andtheysaid,“Wethoughtyouwouldsaythat,and
wedidourhomework.”And,thisiswhentheresearchteamhadareallyremarkable
empiricalobservationthatledtoaninsight.Yes,bothsetsofcompanieshadleaders.Butthe
good‐to‐greatleadersweredifferentthanthecomparisons.Theyhaddifferentcloth.And,
thisiswherewehadthisinsightofthelevelfiveleader,thatleadershipishierarchyof
capabilities.Andleveloneisaboutindividualcapabilities.Leveltwoisaboutyourabilityto
JIM COLLINS 11_7_09
PAGE 14
playwellwithothers,right,teamcapabilities.Levelthreeisgood,competent,effective
management.Levelfouris,then,toblendoutwiththeabilitytosetdirectionandtolead.
But,thereisalevelthattiesthemalltogether.Andthefive,thesignatureofthefivewas
theirhumility.Imean,thiswasanempiricalobservationthat,whatseparatedthetruly
exceptional,thetruegreatwinnerswhodidthis,wasnottheirgreat...(inaudible),itwas
theirhumility,defined,really,asanabilitytochanneltheirambitionintosomethingbigger
thanthemselves.Anditwasn’taboutthem.
So,itwasreallyinterestingtalkingtoRickWarrenlastnight.Imean,thefirstlineofhisbook,
right,It’sNotAboutYou,wellthat’sareligiousbook.We’redoinganempiricalstudy,
drawinguponthousandsofyearsofcombinedhistoricalandstatistical,andwe’reselecting
basedonstockreturns.Wefindthesamesentence.Theyunderstood.It’snotaboutyou.
WhenIlookatsomeofthepeoplewhohavebeenassociatedwiththisevent,peoplelike
BobBufordandJohnBachmannandFrancesHesselbeinandRickWarrenandIto’sToyota,
whatdotheyallshareincommon?Theyareexemplarsofthefactthattheyareincredibly
ambitiousbutnotforthemselves.And,thisisthefive.
Iworry‐‐Andmyquestionis,whichwayarewegoingasasociety?Arewegoingdownto
where,increasingly,it’sgoingtobethosewhoareambitiously,primarily,forthemselves,
whowillbethedominantstrain?Or,willitbethelevelfiveswhowillbethedominant
strain?Ifit’stheformer,wegothewayofRome.Sowedon’thaveachoice.
And,whenyoulookinside,aswe’vehadtheprivilegetodo,atevendifficultthingslike
education,wherewehadtheprivilegetostudywhatseparatedschools‐‐TheCenterforthe
FutureofArizonadidthis.Ijusthappenedtobesortofthethesisadvisor,lookingatschools
inpoorLatinoneighborhoods,publicschools,withalloftheconstraintsofpublicschools.
JIM COLLINS 11_7_09
PAGE 15
Andyet,somemanagedtobeattheodds,andtoover‐perform,andtodeliveroutstanding
educationalresultsforthosekids.And,youcomparethemtootherschoolsthatareinthe
exactsamecircumstances,withtheexactsameconstraints,andtheexactsameteachers’
unions,andtheexactsamelimitedbudgets,andthesamekindsofcommunities,whodon’t
over‐perform,theanswercannotbetheircircumstances.And,whatwasreallydifferentwas
that,ineveryoneoftheirschools,therewasalevelfiveleaderlikeJulieTatePeach,who
tookresponsibilitytomakeherschoolinYuma,Arizona,apocketofgreatnessthatwould
deliveroutstandingresults.
And,IgotintoanargumentwiththeSenatoroftheUnitedStatesofAmericaatasessionI
hadaprivilegetodowithagroupofSenatorsabouteducation.And,itwasanargument
backandforth.And,thisSenatorwasarguing,“Themostimportantthingistoincreasethe
budget.”Andmyresponseis,“Ifyouincreasethebudgetthreefold,butyoudon’thavean
armyofJulieTatePeaches,itdoesn’tmatter.”
HowdowehaveaWestPointforeducation?Howdowehavelevelfiveleadersdeployed
intothoseprincipals?That’showwemakeitwork.And,howdowebuildarmies?And,of
course,that’swhatClaremontisallabout.Now,letmegiveyouahopefulsidebecauseI
thinkthere’salotofdarksidetothat.It’sprettyhardtoarguethat,whatwe’vewatchedin
thelastyear,isprincipallyplayedoutbecauseofpeoplewhoweren'tambitiousfor
themselves.[laughter]
I’mdeeply‐‐Ihavegreatfaithinourself‐correctiveability.And,perhaps,wedon’tevenjust
havelevelfiveleaders,butthisyounggenerationcomingup,astheChiefofStaffofthe
ArmysaidtomeatasessionatWestPoint,“Thisisthemostinspiredandinspiring
generationtocomethroughWestPointsince1945.Ishouldgetoutoftheway,letthem
lead.”
JIM COLLINS 11_7_09
PAGE 16
Maybewehavealevelfivegenerationinthemaking.And,thesoonerwecangetthatlevel
fivegenerationintopositionsofresponsibilityandpower,thebetteroffIbelievewewillbe.
So,myfriendswhoareunder30,we’llgetoutofyourway.But,thereisachallenge,an
issue.
And,whatIworryaboutforthisupandcominggeneration,whatIworryaboutforthis
wonderfullyidealistic,collaborative,inspiredgeneration,isthattheygrewupinahistorical
anomaly.Howmanytimesinhumanhistorydowehavethecombinationofglobalstability,
whichwasprovidedbyhavingtwosuperpowersandthenone,andalmostunbroken
prosperityatthesametime?Thisisnotthenormalmodeofhistory.200A.D.Rome,500
B.C.E.Greece,2000B.C.E.Egypt‐‐Icangothroughafewinhistory.Butit’snotthenorm.The
normisusuallyinstability.Anunbrokenprosperityisnotalsothenorm.
So,theygrewupinkindofanartificialtime.Andso,mynextquestionis,howdoweprepare
ourselves?And,howdoestheyounggenerationprepareitselfforthecoming,theferocious
instabilitythatisabouttodescenduponus?I’dlikeyoutopicturewakingupatbelow
MountEverest,abasecamp.And,abigstormcomesblastingthroughthevalley.And,you
canhunkerdowninyourtent.And,whenthestormclears,youcanemergeandyoucango
climbingagain.
But,whathappensif,insteadofbeinginthesafetyandsecurity,thestabilityandprosperity
ofbasecamp,youwakeupasavulnerablelittlespeckat27,000feetonthesideofthe
mountain,wherethestormsarebiggerandfaster,everythingmoreuncertain,everything
moreoutofcontrol?There,youarenotprepared.There,youarenotpsychologically
prepared.Youarenotphysicallyprepared.Thereyoumightbeinrealtrouble.
JIM COLLINS 11_7_09
PAGE 17
And,whatwehavejustbeengoingthroughmightbemoreofawakeupcallthatwe’reat
27,000feet.And,we’reveryunlikelytobeabletogobacktothenice,safestabilityofbase
camp.We’reuponthemountain.And,if,infact,thelast30yearsweretheanomaly,then
we’regoingtobeonthatmountain.Now,I’mconfidentprosperitywillreturn.It’swhatwe
knowhowtodo.I’mnotatallconfidentthatstabilityisgoingtoreturn.
And,speakingasanAmerican‐‐andIknownoteveryoneinthisroomisAmerican‐‐thisis
whereIthinkweareparticularlyexposedtothecompetitorsfromoutsidetheUnitedStates.
WhenImeetwithmyfriendsfrom,say,Russia‐‐Hadagroupcometomylaboratoryfrom
Russia.They'reintheirlate30s/early40srunningthisgiantcompanyinRussia.
And,yourealizethat,intheirlateteensor20s,theywokeuponemorning,andtheirentire
worldhadevaporated.Thetenetsthattheyhadgrownupwith,gone.Theeconomydoesn’t
work.TheentireSocialsystemoverturned.Now,they’vegottolearnhowtooperateinthis
othermode.And,whatyourealize,whenweweretalkingabouttheeconomiccrisis,they
said,“Oh,wedon’tworrythatmuchabouttheeconomiccrisis.Wehaveadifferentterm.
Wejustcallitneweconomicconditions.”[laughter]
And,ItalktomyfriendsfromBrazil,whogrewupwiththingslike30%amonthinflationat
times,whereyoualwaysmakesurethatyoutakeacabnotabus.Because,yousee,youpay
forthecabrightattheend.Andinflationhelpsyouoverthecourseoftheride.[laughter]Or
myfriendsfromArgentina,whosayinArgentina,eventhepastisunpredictable.[laughter]
Here’smypoint.PeopleinIndia,Brazil,Russia,emergingAfrica,they’vealreadybeen
climbingat27,000feetandtheyknowhowtodoit.Andwearegoingtohavetolearnhow
todoit.
JIM COLLINS 11_7_09
PAGE 18
Now,inspeakingtoouryoungfolksonthis,Iwouldliketogiveyouawayofthinkingthat
hasbeenenormouslyhelpfultome,thatcamefromthegood‐to‐greatresearchfordealing
withgreatdifficulty.Anditwas,whatwecametocalltheStockdaleParadox.Andthe
StockdaleParadoxwastaughttousby‐‐Whenweweredoingthegood‐to‐greatresearch,or
triedtomakesenseoftheCEOs.
And,indoingthat,Ijust,bychance,happenedtogettoknowAdmiralJimStockdale,who
wasthehighestrankingmilitaryofficerintheHanoiHilton,shotdownin1967,wasthere
until1974.Theycouldpullhimoutatanytimeandtorturehim,andtheydid.Hewas
torturedover20times.
And,IhadtheprivilegetogettoknowAdmiralStockdale.And,weweregoingtothefaculty
cluboneday.And,Ihadreadhisbook,InLoveAndWar,whichwaswritten,inalternating
chapters,byhimselfandhiswifeabouttheiryearswhenhewasinthecamp.And,Igot
depressedreadingthebook,becauseitseemedsobleak.Itseemedsodifficult.Itseemed‐‐
Youknow,it’slikewecanallendureanythingifweknowit’sgoingtocometoanendandwe
knowwhen.
But,whatifyoudon’tknowifit’severgoingtocometoanend?Andyoucertainlydon’t
knowwhen.So,IaskedAdmiralStockdalehowhedealtwiththat.Andhesaid,“Youhaveto
realize,InevergotdepressedbecauseInever,everwaveredinmyfaiththat,notonlyI
wouldgetout,butIwouldturnbeinginthecampintothedefiningeventofmylife.That,in
retrospect,Iwouldnottrade.”
Later,whenwewereupthehill,Iaskedhim‐‐Isaid,“AdmiralStockdale,whodidn’tmakeit
outasstrongasyou?”Andhesaid,“Easy.Itwastheoptimists.”Isaid,“Theoptimists?You
soundedoptimistic.”Hesaid,“No,Iwasnotoptimistic.IneverwaveredinmyfaiththatI
wouldprevailintheend,butIwasnotoptimistic.”Isaid,“What’sthedifference?”“Well,the
JIM COLLINS 11_7_09
PAGE 19
optimistsalwaysthoughtwe’dbeoutbyChristmas.And,ofcourse,Christmaswouldcome
anditwouldgo.Andthen,weweregoingtobeoutbyEasterandThanksgiving.Andthen,
Christmaswouldcomeagain.Andtheydiedofabrokenheart.”
Andthat’swhenAdmiralStockdalegrabbedmebytheshouldersandsaid,“ThisiswhatI
learned.Whenyou'refacing‐‐you'reimprisonedbygreatcalamity,bygreatdifficulty,by
greatuncertainty,youhaveto,ontheonehand,neverconfusetheneedforunwavered
faith,thatyouwillfindawaytoprevailintheend,with,ontheotherhand,thedisciplineto
confrontthemostbrutalfactsweactuallyface.Andwe’renotgettingoutofhereby
Christmas.”
AsIspeaktothiswonderful,upandcominglevelfivegeneration,andIwashavinga
conversationwithafriendofminewho’sgoingtoberunningfortheU.S.Senate,andIasked
himwhy.Hesaid,“Nationally,asweencountergreatchallenge,wemusthavetheStockdale
Paradox.”And,asyougethitbythethingswemightgethitby,neverlosefaith,andnever
denythosebrutalfacts.That’sthestartingpointforourpreparation.
Tworelatedthoughtsonthatparticularquestion.AnditreallytiestotheDruckerSchool.It
tiestotheDruckerInstitute.IttiestoClaremontandittiestoPeter.Imentioned,earlier,the
workBuilttoLast.Anditwasveryinteresting.Wewerestudyingenduringgreatcompanies,
incontrasttoothers.
Wentbackrecentlyandrealizedweselectedthestudysetforthatstudyin1989,two
decadesago.All18oftheBuilttoLastcompaniesarestillstand‐alone,independent,and
almostallofthemverysuccessfulcompaniestoday.Ifyoutookarandomsampleoflarge
publiclytradedcompanies20yearsago,whataretheprobabilitiesthatall18inyourrandom
samplewouldbestand‐alone,independent,andlargelysuccessfultoday?Thenumberis
less‐‐Thepercentageisabout0.2%probability.
JIM COLLINS 11_7_09
PAGE 20
Notonlythat,15ofthe18BuilttoLastcompanieslivedthroughthe1930sDepression.What
dotheyteachus?Whathasenabledthemtohavethat?Whatdidwefindthatseparated
them?Whatwefoundisthatwhatreallyseparatedthemwasnotnecessarilythattheyhad
smarterstrategies,althoughtheyoftendid,orthattheyweresortofmorefinanciallysavvy,
althoughtheyoftenwere.
Itwasbecausetheywerefounded,firstandforemost,andbuiltalwaysonarock‐solidsetof
corevaluesthatarenotopenfornegotiation.And,ifyoulookatwhatgavethemthereason
tostruggle,thereasontofight,thereasontoendure,itwasn’tstrategic,itwasvalues.And
thatiswhatthisschoolteaches.Thegreatironyis,peoplethinkthatvaluesaresoft.I’ve
neverunderstoodthatidea.
Thesecondpointiswehavenowdonetwodecadesofresearch,studyingthosethatdowell
incontrasttothosethatdonot,acrosssixdifferentstudies,twointhesocialsectors,fourin
business,7,000yearsofcombinedcorporatedata,andalldifferentkindsoflensesand
industriesandsoforth.Iwouldliketosuggest,maybeevenassertasanempiricalfact,
somethingthatstandsout.
And,aswefacethisdifficultworldthatwe’reheadinginto‐‐notthatwe’releaving,we’re
headinginto‐‐theevidenceisoverwhelming.Whetheryouprevailorfail,endureordie,
whetheryou’vebuiltsomethinggreat,whetheryoubuiltgreatnessoutofcalamityorfrom
scratch,dependslargelyonwhatyoudotoyourselves,notonwhattheworlddoestoyou.
And,somethingthatPeterhadalwayssaid,butnowwehaveseenempiricallyinour
research,thereisnoquestionthat,nomatterwhattheworldthrowsatus,ourdestiny,our
fate‐‐andthisisanempiricalfact‐‐lieslargely‐‐maybenotentirely,butpredominantlyin
ourownhandsfromourowndisciplinesandourownchoices.
JIM COLLINS 11_7_09
PAGE 21
Mythirdandprobablylastquestion,soIhavetimetospeaktoouryoungpeopleherealittle
bit‐‐butitleadsintothat‐‐Howdoweincreasethepercentageofpeopleontheplanetwho
findandlivethethreecirclesoftheirpersonalhedgehogconcept.Okay,sowe’lljustkindof
gointotheideaofmanagingyourself,butthenscalingitupthroughorganizations.
Ifyouthinkabout,sortof,howpeopleapplythemselves,whenwegobackandwelookat
thegood‐to‐greatdataandsomeoftheotherdata,wefindthatthere’sthesethreecircles.
And,youputyourenergiesinthemiddleofthreecircles.Andthefirstcircleiswhatyou're
passionateaboutandwhatyoulovetodo,andwhatyoustandfor.Andthesecondcircleis
whatyoucanbethebestat.Andthethirdcircleiswhatdrivesyoureconomicengine.And
youfocusyourenergiesthere.
But,let’sdropthatdownalevel,totheindividual.Howmanyofthefolksunderage30in
herehavehadcrossyourmindthethought,“IwonderwhatI’mgoingtodowithmyself.”
[laughter]Okay.I’dlikeyoutothink,then,aboutfindingyourownthreecirclesatan
individuallevel,whichisthinkaboutitthisway.Imaginethatyoucouldengageyourenergies
andyourtimedirectlyinthemiddleofthreetests.
Firstissomethingforwhichyouhavegreatpassion,thatyoulovetodo,andthatabsolutely
reflectsyourvalues.And,whenyouwakeupinthemorning,thereisthissenseof,“My
goodness.EvenifI’mgettingpaidforthis,IwouldwanttodoitevenifIwasn’tgettingpaid
forit.”Now,imagineif,inadditiontothat,youcouldmarryittoasecondcircle,whichis
findingwhatyou'regeneticallyencodedfor.Andthere’sabigdifferenceinwhatyou'regood
atandwhatyou'regeneticallyencodedfor.
Idiscoveredthisasayoungperson.Iwentofftocollege.IthoughtIwouldbea
mathematician.Ihaddonewellonmathtests.But,whenIenteredcourseslikerealanalysis,
JIM COLLINS 11_7_09
PAGE 22
Imetthosewhoweregeneticallyencodedformath.[laughter]Notbeingoneofthem,I
neededtofindanotherversionofmythreecircles.[laughter]
Andnow,imaginethethirdcircle.Asyou'reengagedinsomethingthatmakes‐‐thatisof
greatvalue,it’sofeithersocialoreconomicorbothofvalue.Itmakesacontribution.You
areuseful.Now,imagineyouhaveallthree.“Man,I’mpassionateaboutthis.Ilovetodoit.
Itexpressesmyvalues.I’mgeneticallyencodedtodoit.WhenIdoit,Ifeellikeafishin
water.Andthen,finally,third,I’museful.”
Now,whatpercentageoftheworlddoyouthinkhasthat?Fivepercent?Maybenoteven.
Whatwouldhappentotheworldif‐‐Let’ssayit'sthreepercent‐‐ifwethenmadeit20%of
peoplewhoaredoingwhatthey'repassionateabout,geneticallyencodedfor,andare
useful,areinpositionsofrealcontributionandvalue?
Now,Idon’tknowtheanswerofhowwemakethatpercentagegoup.But,linkingbackto
theideaofMazlo(?),howdidhedescribeselfactualization?Itwasn’thangingoutonthe
beach.[laughter]Hedefinedselfactualizationasdiscoveringwhatyouweremeanttodo
andcommittingtotheardorofpursuingitwithexcellence.Thepurposeoffreesociety,I
wouldsuggest,istosystematicallyincreasethepercentageofpeoplewhodoexactlythat.
Andthen,theycandoitforverylongperiodsoftime.
Wewereoverattheinstituteyesterday,andthere’sthisbookshelfwithallofPeter
Drucker’sbooks.AndIaskedthequestion‐‐Bobmentionedthislastnight‐‐“Whichbook”‐‐
becausetheywerelaidoutchronologically‐‐“didhewritewhenhewas65?”Management.
And,ifyoulookontheshelf,wheredoesitfall?Onethirdofthewaythrough.Nottwo
thirds,onethird.Twothirdscomeaftertheageof65.Isn'tthatjustwonderfuland
intimidating?[laughter]
JIM COLLINS 11_7_09
PAGE 23
Asalastquestion‐‐andIdon’tneedtospendalotoftimewithit‐‐Aswelookatpeoplewho
aregettingolderandolderandwereyoungat60and70and80,howdowereversethis
tendencytothinkthat,at65,ourworkisbehindus?Ifwelookatthatbookshelf,actuallywe
shouldlookatitas,whenwehit65,everythinghasbeenapreparation.Andonlyonethird
ofourbestworkisdone.
WhenIaskedPeterDrucker,whenhewas86,whichofhis26books,atthatpoint,hewas
mostproudof,hesaid,“I’mstillworkingonit.Thenextone.”[laughter]Now,withinthat,I
willleaveonequestionforthosewhohavemovedin,whatBoblikestothinkof,ashalftime.
Ithinkthereisaquestionthatdoesdeserveananswer.ItmightbeonethatIchannelsome
ofmyenergiesinto.Forthosewhoarethinkingaboutbeingusefulafterthey’vebeen
successful.Iwasatagroupgatheringofphilanthropists,whoweresuccessfulbusiness
peoplethathavemovedintophilanthropy.AndIbroughtaquestion.Whatsystematically
separatessuccessfulbusinesspeoplewhobecomegreatandeffectivephilanthropistsfrom
successfulbusinesspeoplewhobecomemediocrephilanthropists?Theyhadneverthought
aboutthequestion.
Theythoughtitwassimplygoodenoughtobecomeaphilanthropist.Iwouldsuggestitis
not.Andyet,theinterestingthingis,wedon’treallyknowwhatseparates.Withonething
thatcameoutoftheconversation,thosewhoarethegreatandeffectivefocusedonresults
andnotoncredit.
Andso,aswebringmytimetoaclose,Iwouldliketonowspeaktoouryoungpeopleand
giveyouten“to‐dos”toconsider.Thoseofyouwhoare40yearsyoung,50yearsyoung,60
yearsyoung,youcanalsoconsiderthese.But,Ispecificallywanttospeaktoouremerging
levelfivegeneration.And,theseareforyourconsideration.Thebeststudentsarethosewho
neverquitebelievetheirprofessors.
JIM COLLINS 11_7_09
PAGE 24
Numberone.Buildapersonalboardofdirectors,peopleselectednotfortheir
accomplishmentbutfortheircharacter.Thepeopleyouwouldbeembarrassedtocometoif
you’rethinking,“Isthisreallytherightthingtodo?”thatyourealizethat,evenaskingthem
wouldbeembarrassing.Irememberwhenthepersonalboardideaoccurredtome.Iwas25
yearsold.IdidnothaveafatherwhoIlearnedanythingfromexceptbadhabits.And,I
alwaysresentedthefactthatmyclassmatesincollegecouldcalltheirdadandaskforadvice.
AndIthought,“Wow,thatisjustodd.”Andthen,Ibegantoresentit.
Andthen,Ifinallyrealized,well,ifIdidn’thaveafather,I’llmakeone.I’llcreateone.So,I
startedreadingbiographies.IfiguredifIdidn’tgetadad,I’lljustinventone.And,asreading
thosebiographies,IwasdrivingdownElmStreetinPaloAltooneday.And,Iwaslisteningto
theseinterviewswiththegreatPresidentHarryTruman,donebyMerleMiller.
And,therewasthiswonderfullinewhereHarryTrumansays,“Ifyoudon’tknowthe
differencebetweenrightandwrongbythetimeyou're30youneverwill.”And,Ipulledoff
thesideoftheroad.I’mpanting,“I’m25yearsold.I’vegotfiveyearstofigurethisout.”
[laughter]Andhencewasborntheideaofthepersonalboardofdirectors.
Yourpersonalboarddoesnotalwaysneedtoknowthey'reonyourpersonalboard.Peter
Druckerwasonmypersonalboardandneverknewit.Andhewasnotselectedforthat
because,inmymind,hewasthegreatestmanagementthinker,butsimplybecausehewas
oneofthegreatestpeople.
Numbertwo.Pleaseturnoffyourelectronicgadgets.Notforothers,butforyourself.
Effectivepeopletaketimetothink.Beginthedisciplineofputtingwhitespaceonyour
calendar,wherethereisnophone,noemail.Iwasgoingtosaynofax,buttheydon’teven
havethatanymore.NoTwitter,noemails,noconnections,andengageinthisglorious
JIM COLLINS 11_7_09
PAGE 25
pocketsofquietude.DoyouknowthatRickWarrenreadsabookeverysingleday?Abooka
day.Abookaday,365daysayear.Heread1,000booksinthreeyears.
Numberthree.Thiswouldbeagreattimeinlifetoworkonyourthreecircles,andperhaps
considertheideaofyoustudyingyourselflikeabug,right,andofmakingempirical
observationstosay,“Whatdoesthisbugdo?Whatisthisbugpassionateabout?And,what
isthisbugencodedfor?”Andwithnojudgment.Don’tjudgeandsay,“Thisbugshouldbe
betteratmath.”Nonjudgmental,empiricalobservationofwhatyoureallyarepassionate
aboutgeneticallyencodedfor,andwhereyoucanbeuseful.And,getinputfromthosewho
loveyou,whoknowyouasempiricaldataonyou.
Numberfour.Whatisyourquestions‐to‐statementsratio?And,canyoudoubleit?John
Gardner,anothermemberofmypersonalboard,broughtmeintohisofficeonedayand
said,“Itoccurstome,Jim,youspendwaytoomuchofyourtimetryingtobeinteresting.”
[laughter]“Whydon’tyouchannelyourtimearoundbeinginterested?”Thattenseconds
changedmylife.
Imaginegoingintoeverysituation,notwithhowtobeinterestingbuthowtobeinterested,
howtoaskquestions,howtolearnfromeverybodyyoumeet.Whatisyourquestions‐to‐
statementsratio?And,canyoudoubleit?
And,numberfive.Forthosewhohavedealtwithhealth,thisonealso,then,reallyjumps
out.And,atsomepoint,allofuswill.Addthequestion,aspecificquestion,toliveby.Ifyou
wokeuptomorrowmorninganddiscoveredthatyouhadinherited$20milliondollars,and
youalsodiscoveredyouhadaterminaldiseaseandyouonlyhad10yearstolive,what
wouldgoonyourstop‐doinglist?
JIM COLLINS 11_7_09
PAGE 26
Numbersix.Startyourstop‐doinglist.Howmanyherehaveato‐dolist?Howmanyhavea
stop‐doinglist?Whenweweretalkinglastnight,RickWarrenandI,andPeterDruckerhad
askedthesamequestion,always,ofhim,everytimehecame,not“Whathaveyoudone?”
but,“Whathaveyoustoppeddoing?”BecausesomeonelikeRickWarrendoesn’texactly
haveashortageofenergytodostuff.Andtherealtaskistoalwaysbeclearaboutwhatto
notdo,whattostopdoing.
Numberseven.Unplugtheopportunitiesthatdistractyou.Justbecausesomethingisaonce‐
in‐a‐lifetimeopportunityisafactbutnotareason.Ifitdoesn’tfityourthreecircles,
remembertherewillalwaysbemanyonce‐in‐a‐lifetimeopportunities.
Numbereight.Howdowebuildthatlegionoflevelfiveleaders?Findsomethingforwhich
youhavesomuchpassionthatyouarewillingtoendurethepain.
Numbernine.Greattimeoflifetoarticulatethevaluesthatyouwillnotcompromise.Asa
guidingconsolation,rememberthisthingaboutthe18andthe15companiesandwhatheld
them?Well,thesameappliesinindividuallevel.Ifwe’regoingtogothroughwhateverwe’re
goingtogothrough,what’stheguidingconstellation?Itstartsnotfirstwithourstrategies
butwithourvalues.
Andnumberten.Preparetolivealifewhere,atage65,you'reonethirdofthewaythrough
yourwork.
So,Iwouldliketoclose,inthelastfiveminutes,backwithPeter.Imentionedearlierhis
concernandcompassionfortheindividual.Iwasaveryafraidindividualin1994.Iwas
completelyunknown.AllIknewisthatIdidn’twanttofollowatraditionalpath.Iwantedto
carvemyownpath.And,Iwasleavingtheacademicworld,andIwasreallynervousabout
whetherthiscouldwork.
JIM COLLINS 11_7_09
PAGE 27
And,IhadmetagoodfriendofminewhoknewPeterDrucker.And,hesaid,“Whodoyou
admire?”ImentionedPeter.Hesaid,“Well,maybePeterwouldliketotalkwithyou.”I
thought,“Peterwouldn’twanttotalkwithme.Whywouldhewanttotalkwithme?”And
then,onedayIgetthismessageonmymessagemachine,“ThisisPeterDrucker.Callme.”
AndIcallhim.AndI’mcallingfromtheSeattleAirport.AndI’mtalkingintothephone
becausethere’speoplearound.And,Ihearhimyellthroughthephone,“Speakup!I’mnot
younganymore!”SoI’myellingintothephone.[laughter]
Scheduledthisdaytocomedown.Iwillneverforgetthemomentwhenhecametohisdoor.
Hecomestothedoor.Andhereachesoutandgrabsmyhandwithtwoofhis.Andhebrings
meacross,andhesays,“Mr.Collins,Iamsoverypleasedtomeetyou.”HesaysthatbeforeI
haveachancetosay,“Itisanhonortomeetyou.”
Andwesit,asmanyinthisroomhavesat,withhiminthewickerchair.And,youkeep
wantingtoaskPeterDruckerquestions.Butyoudon’tgetachance,becauseheisaskingyou
questions.AndIrememberhowhisbrainworked.Wewenttolunch,andhehadadouble
espressoandaglassofmerlot,preservethecore,stimulateprogress.[laughter]
Andhegavemegreatsolaceofrealizingthat,youknow,hestumbledaswell.Iremember
describingthegreatfrustrationofwriting,andthenhavingtowriteawholechapter,and
thinkingitwasn’tanygood,andthrowingitinawastebasket.Andhelookedatmeandsaid,
“Thatisimmenseprogress.”Irememberthateverytime,now,Ithrowawholechapterin
thewastebasket.Progress.
And,hetaughtmetheidea,thatday,thatentrepreneurshipisnotabusinessidea,it’salife
idea,thatyoucandoapaint‐by‐numberskittolife,oryoucantrytopaintamasterpieceon
ablankcanvas.Attheendofthatday,whichwasoneofthose‐‐Istillhaveallthenotes,of
JIM COLLINS 11_7_09
PAGE 28
course.Buthesaidsomethingthathascomebacktomeoverandoverandoverandover
andoveragain.
Heturnedtomeinthatwonderfullychallengingandlovingway.Andhesaid,“Icanseethat
youareveryworriedaboutyoursurvival.You’llprobablysurvive.”[laughter]“Andyouworry
alot,atyourage,abouthowtobesuccessful.That’sallfineandgood.You’llprobablyfigure
thatout.But,ifyoureallywanttomakegoodonthisdayandthistime,whydon’tyoureally
thinkabouthowtobeuseful?”Andthat’sthelevelfivequestion.Idon’tseemyself‐‐Iseeit
asajourney.Butthat’sthelevelfivequestion.Howdowebeuseful?
Andso,asIsaidearlier,Ibelievetherearetwowaystochangetheworld,thesword
meaningaction,andofthepen.And,whichiswhythisideaofhaving...(inaudible)and
Druckeronthesamebuildingasactionandpen.And,whenyoungpeopleask,“WhatcanI
dotomakeadifference,”Imightsuggest,“Getyourhandsonanorganization.Ifyoucan't
findone,startone.BelikeWendyCopp.Andemploythedisciplines,thedisciplinesof
management,whichwillamplifyyourleadership,applyingeverythingyoucanlearnfrom
Drucker,toleaditwithdisciplinedimpact,tomultiplyyourownpersonalimpact,bya
thousand‐fold,and,therefore,tobeusefultimesathousand‐fold.”
And,ifthereisanybetterwaytohonorthelegacyofPeterDrucker,Icannotthinkofit.And,
hewouldsmile,notbysayinghewasagreatman‐‐whichhewas‐‐butbygoingoutand
makingourselvesuseful.Andso,Ileaveyouwiththat.Pleasegooutandmakeyourselves
useful.Thankyou.
[applause]
IRAJACKSON:Thankyou,Jim,formakingyourselfsousefultousonthisveryspecialday.
Andthankyouforbelievinginfreespeech.[laughter][applause]WhenIcalledJimandasked
JIM COLLINS 11_7_09
PAGE 29
himtobethekeynotespeakerfortheDruckerCentennial,hesaid,“Whyme,Ira?”AndI
said,“Becauseyou'rethelivingDrucker,Jim.”Andhesaid,“NoI’mnot.”SoIsaid,“Well,let
metryamorecompellingargument.Peterwouldwantyoutobethekeynotespeakerathis
Centennial.”
I’mgoingtoembarrasshimalittlebit,now.AndIdon’tmeantobeungrateful,butit’s
genuine.WehavethishugedilemmaatClaremontGraduateUniversityandatthePeterF.
DruckerandMasatoshiItoGraduateSchoolofManagement.Thankstothegenerosityof
somespectaculardonors,wehavethePeterF.Druckerchairinmanagementasaliberalart.
Andithasnotyetbeenfilled.SoJim,Iwanttoremindyouthat,whenyou'repreparedto
comedownfromthemountain,andfromBoulder,wewouldbedeeplyhonored,aswould
Peter,tohaveyouasourveryfirstPeterF.Druckerchairinmanagementasaliberalart.
[applause]
Imentionedthatwe’reasmallorganization.AndIdon’thavethegiftthatIknowwe’ve
preparedforyou,Jim.ButIdowantyoutoknowthatthiswasn’tentirelyafreespeech.In
additiontosomememorabiliaoftheschool,wehaveaplaquewhichsays,onbehalfofallof
us‐‐andIgettosignit‐‐we’remakinga$1,000dollarcontribution,inyourname,toanon‐
profitofyourchoiceasagestureofthanksandappreciationforyourbeingsousefultous
today.
[applause]
END
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