Decision making

Jim Collins on Decision Making

When he's not out scaling mountains (he's a world-class rock climber), author Jim Collin seats, drinks, and sleeps business. So when FORTUNE senior writer Jerry Useem (a sometime Collins collaborator) asked him to discuss the art of decision-making, he got so into the idea that he pored over 14.years of research and interviews he had amassed in the course of writing his business blockbusters Built to Last and Good to Great. Then, in a series of conversations, he and Useem explored the intriguing insights he had gleaned from analyzing the processes behind key decisions in business history. For example, lasting excellence in corporations seems to stem less from decisions about strategy than decisions about people, and seeking consensus is not the way to make the tough calls. Here are edited highlights of their talks.

What were the surprises when you reexamined your research through the lens of decision-making?

We tend to think that decisions are very much about "what." But when I look at my research notes and I look at interview transcripts from the executives we've interviewed, one theme that comes through is that their greatest decisions were not "what" but "who." They were people decisions.

Why are people decisions so important?

Fundamentally, the world is uncertain. Decisions are about the future and your place in the future when that future is uncertain. So what is the key thing you can do to prepare for that uncertainty? You can have the right people with you.

Let's take a non-business case and a business case to illustrate the importance of the people piece. In 1978, Jim Logan and his partner, Mugs Stump, became the first people to climb the Emperor Face of Mount Robson in the Canadian Rockies. And to this day, everybody else who's tried the face has either died or failed on the route. When I asked Logan, "Why were you able to do the Emperor Face?" he said, "Because I made the single most important decision, I picked the right partner."

He told me that there was this one place, the "death zone," and once they went above it, they really couldn't retreat. They were going to either summit or die—no going back. They didn't know what they were going to find beyond that point, and they didn't know what the weather was going to be. And so, therefore, what's your greatest hedge against uncertainty? Having people who can adapt to whatever the mountain throws at you.