How Advisors Can Go From ‘Good to Great’: Jim Collins

Bestselling author shares secrets of greatness at LPL’s annual advisor conference

Life-changing advice: “Why don’t you think more about how to be useful?” Life-changing advice: “Why don’t you think more about how to be useful?”

Bestselling “Good to Great” author Jim Collins crystalized a key aspect of greatness when he recounted a life-changing encounter with management guru Peter Drucker.

Speaking to some 5,000 advisors and their guests at LPL’s annual conference in San Diego, Collins — near the end of a tour de force lecture framing greatness in terms of 13 key lessons about leadership — recounted a personal experience that was to change his life.

In 1984, at age 30, he thought it was time to leave his job teaching entrepreneurship at Stanford, thinking it inherently contradictory to be a salaried professor instructing students in risk-taking.

A little anxious about the risk he was taking in seeking to become a freelance “entrepreneurial professor,” he rented a car and drove out to Claremont, California, to meet with the management legend Drucker.

The then 86-year-old management thinker graciously spent the day with Collins (“What’s a day with Peter Drucker worth? That’s a debt I can never repay,” he commented), whereupon Collins asked Drucker “which of your 26 books are you most proud of?”

Without missing a beat, Drucker replied “my next one.”

And indeed, Collins pointed out, even at that ripe old age, Drucker went on to write another 10 books. “Imagine what it is like to think of yourself as still so useful,” Collins said.

At the end of their time together, Drucker identified the elephant standing in the room, namely the young Collins’ nervousness about going out on his own.

Addressing Collins’ worries about survival, Drucker said “don’t worry, you’ll survive;” to his worries about success, he said “don’t worry, you’ll succeed.” Drucker’s simple advice: “Why don’t you think more about how to be useful?”

Those 30 seconds changed his life, Collins said. The secret to business and life is to be of use. And he spent an hour and a half instructing the LPL advisors in the mechanics of usefulness through a series of key questions that separate great leaders from the merely good or mediocre.

Collins illustrated much of that story through a comparison of the behavior of two explorers who set out to reach the South Pole — the Norwegian explorer Roald Amundsen and the British explorer Robert Falcon Scott.

The two teams left just days apart, but Amundsen’s team got there 34 days earlier and Scott’s team didn’t make it back, dying within 11 miles of reaching their supply depot.

Collins credits Amundsen’s “fanatic discipline, empirical creativity and productive paranoia” as critical to his team’s success (and but three out of 13 qualities of leadership he discussed).

Among the key determinants of success earlier outlined was involving the right people. Amundsen unceremoniously dumped people — even those with close personal ties — whom he thought would not be an asset to the team.

In contrast, “Scott allowed sentiment to override discipline” by allowing on the team a colleague who ended up undermining the expedition. Another example of his lack of discipline: Scott stopped at one point to collect rocks that were geologically interesting but not germane to the mission.

The two expedition leaders also handled adversity differently.

Scott had his men hunker down in the face of a fierce blizzard, while Amundsen’s attitude was that his men would march 15 to 20 miles a day no matter what the conditions were.

A frostbite-inducing blizzard he called “an unpleasant day” in his diary. And when weather conditions were uniquely favorable such that they could reach their destination, in theory, more quickly, Amundsen stopped his team if they met their 20-mile limit, concerned about over-reaching and depleting the team’s energy.

“What’s your 20-mile march?” Collins asked the LPL advisors.

The bestselling business author frequently sprinkled in his talk events in corporate history that illustrated his point, such as Southwest Airlines' 30-year unbroken record of profit, including even in the disastrous year for airlines, 2001, when 9/11 halted traffic.

Like Amundsen, Southwest exhibited the “discipline of consistency.” When 100 airports wanted the airline to open in their cities, the airline chose four new cities that year, not wanting to overreach and expose themselves to the risk of a potential reversal the firm might lack the wherewithal to survive.

Collins said that advisors, too, can display this “rudder effect by remaining consistent when everyone around them [i.e., clients] says ‘I want to abandon the march.’”

An indispensable aid in keeping on keeping on is what Collins termed “productive paranoia,” whose importance Amundsen and Scott again illustrated in their different approaches.

“Both Amundsen and Scott calculated supplies, but Amundsen multiplied [his calculation] by three,” thinking his team might need an extra buffer when conditions were at their worst.

Scott’s team, alas, ran out of supplies, tragically, when they were already on their way back.

That may be why astute advisors make sure their clients always have enough cash on hand to handle the extremes of market volatility, the author suggested.

Ultimately, Amundsen’s and Scott’s different fates were the result not of luck — they were dealt very similar hands — but rather the consequence of the different choices they made.

Whether for explorers or advisors, Collins said that “greatness is not a function of circumstance; first and foremost it is a matter of the choices we make and disciplined leadership.”

He bid advisors think about how they can increase their “return on luck.”

“Luck favors the persistent,” he advised. “Stay in game, keep playing, don’t give up; what really matter is cumulative effect; no great career ever comes by one hand or event.”

Returning to the lesson he learned from Drucker, Collins challenged advisors:

“The greatest leaders I’ve known and studied found a way to be useful to real-life flesh-and-blood people," he said. "How will you change the lives of others? How will some people’s lives be better and different because you were here?” 

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