SMaC Recipe: How to Survive in Times of Uncertainty

This article is an excerpt from the Shortform book guide to "Great by Choice" by Jim Collins and Morten T. Hansen. Shortform has the world's best summaries and analyses of books you should be reading.

Like this article? Sign up for a free trial here.

What is a SMaC recipe? Does your enterprise currently have a SMaC recipe—a plan you can turn into in case of a contingency?

SMaC stands for Specific, Methodical, and Consistent. A SMaC recipe is a set of defined practices that a company can turn into in extreme circumstances. If your enterprise doesn’t have a SMaC recipe, think about specific practices that have led to success in the past.

Here is how creating a SMaC recipe can help you increase your chances of surviving and thriving in the world of chronic instability.

What Is a SMaC Recipe?

SMaC is the abbreviation for Specific, Methodical, and Consistent. You can use it as a noun (as in “SMaC prepares a company for bad times”), an adjective (“We need some SMaC procedures”), or a verb (“Can you SMaC the new directives?”). A SMaC recipe is a set of operating practices that strikes the balance between being:

  • Durable—it remains largely unchanged through decades and can apply to a wide range of situations; and
  • Specific—it clearly outlines what a company should and should not do. All of the 10X companies had “don’t do” points in their SMaC recipes.
    • Example: Don’t wait for perfection to launch a product; aim for good enough, then improve (Microsoft); don’t be the first but also don’t be the last when it comes to innovation (Stryker).  

A SMaC recipe is something a company can turn to, especially in extreme circumstances, to remind them of what they need to do. It’s not something that changes frequently—much like the United States Constitution, it has an enduring framework that is specific enough not to be ambiguous or open to misinterpretation, while being flexible enough to allow for amendments when the need arises.

How and When 10Xers Change a SMaC Recipe

So many things are always changing in the world, from the economy to government regulations to the political situation to the environment…the list goes on. If your enterprise were to react to every change, you’d never find your footing. And yet, if you were never to react to any change, you might get left behind and become obsolete. 

While 10X companies created SMaC recipes that served them well for a long time, they were still open to carefully considered change when necessary. They blocked out the noise, recognized signals to change, and had the wisdom to know the difference.

You shouldn’t take a change in the recipe lightly. The research findings show that the 10X cases only changed 10 to 20 percent of their recipes over more than 20 years on average. Meanwhile, comparison companies changed 55 to 70 percent of their recipes over the same period. While some might argue that comparison companies had to keep changing their SMaC recipes until they got it right, it’s more likely that getting it right the first time and being consistent is the key to success. 

  • Example: In the eras of analysis, Microsoft changed only 15% of their SMaC recipe, while Apple amended 60%. Apple kept changing both their leaders and their positioning, swinging wildly from mass-market computers to premium computers and back. They only found their footing after Steve Jobs’s return: They went back to Jobs’s original recipe and stuck with it, eventually achieving tremendous success. 

When they did amend their SMaC recipe, 10Xers adhered to their core behaviors:

  • Fanatic discipline—they were thoughtful and deliberate in their amendments, always changing only what needed to be changed and retaining the rest of the recipe. 
  • Empirical creativity—10X companies used the bullets-before-cannonballs approach by testing and gathering empirical evidence before incorporating something new into the recipe.
    • Example: Memory chips were an integral part of Intel’s business, but they were fast becoming unviable due to the proliferation of cheaper Japanese products. Fortunately, Intel had fired other bullets and gradually built its microprocessor business over the years. They didn’t have to start from scratch when they let go of memory chips and switched over to microprocessors. (They also exhibited discipline by not changing anything else in their SMaC recipe—they continued investing in R&D, stayed true to their tagline of “Intel Delivers,” and so on, resulting in an impressive performance throughout the era of analysis.) In contrast, their comparison company AMD had a lot of good ideas, but it never stuck with any of them, pivoting from one recipe to the next. Thus, they were never able to gain momentum and never attained 10X success.
  • Productive paranoia—10X companies kept an eye out for any changes in the environment, then adapted as needed.
    • Example: In 1994, Bill Gates dedicated his “Think Week” to the Internet and organized a retreat so that Microsoft could assess the threat. After a couple of months, they concluded that the Internet was going to be a huge disruptor, and they thus acted quickly and decisively. Gates released an eight-page memo about the rising importance of the Internet, and Microsoft directed some of their energy towards developing Internet Explorer. It was a big change in their business, but Microsoft retained the rest of the SMaC recipe, never veering away from their core business, pricing strategy, and other SMaC ingredients.

If your enterprise isn’t growing as much as you think it should, it’s time to re-evaluate your SMaC recipe. Determine if it’s not working because you’re not sticking to it, or because circumstances truly require a change. 

Example

Faced with airline deregulation that would increase competition, Southwest Airlines’ then-CEO Howard Putnam evaluated how the disruption would affect their business. He concluded that, despite a change that would rock the industry, Southwest would not be greatly affected. Their best course of action was to simply keep doing what they were doing. He then formulated a SMaC recipe for Southwest that contained the practices that worked (and didn’t work) for them. It clearly outlined what they were supposed to do and not do, such as:

  • DO: Use 737s as their primary aircraft—why? Because using one type of aircraft means one set of parts, training manuals, and procedures.
  • DON’T: Offer food, or carry air freight or mail—why? Because adding these services would bog down airplane turnaround time.

Southwest’s SMaC recipe was simple, concise, easy to understand, and based on empirical data. It was so enduring and effective that, despite numerous disruptions in the airline industry (from fuel shocks to strikes to 9/11), the company only amended about 20 percent of the list in 25 years. These changes made room for Internet booking and longer flights, enabling Southwest to keep up with the times while still keeping the rest of their recipe intact. 

In contrast, their comparison company, PSA, effectively abandoned their recipe—the very recipe Southwest mimicked—as crisis after crisis pummelled them. PSA tried to become more like United Airlines, changing 70 percent of their recipe along the way. They eventually sold out to US Air. 

Exercise: Formulate Your Own Recipe

Increase your chances of surviving and thriving in a world of chronic instability. Create a formula that’s specific, methodical, and consistent. 

Does your enterprise currently have a SMaC recipe? If yes, is there anything that you need to change?

If your enterprise doesn’t have a SMaC recipe, answer: Based on empirical evidence, what specific practices have led to success and why? What specific practices have led to failure and why?

Given your insights from the previous questions, write a SMaC recipe consisting of eight to 12 points. These points should work together as a system, should cover a broad range of issues and situations, and should be able to endure for at least a decade.

SMaC Recipe: How to Survive in Times of Uncertainty

———End of Preview———

Like what you just read? Read the rest of the world's best book summary and analysis of Jim Collins and Morten T. Hansen's "Great by Choice" at Shortform.

Here's what you'll find in our full Great by Choice summary:

  • How you can make the choice to be great, no luck needed
  • Why certain assumptions about great leaders are actually myths
  • How some companies are 10X more successful than their competitors

Darya Sinusoid

Darya’s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain/mind/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.

Leave a Reply

Your email address will not be published. Required fields are marked *