The Tim Ferriss Show - #361: Jim Collins — A Rare Interview with a Reclusive Polymath

Starting point is 00:00:00 At this altitude, I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question? Now would you see me at the end of time? What if I did the opposite? I'm a cybernetic organism, living tissue over a metal endoskeleton. The Tim Ferriss Show. This episode of the Tim Ferriss Show is brought to you by LinkedIn. The right hire can make a huge impact on your business. The wrong hire can create your business. And I have seen example

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Starting point is 00:05:13 at home anytime you want. Check it out. Go to onepeloton.com and use the code TIM to get started. Well, hello, boys and girls. This is Tim Ferriss, and welcome to another episode of The Tim Ferriss Show, where it is my job each episode to deconstruct, tease out the habits and routines, best practices, life lessons, and so on from world-class performers from many, many different disciplines. My guest today is Jim Collins, and this is a rare treat because Jim very, very seldom does any media or interviews whatsoever. I have wanted to speak with him for more than a decade, in fact, and it was worth the wait. This conversation over-delivered on every level I can imagine, and I really hope you enjoy it as much as I did. So who is Jim Collins, this mysterious, reclusive mastermind, polymath? Jim Collins is a student and teacher of what makes great

Starting point is 00:06:13 companies tick. And a Socratic advisor will get a better idea of what that means, particularly in the beginning of the interview where he wants to ask me questions. So we do get to Jim's story, but he wants to, and wanted to, even before we started recording, ask to ask me questions. So we do get to Jim's story, but he wants to, and wanted to, even before we started recording, ask me a few questions. So let me get back to the bio. He is student and teacher of what makes great companies tick. And that is an understatement. He really has delved into the data and a Socratic advisor to leaders in the business and social sectors. He's authored or co-authored eight books that have together sold more than 10 million copies worldwide. That's a lot of books, including Good to Great, Good to Great in the

Starting point is 00:06:51 Social Sectors, Built to Last, How the Mighty Fall, Great by Choice, and his newest work, Turning the Flywheel, which gets into all sorts of details about the self-perpetuating, in some ways, models behind Amazon, Vanguard, and so on. Fascinating concept and very practical examples. Driven by a relentless curiosity, which you will get front row seats for, Jim began his research and teaching career on the faculty at the Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. In 1995, he founded a management laboratory in Boulder, Colorado. In 2017, Forbes selected Jim as one of the 100 greatest living business minds.

Starting point is 00:07:31 And we talk about not just what makes good companies great. We get into that a bit, but really we're digging into Jim himself. We talk about how he tracks time, how he breaks up his day, his sleep optimization, his stories related to Peter Drucker, which are just amazing, and so on and so forth. He's also, as I might have already inferred, multifaceted and multi-talented. He's an avid rock climber, as one example, and has completed single day ascents of El Capitan and Half Dome in Yosemite Valley. And if you don't know what that means, just take my word for it. It's very impressive. You can find more about Jim at jimcollins.com. And now without further ado, please enjoy,

Starting point is 00:08:15 and I certainly enjoyed it, please enjoy this wide-ranging conversation with none other than Jim Collins. Jim, welcome to the show. I'm really happy to be here. And I'm hoping that you wouldn't mind if I start by exercising a bit of my own curiosity just to ask you some questions to begin our conversation. I would love to jump into it any way that you would like. So I'm game for questions. So I'm dying to ask, what did you do your Princeton senior thesis on? My senior thesis, which took some extra time to complete, was on the phonetic and Semantic Acquisition of Chinese Characters by Native English Speakers. And it was looking at language acquisition, but specifically what most people in the West would consider ideograms. And there are a few different layers of meaning or context for each character that one might acquire. So the thesis was about the different approaches,

Starting point is 00:09:25 the pros and cons of various methods for acquiring these characters. And what is language acquisition? It's a major I've never quite heard of, and I'd be curious what its essence is. So within the East Asian Studies department, you had to pick a primary language. And I chose Japanese because I had spent a year in high school in Japan going to a Japanese school as an exchange student. But I ended up taking primarily Chinese classes because my Japanese level was already decently high. And within the context of that department, language acquisition would be focusing on, and this is really good, it's a very good question, because the way that I look at language is really acquiring concepts and almost an operating system for thinking that is associated with a different culture. And that would generally, in, say, a language like Chinese, and most languages start with the phonemes, the sounds

Starting point is 00:10:33 themselves. And in the case of something tonal, like Mandarin, you're actually going to be doing a lot of training. It's almost like going to the gym and lifting weights because to produce a sound like or a word like yes which is maybe or if you want to ask with a retroflexive tongue like what is that thing you you really need to develop musculature that you have not developed before as a native english speaker and then after you've developed the basic uh the basic phonetics and pronunciation verbally you would move into the writing and for some scripts and the writing tells you a lot about the thinking of a given culture and i think of culture as a sort of a collection of shared beliefs and habits.

Starting point is 00:11:30 Some are purely phonetic, like we have our Romanized alphabet, and then others have multiple layers, like Chinese, where you have a character that's composed of radicals, each of which has a particular connotation in terms of meaning and the etymology. So all of that is, those would all comprise ingredients in the recipe that is language acquisition. And forgive me for asking you a follow-up question on that. I'm curious, just as you've clearly come from both a love of language, but also a study of language. How much do you think the language in which you're operating, whether that be mathematics, or whether it be Japanese or Chinese or English,

Starting point is 00:12:19 either constrains or enhances the concepts that we develop. I would say almost completely. I think the, I can't remember if it was Wittgenstein or, who said the, what is it, the limits of our language or the limits of our world, or something to that effect. I really feel like language and thinking are inseparable. And therefore, part of the appeal to me in acquiring other languages, studying other languages, even if I only use them temporarily, like I did when I visited Turkey or Greece, these places,

Starting point is 00:13:00 I still study the languages very intensely because it gives you, in my experience, a different lens through which to process about someone by not just the language they speak, but the particular dialect within that language that they choose. So, that can apply to English and the particular nuances or predilection someone has in their own, say, grammar, vernacular, even in a given family, but it can also apply to coding. And then within coding, you have different coding languages. And they tend to reflect, in many instances, different personalities and different value systems, different priorities. So that's how I would think about that. Yeah, you mentioned Wittgenstein. I'm a no expert on Wittgenstein. I had a quarter in college, which the main focus of the work I was learning in was in Wittgenstein. And I remember the professor saying to me, well, what's marvelous about Wittgenstein is he said something along the

Starting point is 00:14:20 lines of, he lays out very clinically what we can meaningfully talk about. And then the professor adds, and of course, then there's the great punchline, which is that most of what's really important, we can't talk about. So, because the words can't go to the mystical. So, very, very interesting. And I've often thought about this when I wrestle with concepts as I'm wrestling, uh, in, in my own research. And one of the first questions I ask people often ask me will say, how do you, how do you develop a concept or how do you decide to come at something that would allow you to say, you know, articulate something you're seeing through the lens of say, the level five hierarchy or the preserve the core, stimulate progress, duality or whatever.

Starting point is 00:15:11 The first question I always ask myself is, what's the conceptual vessel, right? Because to get a concept, there's different kinds of concepts, right? You've got dialectics, you've got hierarchies, you have stages, you have equations, you have categories, right? And one of the first most important things to do is to say, well, if you're looking at something, what's the best kind of if I read it right, that you had crossed paths with one of our great nonfiction writers seminar that McPhee used to teach. I don't know if he still teaches it, but I did have a chance to spend some time with the incredible McPhee. Yeah. And just before we launch into our broad conversation, what was it like to have a class from McPhee? I mean, I have never met McPhee, but I've been a huge, almost student of how he writes. Of course, and I love the most recent work, I think it's called Draft No. 4,

Starting point is 00:16:34 where he describes to all of us who struggle with words the struggle of writing. But he's got those great books from years ago, A Sense of Where You Are, about Bill Bradley, and he has the Archdruid book. And he has The Control of Nature, which recently, with all of the fires and so forth happening in California, I actually went back to read to kind of remind myself of how McPhee was writing about these things before. And he had just such a marvelous way of being able to use words to really exercise his curiosity and see things and then put them in these marvelous forms. And I've often thought, boy, if you could, like, learn from him how to write.

Starting point is 00:17:16 So as a proxy for that, what would you, you know, as those of us who write, we all know how hard writing is, right? Nobody would ever say writing's fun. What did you take from McPhee being able to really learn directly from him? I never get tired of talking about McPhee, although I worry about invoking his name in a sense because I feel like I'm such a shameful, repetitive writer full of all sorts of fluff compared to his tight prose. His prose is tight. I mean, he's the consummate version of that Twain line about the difference between almost the right word and the right word is the difference between a lightning bug and a lightning bolt. Right. So with the sort of preface that I in no way compare myself to McPhee or claim to have had all of his magic rub off on me,

Starting point is 00:18:21 the class was absolutely, this is me looking for the right word, looking for the lightning and not the lightning bug. I don't use this expression much, but it was really paradigm shifting for me in many respects when it came to writing and thinking. And I'll mention a few things before I directly answer your question. Number one is I've carried my notes from that class with me everywhere, meaning in every place I have lived since I took the class, which would have been in probably 98 or 99. So I've been carrying these notes for 20 years now. So that should tell you about how highly I value them. The second is, I remember very clearly when we had our first round of feedback on some initial writing task that we had been assigned. We had three, I think it was three to five page writing assignments each week. And we would have a seminar with all the students together.

Starting point is 00:19:24 And then we would have one-on-one sessions with McPhee. And I remember the first time he handed out in class the redlined versions of our assignments. So the printouts with his red ink on them. And in almost every case, he led into it by saying, I just want you to know before I hand these back that you are all good writers. So I don't want you to take this the wrong, to identify the fat on the sentences that you're putting on the page. And what ended up happening, I should say that's on the micro level. On the macro level, and we can come back to this, and I do have questions about your conceptual vessel comment earlier. It was structure. It was thinks about structure and he did a number of interviews with the parish review on non-fiction writing which are also really worth reading but my grades in every other class went up and yes it's multifactorial. There are all sorts of other things that could have contributed, but the correlation between starting that class and all of my other grades improving tightening up my thinking and it was forcing me to on a weekly basis justify the use of specific words and uh mcphee is a real stickler for the

Starting point is 00:21:36 right word and if you use something that is vague that seems like like a lazy backup option that you tend to default to a lot, he will spot that very, very quickly. And it was a wonderful, wonderful class. And he is a very entertaining teacher as well. It's not like having a clinical autopsy done of your work each week, although he is also very dispassionate and certainly not trying to just make you feel good with his feedback. But he, over the years, has developed a very entertaining style. I remember at one point convey he said or she said. And he brought up the very real example when people say, you know, he ejaculated and then he just, you know, went on this riff about how unnecessary that was. And it got a good chuckle out of the students, of course, because there was

Starting point is 00:22:39 a lot of heavy lifting to come 20 minutes later when we're going to actually jump into some type of task. So it's a long answer. But McPhee is, along with a handful of other people I can point to very specifically, one of the people who has had the biggest impact on my writing, but more importantly, on my thinking and how I think about structured thought. And I want to say one thing about Wittgenstein really quickly before I forget, and that is many of, or I shouldn't say many, but a surprising number of the people I respect for clear thinking have an affinity for Wittgenstein. Reid Hoffman, the co-founder of LinkedIn, would be another example of that. And I think that's worth mentioning just because I think philosophy, there's certain categories or labels of the fields of study that sometimes get pushed to the wayside as impractical. And I think the study of language and the concepts

Starting point is 00:23:47 that language represent is extremely, extremely valuable. I mean, it's kind of one step above consciousness if we're looking at like the foundational layers upon which everything else is built. So, let me ask a question, if I may. Yeah, please. And thank you for letting me start with exercising my curiosity. It's wonderful to have a chance to begin with questions, but questions work in both directions. Oh, for sure. And I have so many questions, but I'm going to try to prioritize them a bit. But the conceptual vessel term that you used, or phrase I should say, could you give an example of choosing the right conceptual vessel? Yeah. So maybe I'll use a couple, but let me start with one. So back when we were working given the research team the instruction that I didn't

Starting point is 00:25:07 really want to have a leadership answer. And the reason for that is because I was always skeptical, especially from the build to last research, which had come before, of placing too much emphasis on having a single leader. Number one, if you're going to build something truly enduring, it has to transcend the leader. They one, if you're going to build something truly enduring, it has to transcend the leader. They all go away. They all die. You can't have a system based on a single leader. And the second is you can go around in a big circle where you can say, hey, if that company was successful,

Starting point is 00:25:38 it must have been a great leader. And then if it's not successful, you say, they weren't a great leader after all, and you're just in a big circle. You're not learning. So I said to the research team, I don't want to study. I don't want to have a leadership answer. And my research team, which is usually composed of somewhat, I would say, highly irreverent, smart people who just work really hard, and they love to challenge me.

Starting point is 00:26:03 And we had these what we call kind of research symposiums because curious George was our, is our kind of our mascot, right? Of curiosity. And we would have symposiums and, and, and so we would, we would, we would be talking about the research. And one day the research team kind of essentially joined hands when I came in and they, and I said, what's up? And they said, we're going to tell you today that you're wrong. I said, well, what about? And they said, well, about this anti-leadership bias that you have. Each of us, we're responsible for studying the good to great journey, the inflection of these companies that were average that made that leap. And we see that at that point of inflection, the leader played a huge role. And to ignore that is to ignore the evidence. You always tell us, Jim, pay attention to the evidence.

Starting point is 00:26:56 We invoke that here today, you're wrong. And I responded to the team by saying, well, let me ask you a question. Remember your high school algebra? They all, of course, did. And said, remember if you have the same variable in the numerator as the denominator, the variable goes away. And so, as a relevant differentiator. And so, I went to the whiteboard and I put a little line up there

Starting point is 00:27:21 for the numerator and the denominator. And I put good to great companies in the numerator and comparison companies in the denominator. Now, our research method, and this all gets to the conceptual vessel, but you kind of have to sort of know how we get there. So our research is always based on a method that I developed with a great mentor of mine. And one of the themes, by the way, I think that's going to come up in our conversation is what I see as the incredible role that who luck, right? The luck of the right people that intersect your life plays in the journey. And I had great who luck in a research mentor named Jerry Porras at Stanford when we were doing Built to Last

Starting point is 00:28:05 together. And Jerry pushed us to develop this method where he said, look, if you study successful companies or companies that achieve certain things, but you only study the successes, well, you're going to find they all have buildings. Well, does that mean having buildings will make you a successful company? And so he said, what we have to have is a comparison set. And we developed this historical method where you study the entire history of two evenly matched companies at the start of the journey that are in the same place, same time, same resources, same potential. And then one breaks out to a totally different level than the other and holds it long enough that you can have confidence in it. And the other that was a virtually identical twin at that time does not. And at the birth of

Starting point is 00:28:49 any industry, for example, you have an explosion of new entrants. So all the early semiconductor companies and in there, you're going to find a twin pair of companies that are virtually the same, but one of them becomes Intel and the other one doesn't, right? So why? And so he said, you always have to ask what's really different compared to what? It adds huge amounts to the work, just the magnitude of work you have to do to do the comparison, because it basically more than doubles everything you do. But that's how you see. And of course, you find all the comparisons also have buildings. So buildings can't be the answer. So I went to the whiteboard and I said, okay, so we have good, great companies, had these remarkable people that led them through the transition.

Starting point is 00:29:38 Well, let's look at the comparison companies. And started ticking through the list and found, oh, sure enough, the comparison companies had some remarkable leaders. And some of them were even really extraordinary leaders. I mean, Jack Eckerd, who had built Eckerd, and Stanley Galt at Rummerbait. I mean, these were really, really good leaders. And so I wrote leadership in the numerator. I wrote leadership in the denominator.

Starting point is 00:30:03 And I said, guess what? The variable drops out. we have it in both it doesn't really matter as a variable let's go back to work and do something useful and the team that's the wonderful thing about smart irreverent young people they sort of closed ranks

Starting point is 00:30:18 on me and they said we knew you would do that to us so we came prepared and this is when the team, this is the value of having a great research team, saw something that then led to this notion of what eventually became the level five idea and the conceptual vessel for it. So the team said, Jim, you're right. Both sets of companies, the good to greats and the comparisons, at the critical moment in time had leaders, and there's no evidence that the leaders were any less exceptional in terms of their pure leadership ability. But there's something different about the good to great leaders. They're cut from a different cloth.

Starting point is 00:31:02 It's not about their personality. Many of them were shy and reserved and soft-spoken, never drew attention to these leaders? It wasn't leadership because they were both leaders who did leadership. There was something different about the leaders. And so there was this signature of their humility and then their fierce will on behalf of something that's not about them. They were able to subsume their ego into the company. And that blend of humility and will is what stood out. And that was different from the comparisons. So that was interesting. So you kind of step back and you say, okay, now how do we capture that conceptually? And I went out onto my porch and I started thinking, okay, is this just an idea? They're

Starting point is 00:32:02 just humble leaders. No, that's not quite it. There's something about this duality. Is it a dialectic? Didn't seem to be quite right. And I started playing around with different things. And I had this flash that went through my mind of it's a hierarchy. And it's a pyramid of capabilities. And you kind of climb up this hierarchy.

Starting point is 00:32:30 It was sort of almost like a Maslow's hierarchy, except it was of leadership. And that there were levels to it. And I thought this is a hierarchy of levels. Level one would be individual capabilities. And so that would be at the base of the pyramid. And then you go from individual capabilities to level two, which is you get really good at playing well with others, right? Good team skills. And then level three, you would learn how to manage. And by the way, as an aside, never denigrate great management. Anybody who's had a poor manager knows how awful that is to work for one and how great it is to work for a great manager. And then above level three becomes level four.

Starting point is 00:33:04 And you go from managing to learning to lead. And then there was a higher level. And that higher level was the level five. And the level five, well, you could be a leader as a level four. To be a level five leader, you had to go to the next level of the hierarchy and add in this ambition for something's bigger than yourself with humility and with will. And that when you stand back and you looked at that, you could look at it and say the right way to convey this idea is as a hierarchy that you grow through as distinct from some other way. I had to kind of find the way of capturing. And then the critical thing is, it's not leading, it's are you a five or a four? And here's sort of the overall pyramid.

Starting point is 00:33:52 And just to illustrate, let me just invoke somebody who wrote their Princeton thesis on what became a level five journey. One of the great leaders that I've gotten to know is Wendy Kopp, the founder of Teach for America. Sure, Teach for America. Yep. She wrote her senior thesis on it, which is why I'm always curious. I mean, Jack Bogle wrote his senior thesis on mutual funds and ended up creating an amazing thing. Wendy Kopp wrote hers on what became Teach for America.

Starting point is 00:34:19 But if you look at Wendy Kopp, if you were to ask the question, where is she on that? Well, she went through all the levels. But she's not just a leader. She has that extra dimension where she's got that genuine personal humility and an absolutely ferocious resolve for the overall cause that is not about her. And if anybody that's met Wendy or seen her, you would never think this is about Wendy Kopp. You would never think, but if you ever doubted her resolve, right? There's that image of her sitting there trying to get her first funding for Teach for America, where her image is, I put glue stick on the bottom of my pants and I would not leave the chair until I got a $25,000

Starting point is 00:35:02 check. I mean, just sheer will and will for ultimately the kids and how the kids' lives could be changed and yet genuine humility. And so she went to the top of the hierarchy. And so when I stand back, I look at it and say, that's the right conceptual vessel for this journey of what we had seen. Now, other concepts. May I jump in for one second? Yes, sure, please. The question was genuine humility. How do you identify genuine humility?

Starting point is 00:35:34 What are the characteristics and how do you separate it from false humility or what someone presents as humility? I guess I'm wondering how you... How we imputed that from the research data. Correct. Yeah, yeah, it's a great question. So first of all, in all of our work,

Starting point is 00:35:55 we start, not surprisingly, with a question of curiosity. It always has to be something, I just am really curious enough to go through the years of suffering to get some insights. And then you translate that into the research method, the comparison method, the historical method, and so forth. And then you collect vast amounts of information. And the key is, you're not looking for anything in particular. You're looking for patterns of difference. Why did one set of companies, what was different about them versus the others as you walk through time? And or what kinds of decisions they made and so

Starting point is 00:36:38 forth, always going to that difference question. And so what we began to notice is that the good to great leaders was fascinating that, number one, you can do what's called event analysis. So you can do something like, say, let's call an event the number of times in speeches you use the vertical pronoun versus you don't over the course of a career. And that's something you can count, right? So you can look at it and say, let's take the good to great CEOs and let's take the comparison CEOs and look at every letter they wrote

Starting point is 00:37:15 that you can get hold of. Let's look at every speech they ever gave, every interview they ever gave, right? I mean, you got mountains and mountains of information. Now let's go through and literally count how many times they tend to take credit themselves, how many times they give the credit to others, how many times they don't use the vertical pronoun I, how many times they do. Now later, of course, if somebody had read level five, they could try to pretend to be level five. I'll never forget an email when somebody

Starting point is 00:37:49 sent me an email that says, help. And I open it up and says, dear Jim, our CEO just walked in and announced he's level five. What do we do? Have them reread the chapter. But these were people that were just doing what they were doing. They weren't trying to show themselves one way or another. That's the thing of looking over a course in an entire history or career. You can count things. How many times did they allow themselves to be on the cover of a magazine? How many times when they're in discussions about things that did not go well, you can look at window and mirror events, reason it didn't go well, the factors outside yourself, right?

Starting point is 00:38:46 The economy or somebody lets you down or a partner didn't come through or whatever it happens to be, but somehow it's not you. Or there's the window approach, which is your kind of natural tendency is all that might be true. It doesn't change the fact that I'm responsible and I'm on this, and this is the mistake I made, and so on and so forth. And you can look, and again, it's comparative. What did the comparison CEOs do? You can count a lot of events of some version of pointing out the window. What did the good to great CEOs do?

Starting point is 00:39:18 You can count a lot of versions of pointing in the mirror. And so you begin to add all this up, right? And over the course of decades, because we look sometimes over 50, 60 years, and some CEOs were in harness for multiple decades, and since they're all publicly traded companies, people often ask, well, why do you only study publicly traded companies? My answer is because that's where the data is, right? It's not because, right? Because that's the beauty. They all have to report the same way. They all have annual reports.

Starting point is 00:39:48 They all have earnings calls. They all have all these things over time that you can then use as data sets. I'm not really a business author. I just happen to have used companies as the method to study human systems because there's great data. And so that's where the data is. And if you do that, and we have 6,000 years of combined corporate history in the research database, pretty soon you can start counting a lot of things. And then you can begin to say, there's a substantial amount

Starting point is 00:40:16 of quantitative evidence that adds up to a greater level of humility in these than those. And that's how you get there. May I ask you a question about counting? Yeah. All right. So we have a number of books we could talk about, and we are going to talk about some of them, but Built to Last has a subtitle, Successful Habits of Visionary Companies. I'm very fascinated by what might be the successful habits of Jim Collins. And this is a question about counting.

Starting point is 00:40:58 In the course of doing some of the homework for this conversation, I have come across different ways that you seem to measure your time and your days. And I'd love to explore that for just a little bit. Sure. So the first was I read that you had, and this may have evolved or changed by this point, but a stopwatch with three timers in your pocket. Can you,

Starting point is 00:41:13 and that it was sort of indicative of creative teaching and other. Yes. But could you explain that habit, please, for people

Starting point is 00:41:22 who are not familiar? Well, so actually, let me tell you the story of how it began, what the three were about, and then how it's evolved into something a little simpler and a little more powerful in what I do with it every single day. Perfect. So I don't want to pretend that I'm normal, okay? So what I want to describe is not normal behavior, but this is it. So when I was 36 years old,

Starting point is 00:41:46 I made the decision, and we can come back to this later if you want to talk about big bets and doing scary things, such as betting our career, betting our lives, Joanne and I, on an entrepreneurial path.

Starting point is 00:41:58 Let me just kind of step back and sort of share the origins of this. So I was teaching at Stanford, and it was a marvelous journey. And of course, I had great mentors and learned how to do my research there. That's where Jerry and I did Built to Last. But I had another mentor who encouraged me to think about whether I wanted to do a self-directed path or not. I used to say to my students, because I taught entrepreneurship and small business, I always said to my students, why don't you go do something on your own? I mean,

Starting point is 00:42:29 why give over all your creative energies for somebody else's thing? I would at least challenge them to think about that. And I would say, if you're really interested in business, you don't have to go to work for IBM to be in business. You can do your own. So my students, this is the wonderful thing about great students, they hold you to account, right? They said, well, what are you doing that's entrepreneurial? This doesn't look like a very entrepreneurial thing, teaching these classes and being here. And so I started thinking about it, and I realized something about myself, which is I like betting on myself. So I had this idea.

Starting point is 00:43:06 You don't have to be at IBM to be in business. Why do I have to be at a university to be a professor? So I said to Joanne, I said, you know, I think I have this idea. I'd like to be a self-employed professor to endow my own chair and to grant myself tenure. So Joanne, who we've done these things together through life, she went along with this idea. And the idea was to try to pursue really big questions that wouldn't be constrained by things you can do in only a year.

Starting point is 00:43:37 And the first big bet on that was the research in Bill Tillasson. It was coming out. And I said, let's just bet everything. Let's go. And so we launched this huge bet, bet everything on that book. Didn't know if it would work. We were down to less than $10,000.

Starting point is 00:43:52 We were actually really scared. We call it our Thelma and Louise moment. We were like launching off the cliff together except we wanted to get to the other side. But it was a huge bet and we didn't know if it would work. But I was very clear about one thing. I did not want to have a half-life of quality in the work. And it's one of the wonderful things about working on Built to Last with Jerry back at Stanford.

Starting point is 00:44:20 No one knew who I was. No one called. No one paid any attention. So for six years of working on that research project, I could just go into the cave and work and work and work. And that kind of deep work, I mean, you have to go deep into the data, deep into the research, deep into the thinking, the long cycles of reflection. That's how you get the ideas, and that's how you do good stuff. success, that I might wake up in five or six or seven years and have not gone back to the wellspring of the deep, quiet solitude of work. And then your second book is half as good, right? And then the next book after that is only half as good again. I wanted the quality to always get better. And so I thought, well, you know, what's interesting is a professor, a university is a place that really encourages that because it's sort of designed to allow you to spend your life in that tranquility.

Starting point is 00:45:36 And so I went to some faculty members who I greatly respect. And I said, how do the people in the academy that you most respect in yourself spend their time? And I got a consistent answer. 50-30-20. 50% of your time in new intellectual creative work.

Starting point is 00:45:59 30% of your time in teaching. And 20% of your time in other stuff that just has to get done, serving on committees, whatever it happens to be that you have to do. And so I thought, that sounds good. I'm just going to start doing that. So I started, as I was heading out on the Thelma and Louise leap, counting my hours every day. And I would count how many hours in the day were creative, new,

Starting point is 00:46:26 intellectual. And the goal was that had to be above 50%. Then how many hours would be in teaching and how many hours would be in other stuff. I mean, somebody got to balance the QuickBooks, right? And so I started counting and that's where the triple stopwatch came. I found this wonderful triple stopwatch where I could constantly go back and forth, and at the end of the day, I would have the total. Later, I came to the realization that what really mattered was the first bucket, the creative work. And so I eventually simplified it. There's a concept in Great By Choice called the 20-mile march. And so I kind of had a 20-mile march. I just didn't know that concept yet. And the idea being something you just do really consistently over time that imposes

Starting point is 00:47:17 a very high level of discipline that accumulates to results. And so I simplified it and I just simply said, can I just simply count the number of creative hours I get every day and then hold myself to an account? So at the end of every single day, I open a spreadsheet and that spreadsheet has three cells on a line and that's for the day. The first thing is just a simple accounting of what happened that day. You know, where did my time go? What did I do? What, et cetera. Can you give, sorry to interrupt, but I would love, this is the stuff I love. Um, the, what, what might a description for the day look like? Is it three sentences, four sentences? What, what might it look like? It sort of depends on, I mean, actually the very best days

Starting point is 00:48:08 don't have much in it at all. They are got up early, two hours of really great creative work, breakfast with Joanne, five hours creative work, workout, nap, three hours of creative work, enjoy dinner with Joanne, bed. I mean, that's like a great day. But other days are full of lots of other choppy things. And so what I tend to do is to try to capture a bit of what happened with sleep, what happened with the main tasks of the day. If there were some really interesting conversations that happened or something that hit in those, I'll note those. They're markers so that I can always go back, and I'll show you how I use those in a minute because I actually do these correlations with

Starting point is 00:48:56 all of that. And then the second cell is the number of creative hours I got that day. Now, there's no rule about how many you get in a day. Sometimes they're zero, and sometimes they can be nine or 10, which would be a huge number. But then it calculates back over the last 365 days. And the march, which I don't think I've missed for well over 30 years, and I hope to hit for a lot longer now, is every single 365-day cycle, every single one, every single day, if you calculate back the last 365 days, the total number of creative hours must exceed 1,000. No matter what. It doesn't matter if you're sick. It doesn't matter if there's other stuff you'd like. 1,000 creative hours a year as a minimum baseline. Now,

Starting point is 00:49:56 it can be above that. That's fine, but never once. There can't be a single day in any 365-day cycle, January 2 to January 2, July 22 to July 22, September 9 to September 9, doesn't matter. Always has to be above a thousand creative hours. And you watch it, and I put on the whiteboard here at the lab, the three-month pace, so you take the last three months multiplied times four, the six-month pace, and then the current 365. And that is a way to kind of monitor. If I start seeing that those numbers start to go down, I'll change my behavior. And sometimes I have a big buffer, and sometimes I don't.

Starting point is 00:50:46 And the idea is if you stay with that, eventually you're going to have work. Now, there's a third cell that I put in there that most people don't know as much about because people know about the hours thing somewhat. But all of us have dark times, difficult times. All of us have good times, right? But here's an interesting thing I noticed, which is that if you're kind of going through a funk, it colors your whole life. And you tend to think your whole life is a funk because you're looking through that lens. And so I thought, well, you know, but actually I feel like my life is really pretty good. But when you're in that other place, it's not, it doesn't feel that way, right? And so what I started to do is I started creating a code, which is plus two, plus one, zero, minus one, minus two. And the other thing I put in, and the key on all this, by the way, is you have to do it every day in real time.

Starting point is 00:51:35 You can't, like, five days later look back and say, how did I feel that day? And what this is is a totally subjective how quality was the day. What was it? A plus two was a super positive day. This is emotionally speaking. Exactly. Just like, was it a great day? A plus two is just a great day.

Starting point is 00:51:55 It doesn't mean it wasn't, that it might not have been a really difficult day. It might have been a day of a really hard rock climb. It might have been a day of really hard writing, but it felt really good, right? It might have been a day of an intense conversation, but really meaningful with a friend or something, right? But it adds up to as a plus two. Plus one is another positive day. Zero is, eh, you know. Minus one's kind of a tone negative. And minus two is, those are bad days, right? And you put it in before you go to bed. Because if you try to remember,

Starting point is 00:52:28 if I were to ask you, Tim, right now, 17 days ago or even five days ago to give the score, you're going to be distorted by how you're feeling today. Oh, for sure. I mean, yeah, I mean, memory. If you ask people what they ate two days ago,

Starting point is 00:52:40 they're going to be off by 40%, 50% calories for sure. Exactly. So I write it down and now I start to have, I got the creative hours March, They're going to be off by 40%, 50% calories for sure. Exactly. So I write it down, and now I start to have – I've got the Creative Hours March, which is kind of discipline in service of creativity. And it's relentless, right? It just stays with me constantly. You never get a break from it. You can take breaks, but you can never get a break from the thousandth floor. But that other has proved to be incredibly useful for me. Because now what you can do is sort the spreadsheet. And you can say, over the last five years,

Starting point is 00:53:11 what's going on in all the past two days? Oh, and over the last five years... That's where the descriptions come in. Yeah, exactly. And over the last five years, what's going on in the minus two days? And now as I navigate, it's kind of like the simplex method in operations research, where you find optimal by never really knowing that optimal is ahead of time. You do it by a series of iterative steps of the next best step. Hold on. Can you explain that? I'm from Long Island, so sometimes it takes me a minute. Can you explain what that was one more time? Yeah, sure.

Starting point is 00:53:46 So my undergraduate was a thing called mathematical sciences with a heavy dose of philosophy. And math sciences was pure mathematics, computer science, statistics, and operations research. And in operations research, there's a method developed by a guy named George Danzig called the simplex method. And essentially, the idea is that if you're really trying to find the optimal answer to a multivariate problem where there's lots and lots of variables, even the biggest computers couldn't basically do a giant spreadsheet and sort. There's just too many permutations. And what he showed was under certain conditions, all you have to do is find the local optimum, like what's the best next step. And then you reset, and then what's the next best step. And that he showed that under certain conditions, that is mathematically guaranteed to navigate you

Starting point is 00:54:40 to the optimal endpoint. And that was the simplex method. As I understand them, it was 30, 40 years ago when I was in the class. So I've always had that idea in mind. So you kind of navigate step by step. And so I think about it as in navigating life, I want more of the things that create the plus twos and less of the things that create the minus twos. But the difference that's helped me is I know what they are. And I can start, you know, it's not that life is never perfect, but you can do a simple more of this, less of that. Then more of this, less of that. Does that make any sense?

Starting point is 00:55:18 It makes perfect sense. What are some of the patterns that you've found for either the do more column or the do less column for yourself? Yeah. So when I look at those patterns, I would say on the plus twos, there are almost two contradictory components. And not contradictory, but they're just really different flavors. One is the solitude of really hard work. And sometimes one of my favorite days will be I get up, I never leave the house, and I basically get to just lose myself in the research or in the writing or in the making sense of things. It's a very incredible simplicity of the day.

Starting point is 00:56:14 I'm 61 now, and I think about what comes next, and I intend to keep creating. I want to stay in some version of that march for a really long time. My role models have all done that. But I think about life as having three things, at least, I think are really important. One of them is increasing simplicity, just sheer simplicity. Two is time and flow state. And flow state's not easy and the third is time with people i love and uh and and so when i look at the um at those plus twos they have a lot a lot of the days would be days of high simplicity not much happened there were very few moving parts but a lot of deep hard work and flow state i might have been writing or doing a concept or

Starting point is 00:57:06 or creating something or i mean just you're lost in the work or rock climbing probably or rock climbing exactly exactly it's arduous but you're lost in it those are great the other though for me is the time with people i love and the other dimension while I wouldn't describe myself as a highly social type person, I love the solitude of the hard work. The other side is there are the people in my life and there are many. I have great friends, really great, great friends that many decade friends, friends back to third grade, seventh grade, all my college roommates. I mean, my personal band of brothers. I mean, I have friends. And my wife, we've been married 38 years, got engaged four days after our first date. What? Four days after your first date? Yes, that's true. Wow. Okay. We might come back to

Starting point is 00:58:00 that. We might. But the thing is, when you have those days where you're really present and engaged with people you really love, those are plus two days. You may not have accomplished anything, or in the case of climbing, it might be that I went out climbing with one of my best friends, and I don't even necessarily remember the climb. It was with a friend. And so my plus two days are either very solitude or very connected, but connected to people that have these long enduring, really, really wonderful relationships in life. And those make plus twos. I love it. You at some point in life need to meet my friend Josh Waitzkin, who you and he have very similar heuristics. He was the basis for the book and the movie Searching for Bobby Fischer. So his first life was in chess, but I won't take us too far off track. But at some point, I think you guys would really really get along uh okay let me dive into a couple of clarifying questions if i may because this is this is this is so juicy i can't i can't i don't want to just move on to the next thing we're gonna have all these people now creating spreadsheets i was gonna say if this writing thing doesn't work out for you you should create

Starting point is 00:59:22 you have you have a spreadsheet company, you have a journaling company available to you. Creative. So this is a word that means different things to different people. What are the main activities or what are some of the activities that are squarely in the creative bucket for you? And the reason I'm asking is I'm thinking of how I spend my own time. And you have a team, I suspect a much smaller team. But for instance, if you are working on a book that requires interviews, would spending time scheduling those interviews count as creative? Or is there a cutoff, even if it's in service of a larger creative project where you have admin and then you have creative. So for you, what counts towards the hours marked creative? So you've hit upon exactly where the gray zone

Starting point is 01:00:14 is on this. And in general, in order to, again, I have to go back to what's the overall objective. The overall objective is that over time, there's quality work. And so I can't start calling things creative, that in the end, wouldn't lead to some kind of creative output. And by the way, sometimes that creative output ends up in a drawer, because it just doesn't make it to the world. But you have to just keep working. And I think of it as like being an artist in a studio. And so, well, are getting the paintbrushes ready to paint part of the creative? I would say yes. I would say that organizing the tools and maybe even ordering paint, because it's in direct service to the creation of what ultimately might be in a canvas, whether the world sees it or not. I define creative as any activity that has a reasonably direct link to the creation of something that is new and potentially replicable

Starting point is 01:01:19 or durable. Oh, I like that. Yeah, please expand on that. So, for example, if we have in this conversation, right, I mean, there's already elements that will count as somewhat creative, because just even you start thinking about if an idea pops into my head, and then that leads to supporting some other, you know, concept or piece of work that I'm working on. Because a lot of times, I'm sure you find this too, is there's a seed of an insight that's lurking in the back of your brain. And then in the process of conversation or in the process of trying to articulate something or in some other mechanism, it gets jarred out of your brain. And then all of a sudden, you see it bounce on the table. And then you go, oh, I need to put that in a bag and not forget it. Right. And, and, and, right. And so, and sometimes that happens, I'll give you an example of how something

Starting point is 01:02:13 that, that, that can, uh, turns out to be a kind of a creative moment. I wasn't anticipating as a creative moment. I was meeting with a, I can't say who it is, but it was a very towering, super charismatic, super genius founder who is sort of to his world the way, say, Walt Disney might have been to his world. I mean, just truly a once in a generation. But unlike Disney, this person never really started thinking about the systems that would allow him to build a company that could really ultimately go beyond him. And there were challenges with that. And so we were talking, I was trying to figure out, how do I get through to this? And there are other people on the team who didn't really want to step up into certain roles and a whole bunch of other stuff.

Starting point is 01:03:07 And so you can kind of picture that as I'm challenging them, trying to teach them, set the stage for making a built-to-last company. And so you can view that as, well, what's creative in that? You're just kind of wrestling with these people. And all of a sudden, in the middle of the conversation, I remember I just turned and I looked at him. I said, here's the problem. I remember I just turned and I looked at him. I said, here's the problem. You, sir, are a genius. So let's just start there as the problem.

Starting point is 01:03:34 You are a genius. And what you have is a thousand helpers. Now, so long as you're still a genius, and so long as all these helpers want to help you, being a genius with a thousand helpers, that's going to work really well until either A, someday you're not a genius, or B, you're gone, in which case this company just hollows out. There's nothing left. There is no company.

Starting point is 01:04:01 All this is is a genius with a thousand helpers in a sort of a vessel called a company. It's nothing more. Well, right then, that was when this thing came out of my head, bounced on the table. I had never used that phrase before. And I immediately, I made a note on my notepad, and I went back, and if you look at Good to Great, there's a section when I'm trying to describe the comparison CEOs in contrast to the Good-to-great CEOs where I talk about the genius with a thousand helpers. And I contrast how the level five leaders come at it as that's the last thing they'd want to be and how they'd want to build a culture and a company and ultimately be the architect of a great system versus being the genius with a thousand helpers and there's a flow chart in there that sort of describes the difference that came out of that conversation so i got to count that conversation as creative even though when i

Starting point is 01:04:55 went into it i didn't know that that would happen so i wouldn't have counted it normally there's other times where sure i was doing some research on K-12 education recently, and the process of really deciding who I wanted to interview, that would count. That's like assembling the paintbrushes. If I'm balancing the QuickBooks account because I have to do that, or I'm, I don't know, there are things that just sort of clearly fall outside of it. And I don't count it. I try to be a hard counter so that I stay on the march. This is super helpful. And it also made me think about how if someone were to, and I was thinking about this earlier as well, how the 50% creative, 30% teaching, 20% other, in some respects have a – well, we will get to this.

Starting point is 01:05:55 Maybe it's not. Go ahead. I wasn't going to say maybe it's not a flywheel exactly, but the creativity can lead into teaching. The teaching then can lead back into the creativity because it forces you in some respects, or at least catalyzes you to express things in ways that you might not otherwise. And also points out things that are unclearly formed if you then try to convey them to somebody else. And in fact, it's interesting in preparing for today, and I love to prepare for a conversation by thinking through what we

Starting point is 01:06:35 might chat about, but then it's not a script. It's like having different plays you can have in a football game, like what might happen in the game, and then that's a conversation. Even if I get together with a really good friend, I usually will write down three things I'd love to chat about today. We may or may not get to them. But one of the things I did for today was I thought, I wonder if Tim will ask me, what's my own flywheel? And so I actually took a cut at writing it down. If we come back to that

Starting point is 01:07:01 later, I'd be happy to. Yeah, we will absolutely come back to that. And I have a path there. So you mentioned a while back, actually, before I just have to check this box or it's going to bug me. Sleep tracking. So you mentioned sleep. How do you note or modify or have you modified your sleep? Can you talk to us about, I think most people would agree it's important, but how have you monitored and modified your sleep? Well, again, I'm not normal, okay? That's precisely why I'm asking you these questions. No, but one of the things that struck me a number of years ago is that we spend so much time thinking about time management. And I'm not really, even though I described this counting and stuff, I'm not really a time

Starting point is 01:08:01 management sort of person. I'm a, like, I don't have kind of – I have to organize my time a certain way or whatever. That thousand creative hours, as long as I stay there, there's millions of ways I can get there. So it's like a constraint within which now I can have a ton of freedom. So I'm not overly regimented. I'm just disciplined, and there's a big difference. And so when I was thinking, well, wait a minute. If a third of our lives approximately are spent related to sleep, why don't we put as much thought into time management of sleep as we do into the rest of our day? I mean, it's just ignoring a huge piece of it. So one of the things I did was without, to my knowledge, having a sleep issue, I and my insurance wouldn't pay for this or anything.

Starting point is 01:08:52 I just was curious. There's a sleep center at I think it's the National Jewish Hospital here in Denver. They have a sleep lab where they'll do sleep tests and stuff. And I just said, hey, can I come and get sleep tested? And so I went down there and just scheduled myself in and spent the night and had them put the electrodes on. And I kind of feel like I'm my own rat in life, my own lab rat. Well, I'm always studying myself somehow, right? And I used to have a little book called The Bug Book where I'm the bug and I'm studying the bug called Jim. That's how I figured out where I was

Starting point is 01:09:23 going to go in life. And so anyway, so I went down to the sleep lab and I said, I'm going to study, to study sleep is too strong of a word. I'm going to be a student of the science of sleep. And so, because it's a third of my life, why don't I understand it? So I got the sleep test and I found out I didn't have any serious sleep pathologies. I learned about the different aspects of sleep. And the big takeaway I got about sleep was we tend to think of this idea of seven hours a day or eight hours a day. And what I learned from this little journey, and again, I want to underscore, it's not like I'm a sleep expert or anything, or I'm just trying to

Starting point is 01:10:03 figure it out for myself, is it's actually the number of hours that you get over, say, a 10-day cycle. So if you go up and you do a big climb, like when Tommy and I did our climb on El Cap together and do it in a day, that means 24 hours. You're going to be awake for 36 hours. So if you're basically like, oh, I couldn't do it without sleep, well, you're never going to do it. You can perform at really high levels with zero sleep over a day. You wouldn't want to do it over 10 days, though. And so what I started thinking was what really matters is the amount of quality sleep I get over, say, a 10-day cycle. So early on, after all this, I actually started counting, and I would count naps, and I would count to just try to keep, again, very much like the 20-mile march of the creative hours, as long as I was staying above 70 over a 10-day cycle.

Starting point is 01:10:49 However I got there, that was fine. I've since found that what really – I probably still hit that number, but having counted it for about a decade meant that I ingrained the patterns of how to come at it. And what I've learned is, I guess, two or three things specifically about the sleep process for me. This is just personal. One, the 20-minute rule. If you wake up in the middle of the night and you check the time, first of all, it's also, by the way, fun to see if you can guess what time it is, right? But then check the time. And then if you're not back to sleep in 20 minutes, get up and go. And then I love, you know, sometimes go lose myself.

Starting point is 01:11:39 And again, back to the simple work, whatever. There's something really quiet to get up at three or four in the morning. And you're just there with the creative stuff you're doing. that's a great time. Sometimes you wake up at three, sometimes you wake up at seven. The second is, for me, I'm really, really lucky. I have the genetic ability to nap in any situation. I took a nap. I woke up eight minutes before our conversation today. I'm serious. I know a nap. I woke up eight minutes before our conversation today. I'm serious. Yeah, I know you are. And so for me, my little secret extra capability that I just was born with was I can nap pretty much anywhere under any conditions. And I can dream.

Starting point is 01:12:23 You give me 12 minutes, I'll dream. If you give me 55 minutes, I'll dream. And I can wake up and boom, be fine. It's just genetic. But naps are my sort of saving. They give me this sense of like, ah, whatever happens, I'll be fine because I can always close my eyes. I can nap sitting up. When do you choose to nap? Well, I have two favorite times of napping, three favorite times of napping. One is airplanes are great for napping. So I never eat anything on a plane or do any of that. I'm either trying to do something creative or sleep. I really have a sleeping kit, which includes Bose noise-canceling headphones and eye covers and a donut pillow that the headphone can go in.

Starting point is 01:13:10 So it's actually like really kind of creating a micro-environment so you can sleep on an airplane or wherever you happen to be. The second place, if I'm not traveling, which I try not to do too much anymore, afternoons are great for a nap because you have a really good morning and then you get that wonderful afternoon glow of creative time. Sometimes if you took a nap from, say, 2 to 3 or 3 to 4, and then you have that marvelous 4 to 7 in the evening, and it somehow coincides with the end of the day, that can be, it's like a second morning. And my, but my favorite absolute sleeping pattern is, so when Joanne's doing one of her bike rides across the country and she's gone for six or seven weeks doing it, I'll fall into a pattern where on a lot of days I'll go to bed at 11 and get up at three. I'll roll out of bed and then I'll do the creative work stuff, usually creative work preparing teaching from say 3 till 7 you don't eat anything, you don't drink anything, you don't have a cup of coffee you just go roll right in and then you go back to

Starting point is 01:14:16 sleep from 7 or 8 until 10 or 11 and if you've ever been under general anesthetic that second sleep is like general anesthetic. I mean, you blink and it's just that deep, dark bang and all of a sudden three hours are gone. And then I get a second morning because mornings are the best. I get a second morning when I get up and then you have breakfast and then you get this really great energetic day. That, for me, is a perfect sleep day. Wow. I have these things I'm dying to get to, but then you keep bringing up interesting things, which I…

Starting point is 01:14:54 Well, go ahead. No, no, I squarely blame you for that, but I'm glad you're doing it. The bug book. Yes. You mentioned it in passing. What is the bug book? Could you please elaborate on the bug book? we struggle in our 20s to get clarity about how to deploy ourselves in the world. And because everything up until you kind of finish high school or college or graduate school or whatever, it's kind of structured.

Starting point is 01:15:34 You don't really have to think about it. It's like, oh, I got to figure out how to do these math problems or whatever. But life isn't really like that. And then all of a sudden you hit life, and life is much more ambiguous. And so you're trying to navigate through it. So I, like a lot of people, was trying to figure out how best to deploy myself in my 20s. I had multiple things that helped me do that. But one of them, let me just introduce a concept, okay? And then I'll tie it into the bug book because this is how I challenge young people to think about it.

Starting point is 01:16:08 There's a concept in Good to Great called the hedgehog concept. And the idea of the hedgehog concept is to sort of simplify down. We found it by studying companies. We found that when they really focus on one or a few really big things and made very disciplined decisions over time, those would accumulate and begin to build some real results and eventually what would become the flywheel effect, which we'll chat about a little bit later. And the hedgehog concept is the intersection of three circles.

Starting point is 01:16:37 For a company, it's doing what you're deeply passionate about because if you're not passionate about it, you can't endure long enough to really, really do something exceptional. Two, the second circle is what you can be the best in the world at. And if you can't be the best in the world at it, leave it to others. So for example, it doesn't mean being big, right? You could have a truly great local restaurant. It's never going to be big, but it's the absolute best in the world at a particular thing that it does in its specific community, right? And no large company could come in and be better than them at that, right? That's very hedgehog, even though it's not big. And then the third is that you have an economic engine and you

Starting point is 01:17:23 know how it works. And so if you have the intersection of those three, our energy is going to go into things that we're passionate about and we can be the best in the world at and drive our economic engine. You're in your hedgehog. Now, there's a personal analogy to the hedgehog. And this gets back to the bug book. I am not a big believer in sort of thinking of traditional careers. I'm a big believer in thinking of finding your hedgehog and then really building flywheel momentum with that over time. And so as the personal version of the hedgehog is, again, doing circle one, what you're passionate about and love to do, the kinds of stuff that when you do it, you say, I sure hope I get a long life because I really love doing this. The second

Starting point is 01:18:10 circle isn't best in the world because if you said, well, if I can't be the best orthopedic surgeon, I won't do it. Well, then we'd only have one, right? That's not good, right? So, it's what you are encoded for. And what you are encoded for is different than what you're good at. So when I went to college, I thought I was going to be a mathematician because I was one of those kids that was good at math. And that's why I majored in math sciences. But then I met at Stanford the people who are genetically encoded for math. They were not me. I was good at math. They were encoded for math. It's like being an athlete where you thought you were a good athlete until you met the incredible, natural, gifted athlete and you realize, I could never see to spin to the basket like he did.

Starting point is 01:19:08 Or I could never see to put the ball there running down the field playing soccer the way she did. I just wouldn't have seen it. It was a gift. That's the encoding. And so you have to find what you're encoded for as distinct from just what you're good at. And then the third is you have an economic

Starting point is 01:19:26 engine. And you can fund your goals, your objectives, the things you're trying to get done. When you have all three of those, I'm passionate about it, I'm encoded for it, and I have an economic engine in it, now you're in your hedgehog. Now, when you're in your 20s, there's all these sort of paint-by-numbers kits approach to life, right? You can be a professor. You can be a businessman. You can be a lawyer. You can be whatever, right? And the nice thing about a paint-by-numbers kit is you actually don't have to think about it that much

Starting point is 01:19:54 because as long as you stay in the lines and you paint, you're going to end up with a nice picture at the end. But the only way to paint a masterpiece is to start with a blank canvas. And that is sort of figuring out those three circles and then making your own unique series of decisions consistent with the hedgehog of those three circles. And they may or may not fall into a traditional bucket. And I started this little book, and it was inspired by a mentor named Rochelle Myers, who suggested that what I do is I study myself like a bug. And imagine with this passionate objectivity as you're going through life, you're making notes where you're observing the bug called Jim. But very scientifically, clinically. And so I remember I was working at HP for a couple of years at a graduate school. Great company at the time, for sure, but I wasn't really constructed to be in a large company. But I was trying to navigate my way. And one day I had to give a presentation on how network computers work. And this was back in

Starting point is 01:21:07 the 1980s when it was early on in that. And I had to figure out how to communicate to everyone really the essence in our team of how network computing was going to work and how it fit together. And I had to sort of conceptualize it and then I had to teach it. And sure enough, all of a sudden I had this day where it's like, wow, that was really fun to figure it out, to figure out how to conceptualize it, to figure out how to put it in concepts everybody can understand, to share it with everyone, to teach it. My bug book, when I'm then writing The Bug Gym, really loves making sense of something difficult, breaking it down into understandable pieces, and teaching it to others. It was an observation in the journal. The other thing is, might be something like, the bug Jim would really languish if he had to spend a lot of time in senseless meetings. This is not good, right? And so I would end up constantly observing.

Starting point is 01:22:07 And then eventually that allowed me to, it was that sort of observation, clinical, that allowed me to eventually sort of head back to teaching at Stanford when I was 30, which then became really the start of the real journey of what happened. With the bug book, did you write things in the bug book each evening? Did you do it, keep it in your back pocket? And when there was an outlying, impactful, or emotionally notable event, you would write in it? What was the structure to how you used it, if there was any? At that time, and I'm more now just kind of in the coding we described earlier, because I'm one of those really lucky people that I found this stuff early. And I remember the moment I hit the classroom at Stanford, first teaching the small business and entrepreneurship

Starting point is 01:23:02 class, I just knew I'm home. I'm in the three circles. This is, I know, what's going to guide in some version, some permutation of this probably for the rest of my life. And I just knew it. But until then, I had to kind of get to where I could see that. And so for those years, I would say, if I've been, if I went back and looked at them, I haven't done that, they're in my basement, I'll bet you that probably five out of seven days, there's reasonably thorough entries in there. And those entries would also be things like noting, sort of projecting out. was often what I would describe as pattern recognition where you'd be noting things but I would also always be scanning for people that I could see them older people much older than me and I could and the question is I could somehow picture that some version of what they do

Starting point is 01:23:59 somehow resonated and I would note that What was it about it that resonated? Why did I look up to that person? I'd spent a lot of it not just on my own experiences, but also very much on people that I admired. Not people from afar, people I knew and observed. Not for their achievements, but something about the quality of what they were. And that was also a big part of that observation process. Okay, this is the perfect layup segue. So thank you for what you just said. To a follow on to you mentioning that you're 61 years old. Yep.

Starting point is 01:24:37 And I read in a piece in the Irish Times, you can feel free to fact check this, but you you're quoted as saying, you know, the big years are 60 to 90 to me. I want to dwarf what happened before this with what comes next. And in between, that quote was broken up into two pieces. It says, he adds, pointing out that when he first met Peter Drucker, then aged 86, the Vienna-born sage still had 10 books left in him. So, McPhee is to you, in a way, wanting to know what it was like to study under him. Peter Drucker is to me. So, I have a copy of The Effective Executive. I've read it more times than I can count.

Starting point is 01:25:17 I'm fascinated by this man, but I've never actually spoken to anyone who has spent any time with him. Would you mind just explaining who he is for people who don't know, and then just talking about your history with Drucker? Well, first of all, in the effective executive, I was very honored to have the opportunity to write the foreword to the 50th anniversary edition. Oh, no kidding. Yep, yep. And you might want to look it up because I stood back and I said,

Starting point is 01:25:51 I essentially said, I'm going to distill, you know, 10 things I learned from Peter Drucker in that forward, some of which tie into the effective executive, but some were sort of broader than that. And it was very interesting to sit down and sort of think about some of those things I learned from Peter. So I'll just sort of intersect a little bit with Peter. And Peter was, boy, so let's talk about who luck, okay, as an intro to that. I have been so who lucky. And it didn't start that way because I didn't really have a great relationship with my dad and he died young. And so I kind of decided

Starting point is 01:26:40 I would sort of create my own father by reading biographies and people that I would really look up to. And I formed a personal board of directors, came up with that idea in the 1980s and started putting people on it. And there were often people who I just admired for their character, right, more than their accomplishments. And I would let them kind of shape me. And I hope a little bit later we might have a chance to talk about one really amazing person in that, a fellow named Bill Lazier, one of my mentors I learned from. But Peter was a person who I just, if somebody said to me, well, somebody did say to me. So a fellow named Tom Brown from Industry Week magazine way, way back when, I don't even think we'd published Built to Last yet, did an interview with me and Jerry at Stanford,

Starting point is 01:27:27 and he said, well, who's most of a role model for you that you would most look up to? And I said, Peter Drucker. He said, why? And I said, well, because he really asked big questions. And so Tom, unbeknownst to me, I had previously interviewed Peter for something, and he calls up Peter and he says, there's this guy, maybe he's going to take his own path. He really admires you.

Starting point is 01:27:54 He's 35 years old. He's up there teaching at Stanford. Would you be willing to spend some time with him? So out of the blue, I get this voicemail. Okay. I get this voicemail, and I hesitate to try to mimic the Austrian accent because it just sounds terrible. But it's something along the lines of, this is Peter Drucker. Right.

Starting point is 01:28:21 It's coming through my voicemail. And he says, would you please give me a call? I would love for you to meet with me. Okay. So he's almost exactly 50 years older than me at this point. I'm heading to 36. He's heading to 86. And I call him back from the Seattle airport.

Starting point is 01:28:41 And I call him up and I said, Mr. Drucker, this is Jim Collins, and he yells into the phone, speak up, I'm not young anymore. So I'm yelling into the phone. And so we arranged this day, I think it was December 10, 1994, if I recall correctly. And I get on a plane and I go down to Claremont. And by the way, let me just pause here for something for anybody, you, anyone that's listening. If somebody is willing to give you mentor time like that, you owe it to them and to you to go prepared and then to do a lot of writing after. So I put an entire couple, three days into preparing for being able to meet with Peter. And then when I came home, I still probably have, I'm sure, my notes. I mean, I sat down and I just processed and wrote and wrote and wrote and wrote

Starting point is 01:29:45 everything I gleaned from that meeting. And there were others, you know, interactions later, but that meeting and that notion of you owe them the respect of going prepared. It's not like, hey, I want to hang out. Let's network. It's not like that, right? You need to go. And then you need to process and then you need to make good on it.

Starting point is 01:30:03 And I last year went, I had the great privilege of being able to spend a day with Jack Bogle. And that's an interesting story how that came about. But I spent like two weeks preparing and then probably three days codifying all my notes after of what you learn from this great man who only had, it turned out, one year left to live. And so if you get that, you need to do it because that's how you get the return on the huluk and it's also how you honor them. You're not taking their time. You have to make good on the time they spend with you. So I went down there and I knocked on the door. He lived in this modest house. You got a picture. It's this modest house in Claremont. And there's a little bit of paint needed on the door and a knock on the door and nothing happens. And then finally he sort of wants to be patient. He's kind of curmudgeonly

Starting point is 01:30:56 and the door flings open and there's Peter. And he grabs my hand and two of his. He says, I'm so very pleased to meet you. Please come inside. And we went and we sat. And I have this still, this image of myself of, you know, this is the model I still have in my mind of the next 30 years in many ways, is to pattern after that way he had some sense of grace, but also the simplicity.

Starting point is 01:31:27 He sat in a wicker chair. And a few years ago, when they turned his house into a museum, they had the first ever wicker chair lecture where you get to sit in Peter's wicker chair and give a lecture. And I got to give the inaugural wicker chair lecture. That's amazing.

Starting point is 01:31:45 And the chair felt really big, by the way. It was Peter's chair. And so, I was always asking, why do you want to do this work? Why do you want to pursue these questions? And I kept trying to ask him questions, but he kept asking me questions. And then finally we got to go to lunch. And I got a chance to start asking questions. And I asked him at that lunch which of his 26 books he was most proud of. The next one. He did write 10 more. He was 86. And years later, when I, again, a great privilege, had the chance to keynote the Drucker Centennial. He died at 92.

Starting point is 01:32:34 And Claremont asked me to come and give a keynote talk at his inaugural. I mean, at his centennial of his birth. He was born in 1909. And it's actually, I think this is on YouTube. They put it up on YouTube. I went, I said, I want to go see the shelf. And the shelf was all of Peter's books put out chronologically based on when he wrote them, first editions. And I said, where on the shelf was he age 65?

Starting point is 01:33:09 And the answer was, when you pointed to it, one third of the way across the shelf. Oh my God, that's amazing. Isn't it? And after that, they were so kind, they sent me a photograph of the shelf, which is kind of long version photograph. It kind of goes all the way across. I have it above my writing desk. And I look at it and I picture a little note that, you know, I'm not 65 yet, right?

Starting point is 01:33:37 I have a picture, a little note, which is you are here. And it's about 25% of the way across. I don't know if I'll ever be as prolific as Peter was, but I'll share with you what I think was, there's so many things that were great about Peter, but here's what I think was really great. People think he was a management thinker, and he was. He was the greatest management thinker of all time. But as I stood back and looked at all of his work and tried to think about what he was really doing, I think he was in pursuit of a giant question. And the best way I can articulate that question is, how do you make society both more productive and more humane? If you think about it, that is one of the great social

Starting point is 01:34:34 questions. How do you make our society both simultaneously more productive and more humane. And I think when you look at across the arc of his life, it was guided by a gigantic, beautiful, beautiful question. Pete Thank you so much for that story. I'm just envisioning you seeing him sitting in that chair and then later sitting in the chair and how surreal that must have felt. It was surreal. And in a way, it almost felt, no, this is Peter's chair. Although I recently have started this thing around here where what I describe is, you know, wicker chair meetings. I don't have a wicker chair, but I'll just sometimes meet with people, you know, that just there's something with cross-patterns just like oh we're going to sit down and have tea for a little while

Starting point is 01:35:28 I think of those as wicker chair conversations well I could spend the next hour on more questions about your experience with Peter experiences I should say but I will go read the forward because I must have an older edition

Starting point is 01:35:43 I will go find the forward with some of must have an older edition. I will go find the foreword with some of the lessons learned. Can you give us one of the things that whatever comes to mind that you learned from Peter, if you wouldn't mind sharing that? And then- I'll share with you two. Perfect. Well, gosh, actually, there's so many. Of course, I had ten of them, but I won't do all ten. One is that don't make a hundred decisions when one will do. And the idea of that is that Peter believed that you tend to think that you're making a lot of different decisions. But that actually, if you kind of strip it away, you can begin to realize that

Starting point is 01:36:30 a whole lot of decisions that look like different decisions are really part of the same category of a decision. And that what you want to do is to then be able to say, no, I'm going to make one big decision that will be replicated many, many times because it kind of conceptually captures it. So, for example, one version might be, so in my own case, right, you get, and I'm sure you encounter this too, you get lots of wonderful, interesting invitations. Things to go do this or to go do that or to speak at this or whatever. They're wonderful. I mean, never be ungrateful for those opportunities. But you have to be very selective about what you do. And so as I was struggling with how do you decide which to do, right, when you're going to say no to most of them.

Starting point is 01:37:24 They all can look like a series of individual decisions, but then actually, no, there's actually a couple of really big decisions. Is it a great teaching moment, potentially? And will you learn something? Okay, that's like a meta decision. And now you can sort of strip away. It's like, actually, the question is, is it a great teaching moment possibility?

Starting point is 01:37:46 Or is it not? It's very different than should I go to Austin and do this event, right? Or should I meet with this person? They look individual, but they're really part of a whole. That's one. And you can think of that as the simple thing like what you wear. You can make a thousand different decisions or you could make one big decision and wear the same thing all the time, I suppose. The second is the one that, and I've shared this with some others, but it's so powerful. At the end of that day with Peter, I asked him how I could pay

Starting point is 01:38:19 him back. And he said, first, I had already paid him back because he had learned. And then he, and you got to remember, this was when we were doing the Thelma and Louise thing. We were really scared, right? We didn't know if this was going to work. And I was launching out to try to do this self-directed path and genuinely scared. And Peter said to me, he said, but I do have a request that you change your question a little bit. It seems to me you spend a lot of time trying, worrying about if you're going to survive. Well, you will probably survive. And you spend too much time thinking about if you'll be successful. It's the wrong question. The question is how to be useful. And that was the last thing he said that day. He just got out of the car and closed the door and walked away.

Starting point is 01:39:19 That was the Peter Drucker mic drop. Yeah, it was. It was. But, you know, I find that I go back to that over and over and over again. We have many, many, many avenues that we can go down. Hopefully, this is not the first and last time that we have a chance to have a conversation like this. But I want to define a term that's come up a few times already now. And that is flywheel. Yep. And you have a monograph, a new monograph, which is out, Turning the Flywheel, subtitle monograph to company good to grip.

Starting point is 01:40:07 But let's start with the term flywheel itself. What is a flywheel? So, and also describe why I chose to put creative hours into this, because there's lots of other things that are in the pipeline still and things that haven't gotten out. Why flywheel extension? Since the flywheel chapter already exists in good to great, why would I then write a monograph? So the idea behind the flywheel, so we were looking at, let's go back to good to great. We're looking at, the question was, why do some companies make the leap from good to great and others, right, who are the same, the comparison set, situation at moment in time, resources, industry, customers did not, right? So it's always the difference. And when we went into it, I had this bias towards believing that a dramatic transformation would happen in a dramatic way. And sort of thinking that there would be an aha moment,

Starting point is 01:41:06 a miracle moment, a point of breakthrough. You can really sort of see, you know, there was this grand thing that happened. And that was sort of an assumption. I don't know if I had it so explicit, but it was kind of in my mind. And then when we started interviewing, we were very lucky because we got to interview all the key executives, many of whom are no longer with us, but that were still alive, that had been on those teams when they made those leaps. What was it like when you were there? what was the point of breakthrough, or what was right. And repeatedly, we kept getting a response, which was, I don't get the question. That's a stupid question. There was no miracle moment. There was no moment of breakthrough. I don't think it was as dramatic as it sounds. It was more of a gradual process.

Starting point is 01:42:05 It was like an awakening that kind of happened in steps, right? We just got this over and over again and began to dawn on me that the way something really dramatic appears to those looking in from the outside is different than the way it feels to those doing it on the inside. And so it's like if you're watching an egg, right, and nothing's happening, it just looks like an egg is just sitting there and all of a sudden it cracks open and out jumps a chicken,

Starting point is 01:42:32 well, you could have a big thing, a radical transformation of egg into chicken and visionary leader transforms egg into chicken. But what's it look like from the chicken's point of view? It's just kind of one more step after a whole bunch of stuff that's been happening inside the egg that you couldn't see until it cracks open. So we were observing that the way it looked and the way it felt were different. And the way it sort of really happened on the inside, even though you can see the inflection on the outside, the best analogy I could come up with was it was a series of good decisions, supremely well executed, taken with disciplined thought, that added up one upon another over a very long period of time to produce a great result. So I had this image of pushing a giant, heavy flywheel.

Starting point is 01:43:27 And you start pushing it in this intelligent and consistent direction. You start pushing on the flywheel, and after a lot of work, you get one giant, slow, creaky turn, and then you don't stop. You keep pushing in sort of the direction of those three circles we talked about earlier, what you're passionate about, what you can be best at, what drives your economic engine, so it's not random pushing. And you eventually get two turns, and then you keep pushing. They eventually get four, and they start to add upon each other, and then eight, and 16, and 32, and 64, and 100, and 1,000, and then 10,000, and then 100,000. Then at some point, all that cumulative momentum, all that cumulative, sort of like there's a breakthrough that happens, but how did it happen?

Starting point is 01:44:07 What was the one big push that made it go is a nonsense question. It would be like asking what was the one investment that made Warren Buffett Warren Buffett? Well, that doesn't make sense, right? So it's a cumulative effect. And then we observed in the comparison companies that they bought into the idea of these sort of dramatic moments or radical transformations or cultural revolutions or whatever, save your CEOs, anything that we're trying to jump to break through in sort of one big step rather than the building of the flywheel. That was kind of a doom loop. We wrote this chapter called The Flywheel and the Doom Loop, which was chapter eight of Good to Great. It really captured... It was a really neat chapter because it just, for me, turned out on its head about how it actually happened. It came from the research.

Starting point is 01:44:57 It was all from the research. Then, after publishing Good to Great, and it changed our lives, and I'm very grateful for how many people it reached. But right around the time of its publication in 2001, it was published in September, October of 2001, I was invited up to Amazon. The five-wheel principle was embedded in good to great. It's a fundamental principle of how great companies get built over time, once it lasts and so forth. And I knew the principle. And I was there with executives in Amazon. And all I did was teach. I just taught them the principles in good to great, and particularly the flywheel. Coming out of the dot com, it's like, don't respond to this as an event, respond and build a flywheel.

Starting point is 01:45:48 And great students often take things and make them even better. And what they did was they took the flywheel and then made it their own. And what they did was to say, we're going to harness the flywheel principle that came from good to great, but we're going to do it by getting clear on what is our flywheel. And so to really harness the flywheel, then you have to be able to say, okay, so, but that's great. The flywheel principle is the principle, but how do you then turn that into your own flywheel? Like what is the flywheel? And what the Amazon people did kind of in a more simplistic form, but I'll just grab it here. Essentially, they had this sort of reinforcing loop, right?

Starting point is 01:46:29 You know, if you lower prices on more offerings, well, then you almost can't help but go down to the next step on the flywheel. Picture a circle going around, right, to increase customer visits. And if you increase customer visits, well, then you almost can't help but get more third-party sellers. And if you get more third-party sellers, well, then you almost can't help but expand the store and extend distribution. And if you do that, you can't help but grow revenues for fixed costs. And if you do that, you can't help but be able to lower prices on more offerings, which is going to attract more customer visits, which is going to attract third-party sellers, which is going to expand the store and extend distribution. You can eventually buy Whole Foods and all the other stuff.

Starting point is 01:47:10 You're going to grow revenues per fixed cost and then, boom, lower prices on more stuff, et cetera, et cetera. Now, the beauty of that was that they got very specific. And what I came to understand was the flywheel principle best comes to life when you can really capture it. But here's the key. People talk about flywheels. We have a flywheel, whatever. And what I came to see is that people didn't necessarily really have a flywheel because they didn't understand something deeply important about what a flywheel really is. A flywheel is an underlying, compelling logic of momentum. It's not a list of steps drawn as a circle called a flywheel. Rather, there's an inevitability built in.

Starting point is 01:47:58 If you do A, you almost can't help but do B. And if you do B, you almost can't help but do C. And if you do C, you almost can't help but do D. And around, around, and it gets driven around because there's an underlying connection. There's a logical sequence that builds dynamic momentum because A drives B, drives C, drives D, and around back to the top of the loop. And that if you can kind of stand back and then say, we need to engage

Starting point is 01:48:34 in the very hard thinking of figuring out exactly how our flywheel turns. What is our flywheel in a way that truly has that inexorable driving momentum within it? And different organizations will have different flywheels. Different people will have different flywheels. You have a flywheel, right? And then the key is you build it over a long period of time. And the power of a flywheel is that it's an underlying logic. It's an underlying architecture. It's an underlying architecture. It's not a single business, right? It's something that can be extended. You can then extend it into new things as you experiment and find new things that will drive the flywheel even further, whether it be going from military bombers to commercial jetliners in the case of

Starting point is 01:49:21 Boeing, but the same underlying architecture. Going from memory chips to microprocessors in the case of Intel, but the same underlying architecture. And so what the flywheel monograph is about is basically after, I like to say to people, just because you're the one who articulated the principle as we did in good to great we've we uncovered it we articulated it uh and and it's right but it doesn't mean you yet fully understand it even if you're the one to bring it forth after 15 17 years of really reflecting on it i realized that my understanding of the flywheel back in good to great was right but primitive And so this notion of really, really thinking through the specifics of a flywheel became something that I really wanted to share with people because I felt that

Starting point is 01:50:17 people were talking about it a lot, but not really understanding it. And so that's what that's about. And just for people who may be wondering, when you say monograph, one way to think of this would be as a short book. It's, I think, 46 pages. About 40 pages, yeah. Yeah, 40 to 46 pages. And in that, you also talk about,

Starting point is 01:50:41 you give other examples and walk through Vanguard, Cleveland Clinic. You did mention earlier, and I don be happy to chat about it. Let me just share with you one thing, though, about the different examples that are in there. They cover such a wide range. We have an elementary school where a school principal uses it to create results for kids, basically. And you've got healthcare and you've got healthcare, and you've got startups and whatever. But why a monograph? This is McPhee, I hope would like this idea. A piece of writing has a natural length. A symphony has a length.

Starting point is 01:51:38 Gimme Shelter by the Stones has a length. You wouldn't say to Gimme, well, we should make Gimme Shelter a 72-minute piece. It's the wrong length for Gimme Shelter. And writing is like music. It has an appropriate length for what the music is trying to do, to be. And what I realized back in 2005 was sometimes you can have something that is a powerful extension idea or an idea. It really shouldn't be a book. It's not enough to be a book.

Starting point is 01:52:10 Yep, 100% agreed. Yeah, but it shouldn't be just an article because that's ephemeral. Because if it's durable, so we were really struggling. We wrote this thing called Good to Great in the Social Sectors, which was another monograph. And I was like, what are we going to do with this? If we make it an article, it's too perishable and too short. And if we make it a book, it's too long.

Starting point is 01:52:32 And then I, well, do you make it a chapter in the back of Good to Great? Well, the problem with that is then all the millions of people who bought Good to Great need to buy another copy of Good to Great. That's not right. So, Joanne, my strategic brain, said, well, why don't we create a monograph and publish that? And started thinking about, remember, common sense? Think of the impact of common sense by Thomas Paine. It didn't have to be big. It was the right size. And so I thought, well, why don't we bring back the genre? The monograph size. And so we wrote Go to Great in the social sectors.

Starting point is 01:53:15 I remember printing 50,000 copies and thinking, I don't have 50,000 friends to give it to when it won't sell. And then it ended up reaching lots of people. We decided to do one on the flywheel here. So my own flywheel, if you want to chat about that, I'd be happy to take a cut at describing it. Yes, please. When you do a flywheel, you need to first ask, where's the flywheel going to start? So in the case of Amazon, it's an economic flywheel that ultimately brings stuff to more customers and so forth. It starts with lower prices on more stuff, right? But Cleveland Clinic begins with getting the right medical professionals that can fit in their culture. Giro, sports designer, Intel starts with great innovative products. So the start of the

Starting point is 01:53:55 flywheel is a key question. And in my case, it's curiosity-fed big questions. That's where my flywheel starts. It all starts with what am I curious about. That has to be the beginning of everything. Now if I'm really curious about something, well then I can't help but want to learn about it and do research on it. And that will throw me into the research. If I do the research right and really, really throw ourselves into it and stay on those creative hours of the research, well, then I can't help but have ideas and insights, concepts that come out of that research. And then if I have those,

Starting point is 01:54:40 then I can't help but want to write them and teach them and share them. And that means going through the suffering of writing, right, as you know, right? And to write them well and to wrap them well and to get the concepts in the right vessels. I can't help but want to do that. And if I can't help, if I do that, well, then I can't help but have at least some impact on the world if it's well done. Because that's the power of writing. You never know where it goes. And if you have impact and reach in the world, well, then you can't help but have funding that comes from that.

Starting point is 01:55:16 Meaning there's some economics that comes that allows you to do what? Fund and feed your next curiosity big questions, which then leads to the research, which then leads to the chaos to concepts, which then leads to writing and teaching, which then leads to impact on the world, which then generates funding, which then allows me to fund the next question. And then it's perpetual. Is it also the case that in some cases, I'm struggling with how to ask this question because it just occurred to me, but I suppose it is that, is it as true that there are negative flywheels as there are positive? Sort of these vicious cycles that are reinforcing within companies that people should be aware of? Or is the flywheel as you use it a virtuous cycle? Should people be really interesting to think about dysfunctional flywheels, right, and really think about those. And I would offer two things. The first is that if a flywheel doesn't seem to be working, you have to kind of get the diagnosis right because it could be that the flywheel is just, you haven't got the flywheel right.

Starting point is 01:56:43 Or it could be that the flywheel is fine, but think about the inexorable logic. Imagine you could score each of the five or six components on how well you're doing it, say 1 to 10. And suppose your scores are 8, 9, 10, 9, 3, 9. Well, the very nature of the flywheel, the fact that it's the reinforcing logic that builds incredible momentum over time, has a downside, which is that that three stops the whole flywheel. And so you have to be able to say, well, maybe we have a flywheel that's working. It's a great flywheel, but the problem is we're not executing on this piece of the flywheel, and therefore the entire flywheel stalls or stops. So that's an important thing for people to think about. You can't – if you do five,

Starting point is 01:57:28 six of the flywheel well, you don't get five, six of the momentum, you get none. And that's sort of the downside of the flywheel because you got to execute on all of it. Now going to this other question, in Good to Great, and a lot of this concept came from Good to Great, which is why we go back to it a lot. There are all the other books built to last great by choice and so forth. But in Good to Great, and then later we explored it further in How the Mighty Fall, which is studying how great companies fall. We described this other pattern we saw in the comparison companies or in the companies that fell, which is a doom loop. So you have the flywheel on one hand, and you have the doom loop on the other side. And yes, and the doom loop, though, tends to have the following pattern. You are grasping for some sort of salvation, a new savior, a new program, a new strategy,

Starting point is 01:58:16 a new direction, a new right, because things aren't working. And because it really doesn't have underlying flywheel logic to it, it doesn't really get any traction. There's a burst of hope and, well, gosh, maybe this will really work. And then that's false hopes dashed by events. And then that produces kind of a reaction without really understanding what really worked, which then leads to another grasp for salvation. And what happens is you drive yourself further and further down in that grasping for salvation, which is stage four of five stages of when great companies fall. And that eventually leads to companies really going to the bottom. So while you can have actually, because again, you always have the comparisons, the good to greats and the comparisons, the built to last and the comparisons.

Starting point is 01:59:00 The comparisons often, in fact, double down on a doom loop and drive themselves into the ground. Thank you for clarifying that. I have just a few more questions. Are you okay to go for another five to ten? Sure. You may want to sort of zoom out on something else of just sheer curiosity. Oh, yes. That's exactly where I'm going. And it is. I've observed you to be in the research for this and your writing also in this conversation. Very data driven, very methodical. Someone who who who trust in the data, trust in the data. And there are two things that I'd love for you to put in

Starting point is 01:59:47 context or explain for me, which are, which, which at least at first glance don't seem to fit. And it could be that I'm misperceiving who you are, or it could be that I'm misperceiving how things transpire. The first is, well, there are two that jumped out. The first is you having mentioned that you got engaged four days after your first date. The second was around 35, 36, your Thelma and Louise moment where you had less than $10,000 in the bank and you've kind of threw this Hail Mary. Those both seem very out of character. So, is it that you looked at the downsides, decided you could survive, and you ran some type of calculus?

Starting point is 02:00:31 How did these two things happen, given that you seem to be encoded to be very data-driven, to think through the contingencies, to test the assumptions, and so on and so forth? So, I think those are related but very different situations, and I think one of them is consistent with one of our principles, and one of them, I don't know where to put it. So one of the key principles from all of our work is the notion that life, everything, you have to kind of, you know, great things build by disciplined people, disciplined thought, disciplined action, then building it to last, and then you multiply times return on luck.

Starting point is 02:01:09 Luck, L-U-C-K. And it's, by the way, the evidence is very clear. The big winners are not luckier. We were able to establish that by quantifying luck and studying it. The big winners get a higher return on their luck than the comparisons. But they don't get more luck per se. Now, and I've mentioned the notion of who luck all the way through our conversation and lessons from great mentors. One of the key things we've learned in our works, everything starts with people, disciplined people, but also just people. And I don't know how you quantify certain aspects of just things about people. I mentioned earlier friends in my marriage and just time with

Starting point is 02:01:56 people you love, meaningful work with people you love and respect. And so with Joanne, we found each other. We both came from families that were clearly not built to last families. And we met in Boulder very briefly, but we really met in college at Stanford. And our first date was a run. And I wasn't really a runner, but I really wanted to be around Joanne, but I couldn't, I was too shy really to ask her out. But so she eventually said to me, I said to her, are you still running? And she said, yes. And I said, well, I'm thinking of upping my mileage, which was true because I had just thought of it and talked about it.

Starting point is 02:02:49 And so she said, would you like to go for a run? And I said, sure. And I went over to her dorm room, and she took me out on an eight-mile run. Oh, you want to run. Yeah, you want to run. And anybody who knows the Stanford campus knows that if you go out sort of towards Page Mill Road, you go immediately uphill at a campus. So we went three miles uphill. And then sort of about the three-mile mark, it became very clear to her I wasn't really that much of a runner.

Starting point is 02:03:23 And so we walked five of the eight miles back. And we got to know each other really well. And that was my senior year and her junior year. And by Thursday, we had simply decided to throw our lives in together. I don't know where the data comes from that. I don't know the evidence. I just had this sense, and I think Joanne did too, of this incredible stroke of luck that these two people had. I mean, we found each other, and it was just an instinctive thing, and we just did it. It was truly, and it's funny because Joanne later was the Nike athlete. She won the Ironman in 1985. She was in the original Just Do It campaign. So maybe she was

Starting point is 02:04:12 already thinking, just do it, right? We're going to get married. So anyways, and we got married about six months later. And I can't say where the evidence comes on that, but it's hands down the best decision I ever made. But then the key is the commitment to make it work, because relationships are about, I mean, you just, the unwavering, we will not fail at this marriage, no matter what. And you have to have some place in your life. You know, in good to great,

Starting point is 02:04:50 I wrote in the acknowledgements one of my favorite paragraphs I've ever written. And it's at the end of the acknowledgements and I was going to write about Joanne and I wrote a line which is along the lines of, success in the end for me is that my spouse likes and respects me ever more as the years go by. And I hope, by that measure, to be as successful as she is. So I don't know where that comes from.

Starting point is 02:05:35 Yeah, well, you said at the very beginning of this conversation, or maybe you were quoting Wittgenstein, I can't recall, but many of the most important things sort of transcend the capabilities of language, right? And this certainly seems to fall into that category in some respects. Yeah. The big bet, so one of the things that we learned in Great by Choice with my co-author Morten Hansen, another great stroke of who luck in my life.

Starting point is 02:06:08 He's a tremendous, he's a genius research methodologist and a great, great partner on Great by Choice. One of the things that we struggled with was the role of big bets and the role of kind of new directions and innovation and so forth. And one of the things that we found is the importance of empirical validation, which is really different than pure analysis. And it's a principle we call fire bullets, then fire cannonballs. And the idea being, you have a certain amount of gunpowder

Starting point is 02:06:39 and you have a ship bearing down on you. And imagine you take all that gunpowder and you put it in a big cannonball and you fire at that ship and it misses and you turn and you look back and you're out of gunpowder. And now you're in real trouble. But imagine if instead what you did was you fired bullets and you fire your first bullet and it's 30 degrees off and then you take another bit of gunpowder and you fire a second bullet and it shoots out there and now you're only 10 degrees off.

Starting point is 02:07:08 And then you take a third bullet and you fire and it hits the side of the ship, ping, you know you have a calibrated line of sight. And now you take your gunpowder, whatever you have, and you put it in a cannonball and you fire it on the calibrated line of sight. And what we learned is that, and I'll tie this into the Thelma and Louise moment, because what we learned in our research is that one way you extend a flywheel is you're firing bullets, and then every once in a while you get calibration, and then you fire a big cannonball on a calibrated line of sight, which then adds a big burst of momentum into a whole new, not necessarily new direction, because the flywheel's turning, but it gives you an empirically validated big bet that can give you massive momentum. And the key there is, notice though, it's empirical validation. And that

Starting point is 02:07:56 empirical validation are the bullets. If we go back to the Thelma and Louise moment, there is the moment of gulp when you fire the cannonball, right? I mean, you can't just sit there and only fire bullets. There comes a point when you got to fire the cannonball. In that case, I was really scared because if the cannonball didn't hit, I didn't know what was going to happen. We were really felt out there. But there were also six or seven years of bullets that had been the research we had done, the teaching in the classroom, and also some early response to Built to Last. There's no guarantees yet, but early response of people really resonating with the ideas. It wasn't like it just came out of the blue.

Starting point is 02:08:42 There were bullet, bullet, bullet. There was enough calibration that this was not crazy. The question was, would we have the guts at that moment then to take all of our gunpowder, put it into one big cannonball, and go? And there's a critical lesson I got from one of my mentors, another stroke of huluk at Stanford. Two great professors that were there with me when I was teaching, Bill Lazier, who taught me about the importance of relationships first in life. And there was this guy named Irv Grosbeck. And I asked Irv, do you think I should

Starting point is 02:09:17 keep enough capital alive here at Stanford that if this doesn't work out, I could come back. And Irv said to me, an option to come back has negative value. And I said, I thought options always have positive value. He said, no, not on a creative path. Oh, that's a really, that's such an important point. Exactly. And he said, if you have the option to come back, it will change your behavior. And you're doing a low odds game, which means you have to put all in 100% full cannonball, go off that cliff. Otherwise, you're going to hold something in reserve. And when it gets really scary, you're going to pull back. Option is not in your interest. So we took all the gunpowder and fired it out and there was no retreat. And then when

Starting point is 02:10:14 you're making the decisions, you're out there like, how are we going to get the car to the other side? And then the Thelma and Louise jump. Well, there's no tether back. You have to make it. And the good news is you've done a hell of a lot back. You have to make it. And the good news is you've done a hell of a lot of calibration over six to seven years. Exactly. Just to underscore for people out there who are like, I'm quitting my job. Yeah, yeah. This moment, it's like, well, wait, hold on.

Starting point is 02:10:36 Correct. There is a burning the ships aspect to it, but it was very calibrated. Very calibrated. I don't know about the four days, but the rest very calibrated. Very calibrated. I don't know about the four days, but the rest was calibrated. Well, that was calibrated, just perhaps not with your prefrontal cortex as much. Right.

Starting point is 02:10:56 There's a lot, a lot. Well, anyway, we could talk about, we could talk about, dive into that another time. But I mean, there's thinking fast, thinking slow, there's a lot to decision making, only part of which we're able to express with language. But what a story. Jim, this has been so much fun. I highly encourage people to read all of your work, but the newest, and I think this is a very, very, well, I don't think, I mean, it is a very important concept, the flywheel and the expansion upon that. So turning the flywheel, people can find that everywhere books are sold. They can certainly find you at

Starting point is 02:11:35 jimcollins.com. Many more questions I'd love to ask sometime, but I think this is a very solid session for me to reflect on. I have tons of notes sitting here in front of me. I've been trying to take my notes quietly. But is there anything else you'd like to say, ask if people suggest any parting words before we wrap up this conversation for now? If I were to kind of step way back on everything, there's a line that Joanne uses a lot, which is life is people. And we've talked about who luck and great mentors

Starting point is 02:12:20 and personal boards of directors and getting married after four days and great friendships and being on really great level five teams and whatever. But we get so wrapped up in all these things we're doing or things we're trying to get done, but life is really short. I mean, you know that. You named your company after the guy

Starting point is 02:12:43 who wrote Shortness of Life. And when you sort of add it all up, the one thing I, with everything we've talked about in this, I still think it all goes back to the first two. Life is people, and life at its best is about doing meaningful things with people you love. Here, here. Time with loved ones, high simplicity, time and flow state. Ultimately, it's the people. And Jim, is there anywhere online besides jimcollins.com, where people might learn more about what you're up to or say hello. Are you on this amazing yet sometimes dreadful technology, sometimes referred to as social media? I'm firing bullets. I fired a few bullets. I'm going to fire some at this point. I haven't done a lot with it. So I'm kind of in the calibration stage. And the

Starting point is 02:13:46 question I go back to on that with the social media is I've been struggling. Remember I said earlier, don't make a thousand decisions what one will do. What I have been struggling with is how, if I were to use that tool, do I make it great teaching moments? And for me, if I can kind of bullet the cannonball to that, then I'll probably do more with it. And if I can't, well, I've been fine without doing a lot. And where are you currently firing bullets? Then I have some thoughts, but is it on Twitter? Is it elsewhere? We have a Twitter account, which I think is called Level 5 Leaders. It is, at Level 5 Leaders.

Starting point is 02:14:39 At Level 5 Leaders. We have a Jim Collins Facebook page where Amy on my team helps me think about some postings. But we haven't put up a lot. So I wouldn't encourage that there's necessarily a ton there at the moment. We'll be firing bullets. Stay tuned. But our website, about some postings, but we haven't put up a lot. So I wouldn't encourage that there's necessarily a ton there at the moment. We'll be firing bullets. Stay tuned. But our website, jimcollins.com, everything there is designed to share and teach the ideas. And it's all really built around the ideas. When you go there, it's an ideas-driven website, and we've taken a lot of care to try to make it a place where students of the work can come and have almost like cyber office hours, if you will, and really learn. And that's what it's designed to do. So I will say just a few things related to social media. Yeah.

Starting point is 02:15:21 So the first is I've seen some incredible thinkers who've done a lot of deep work, go down in flames after tapping the vein with social media. So I would say, caution is warranted. That would be my first observation. Because you have a history of saying no so well, and you have so many policies that have served you in providing the space for the joyful solitude of deep work. So I would just say be very careful. And I was going to say when you were talking about burning your bridges that someone had said to me, you know, there are three addictions that are the most dangerous addictions of all, heroin, alcohol, and a monthly salary. But I would addictions that are the most dangerous addictions of all heroin alcohol and a monthly salary but i would i would add to that social media uh there there are however some examples and i'll just give you one of people who i think do an exceptional job of teaching uh using short form and there's one person on twitter there are many uh but i'll point to one

Starting point is 02:16:22 who's a close friend of mine his name is naval ravikantikant, and his handle is at Naval, N-A-V-A-L, like Naval Academy, but at Naval. So he might be someone to check out. But people can follow you at Level 5 Leaders. all of these various sites, all of the work, including, of course, turning the flywheel in the show notes, as always, at tim.blog forward slash podcast. You can just search Jim Collins and this episode and all of its notes will pop right up. Jim, this has been such a pleasure and has given me so much to think about. And I'm so, so grateful for having spent the last two hours with you. Well, I'm actually very grateful as well. And you're right, I don't actually say yes to very much at all. I've only fired bullets in this genre. And this is one that's like, I'm going to

Starting point is 02:17:19 commit to really preparing and having a good conversation with you. And part of it is because what I really learned about you is the care and depth of your preparation. And the fact that then you come into it with the idea of really wanting to have a conversation where you are present and engage with ideas and with thoughts. And so, you know, that notion of prepared curiosity, I think, is a great strength. And to be able to join you in that, for me, is a real pleasure. And we're going to count at least half of this as creative hours. Definitely. Absolutely. And this podcast is certainly, I have to figure out which piece of the puzzle, or I should say rather, which component of the flywheel it is, but it is certainly somewhere, because I feel drawn inevitably to be able to spend time with someone like you and share it with everyone listening. So thank you again for that. And to everyone listening, you can find links, notes for everything at Tim.blog forward slash podcast for all of the goodies that we discussed in this episode. And until next time, thank you for tuning in. Hey guys, this is Tim again. Just a few more things before you take off. Number one, this is Five Bullet Friday.

Starting point is 02:18:49 Do you want to get a short email from me? Would you enjoy getting a short email from me every Friday that provides a little morsel of fun for the weekend? And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered. It could include gizmos and gadgets and all sorts of weird shit that I've somehow dug up in the world of the esoteric as I do.

Starting point is 02:19:16 It could include favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short. It's just a little tiny bite of goodness before you head off for the weekend. So if you want to receive that, check it out. Just go to 4hourworkweek.com. That's 4hourworkweek.com all spelled out and just drop in your email and you will get the very next one. And if you sign up, I hope you enjoy it. This episode is brought to you by Peloton, which I've been using probably for about a year now. Peloton is a cutting edge indoor cycling bike that brings live studio classes right into your home. You can also do on demand, which is

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The Tim Ferriss Show - #361: Jim Collins — A Rare Interview with a Reclusive Polymath

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The Tim Ferriss Show - #361: Jim Collins — A Rare Interview with a Reclusive Polymath

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