W h y s o m e c o m p a n I e s m a k e t h e

84 Jim Collins certainty as to whether he would even survive to see his family again. He shouldered the burden of command, doing everything he could to create conditions that would increase the number of prisoners who would survive unbroken, while fighting an internal war against his captors and their attempts to use the prisoners for propaganda. Atone point, he beat himself with a stool and cut himself with a razor, deliberately disfiguring himself, so that he could not be put on videotape as an example of a "well-treated prisoner" He exchanged secret intelligence information with his wife through their letters, knowing that discovery would mean more torture and perhaps death. He instituted rules that would help people to deal with torture (no one can resist torture indefinitely, so he created a step- wise system-after x minutes, you can say certain things-that gave the men milestones to survive toward. He instituted an elaborate internal communications system to reduce the sense of isolation that their captors tried to create, which used a five-by-five matrix of tap codes for alpha characters. (Tap-tap equals the letter a, tap-pause-tap-tap equals the letter b, tap-tap-pause-tap equals the letter
f;
and so forth, for twenty-five letters, c doubling in fork) Atone point, during an imposed silence, the prisoners mopped and swept the central yard using the code, swish-swashing out "We love you" to Stockdale, on the third anniversary of his being shot down. After his release, Stockdale became the first three-star officer in the history of the navy to wear both aviator wings and the Congressional Medal of You can understand, then, my anticipation at the prospect of spending part of an afternoon with Stockdale. One of my students had written his paper on Stockdale, who happened to be a senior research fellow studying the Stoic philosophers at the Hoover Institution right across the street from my office, and Stockdale invited the two of us for lunch. In preparation, I read In
Love
and War, the book Stockdale and his wife had written in alternating chapters, chronicling their experiences during those eight years. As I moved through the book, I found myself getting depressed. It just seemed so bleak- the uncertainty of his fate, the brutality of his captors, and so forth. And then, it dawned on me "Here I am sitting in my warm and comfortable office, looking out over the beautiful Stanford campus on a beautiful Saturday afternoon. I'm getting depressed reading this, and I know the end of the story I know that he gets out, reunites with his family, becomes a national hero, and gets to spend the later years of his life studying philosophy on this same beautiful campus. If it feels depressing

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for me, how on earth did he deal with it when he was actually there and did not know the end
of
the story" I never lost faith in the end of the story" he said, when I asked him. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade" I didn't say anything for many minutes, and we continued the slow walk toward the faculty club, Stockdale limping and arc-swinging his stiff leg that had never fully recovered from repeated torture. Finally, after about a hundred meters of silence, I asked, "Who didn't make it out" Oh, that's easy" he said. "The optimists" The optimists I don't understand" I said, now completely confused, given what he'd said a hundred meters earlier. The optimists. Oh, they were the ones who said, 'Were going to be out by Christmas' And Christmas would come, and Christmas would go. Then they'd say, 'Were going to be out by Easter' And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart" Another long pause, and more walking. Then he turned tome and said, This is a very important lesson. You must never confuse faith that you will prevail in the end- which you can never afford to lose-with the discipline to confront the most brutal facts of your current reality, whatever they might be" To this day, I carry a mental image of Stockdale admonishing the optimists "Were not getting out by Christmas deal with it" That conversation with Admiral Stockdale stayed with me, and in fact had a profound influence on my own development. Life is unfair-sometimes to our advantage, sometimes to our disadvantage. We will all experience disappointments and crushing events somewhere along the way, setbacks for which there is no "reason" no one to blame. It might be disease it might be injury it might bean accident it might be losing a loved one it might begetting swept away in apolitical shakeup it might begetting shot down over Vietnam and thrown into a POW camp for eight years. What separates people, Stockdale taught me, is not the presence or

86 Jim Collins absence of difficulty, but how they deal with the inevitable difficulties of life. In wrestling with life's challenges, the Stockdale Paradox (you must retain faith that you will prevail in the end and you must also confront the most brutal facts of your current reality) has proved powerful for coming back from difficulties not weakened, but stronger-not just for me, but for all those who've learned the lesson and tried to apply it. I never really considered my walk with Stockdale as part of my research into great companies, categorizing it more as a personal rather than corporate lesson. But as we unraveled the research evidence, I kept coming back to it in my own mind. Finally, one day during a research-team meeting, I shared the Stockdale story. There was silence around the table when I finished, and I thought, "They must think I'm really out in left field" Then Duane Duffy, a quiet and thoughtful team member who had done the AP versus Kroger analysis, said, "That's exactly what I've been struggling with. I've been trying to get my hands around the essential difference between AP and Kroger. And that's it. Kroger was like Stock- dale, and AP was like the optimists who always thought they'd be out by Christmas" Then other team members began to chime in, noting the same difference between their comparison sets-Wells Fargo versus Bank of America both facing deregulation, Kimberly-Clark versus Scott Paper both facing the terrible might of Procter
& Gamble, Pitney Bowes versus Addresso- graph both facing the loss of their monopolies, Nucor versus Bethlehem Steel both facing imports, and so forth. They all demonstrated this paradoxical psychological pattern, and we dubbed it the Stockdale Paradox. The Stockdale Paradox is a signature of all those who create greatness, be it in leading their own lives or in leading others. Churchill had it during the Second World War. Admiral Stockdale, like Viktor Frankl before him, lived it in a prison camp. And while our good-to-great companies cannot claim to have experienced either the grandeur of saving the free

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world or the depth of personal experience of living in a POW camp, they all embraced the Stockdale Paradox. It didn't matter how bleak the situation or how stultifying their mediocrity, they all maintained unwavering faith that they would not just survive, but prevail as a great company. And yet, at the same time, they became relentlessly disciplined at confronting the most brutal facts of their current reality. Like much of what we found in our research, the key elements of greatness are deceptively simple and straightforward. The good-to-great leaders were able to strip away so much noise and clutter and just focus on the few things that would have the greatest impact. They were able to do so in large part because they operated from both sides of the Stockdale Paradox, never letting one side overshadow the other. If you are able to adopt this dual pattern, you will dramatically increase the odds of making a series of good decisions and ultimately discovering a simple, yet deeply insightful, concept for making the really big choices. And once you have that simple, unifying concept, you will be very close to making a sustained transition to breakthrough results. It is to the creation of that concept that we now turn.