Every company should ask these 5 questions before chasing AI, says Jim Collins

After decades spent studying why some companies endure and flourish while others fade away, Collins has turned his piercing gaze to a far more personal question: What to Make of a Life, which is the title of his new book.

Built on a decade-long research project examining the lives of acclaimed writers, musicians, athletes, activists, scientists, political leaders and other public figures, the book explores how even the most accomplished individuals encounter "cliffs" (rupture points that force them to confront who they are) and "fogs", which he defines as prolonged periods of uncertainty when the path ahead is anything but clear. Yet, despite tremendous setbacks, these individuals manage to keep their inner fires burning, discovering meaning, purpose and fulfillment across decades.

In an exclusive interview with Mint, Collins discusses what drew him towards this more personal subject, whether the book's insights resonate in a country like India, and what companies can do to thrive in the age of AI. Edited excerpts:

What prompted you to write about individual lives after decades of writing about companies?

I've always been fascinated by all the human drama of people and leaders and how they would create something visionary and spectacular in the world. Great companies don't build themselves, people build companies, and I was always fascinated by what led people to do such audacious things.

The seeds of my latest book predate all of my prior work studying great companies. I begin the book with the story of how as a young kid I desperately hoped that my father could be a father and provide me guidance, but he couldn't be that person and so I was on my own, in the fog of life. I had no framework or ways of understanding how to live a life. Much later, my wife Joanne had to give up her successful athletic career due to an injury. That was, as I define in the book, a cliff moment, which are events that change the trajectory of your life.

All these experiences came together in 2013, when I thought to myself that I’ve done a lot of work on what makes great companies, but perhaps now it was time to take on this big question—what to make of a life.

What common factors help both companies and individuals reach their full potential?

I wasn't looking specifically for links between my past work and this new project, but now that it's done, I can see some real ways in which there's a blending. And it is in the area of people.

There's a phrase in Good to Great which goes “first who, then what”, which means you’ve got to get the right people on the bus before figuring out where to drive it. You’ve got to have the right people in the key seats, which means aligning people's responsibilities in frame with what they’re encoded for, feeding their inner fire.

The same person can be a lightning bug or a lightning bolt, depending on whether they're in frame or not. So now, I’ve begun challenging leadership teams by asking them if they’re really thinking about each person and whether they are in frame.

This sort of flows into our personal lives. For instance, I used to spend a lot of emotional energy feeling frustrated with what people are not. But after doing this study, I came to realise that every person has their own beautiful constellation, and when they're in frame with that, it’s a really beautiful thing to see. So now I don't try to change people into what they're not. Instead, I try to move the frame so that it highlights what they are and fits with what they’re encoded for.

This has been a profound transformation for me personally because my relationship with my team and the people in my life has profoundly changed, because I’m no longer trying to change them. Imagine how marvellous it will be if business leaders would do the same with their teams.

The book gives examples of extraordinary achievers. Did you ever consider looking at the lives of everyday people as well?

From a research standpoint, I needed people who had so much information on their lives that I could study deeply. Also, a lot of material in the book is people’s thoughts and actions way before they became famous, way before they knew whether it would all work out. So this gives you a lens into how people were thinking as they went through the various stages of their lives.

Also, just like very few companies transition from good to great, only a handful of us will ever get to be senators or presidents or world-famous performers. But that doesn't mean everybody can't learn from studying their lives.

All the lives you write about in the book are American. Do you think you also could have examined other countries and cultures? For example in India, can one realistically tell a disadvantaged young person not to chase money?

A very fair question. Now in the book, one of my favourite chapters is on ‘flipping the arrow of money’, by which I mean that every person discussed in the book saw money as an input to do what they really wanted to work on, instead of treating their work as a way to make money.

Of course, they also had to face the practical reality early in their lives on how to earn a living, and most of them did not come from wealthy families. So we had someone like Maurice White (founder of the band Earth, Wind & Fire), who survived on eating one meal a day and so on, but kept going on because he so deeply wanted to do his music.

This chapter takes a cardinal look at how these people managed to ‘flip the arrow of money’ when they didn't have the resources to do so, and how they built income streams to support themselves. But that said, I agree with you. I think it would be fascinating to examine lives in other cultures and countries and see what we can learn additionally.

What are your views on artificial intelligence?

There's no question AI is a very, very big deal. The question is how does a great company deal with a big technological revolution like this? The answer is that they have to understand the flywheel (popularised in Good to Great, it refers to a company becoming great through a series of consistent actions that build momentum over time). A great company benefits from the compounding effect of the flywheel where it knows that if it does A, it can't help but do B, and if it does B, it can't help but do C and so on, which sets its flywheel in motion.

So as a company, what you really have to understand is how does our flywheel really turn, and how does this great technology (AI) fit to accelerate our flywheel? So the message I give to corporate leaders about AI is that it is incredible and is going to have a profound impact, but it's not going to do you any good unless you know how to harness it to your flywheel. One of my role models is Peter Drucker, and he lived with a giant question his entire life, which is how do we make society both more productive and more humane. Think how beautiful that question is. This is my lens of looking at AI. How do we employ AI in a way that can make society both more productive and more humane.

Amid this AI mania, many Indian companies are facing significant criticism for not investing in innovation. How can Indian companies move up the value chain?

For any company facing this situation, I tell them to ask themselves five questions. First, do we have the right people on the bus and in the right seats for innovation? Do we have people who cannot help but innovate? Just by having those people, we as a company will innovate.

Two, what are the brutal facts about our own reality and how the world is changing around us? And what must we do to successfully confront those facts?

Number three, what can we truly be the best in the world at? This is defined as meeting the following test—if we disappeared, it would leave an unfillable hole.

Question four, what is our flywheel? There's great power when you get crystal clear as to what your flywheel is and how it turns. A really great flywheel has multiple components to it, but it's ultimately a momentum machine that builds turn upon turn over time.

And that brings me to question number 5, ask what must we do to renew and extend our flywheel?

Any company facing disruption and radical uncertainty should ask themselves these five questions.