#856: Jim Collins — What to Make of a Life and How to Maximize Your Return on Luck

Tim Ferriss introduces Jim Collins, author of "Good to Great," noting their previous popular podcast interview. Collins' new book, "What to Make of a Life: Cliffs, Fog, Fire and the Self-Knowledge Imperative," explores leadership and life's big questions. Collins' personal protocols and routines are described as remarkable. He will be speaking live on April 9th at the Commonwealth Club in San Francisco.

Jim Collins shares that he has more energy at 68 than he did at 37, attributing it partly to intense aerobic cycling in the Dolomites with his wife, Joanne. He emphasizes the importance of maintaining a high heart rate for extended periods. Collins also highlights his ability to nap anytime, anywhere, allowing him to experience "two mornings a day." He wakes up eager to start his day, typically around 4 a.m.

Tim Ferriss notes that Jim Collins' cohort did their best work after 50, 60, and even 70. Collins discusses the side passions of successful people, noting that 80% had intense interests outside their primary work. He was curious if people had room for anything else in their lives or were they just monomaniacally obsessed freaks. These passions ranged from disco dancing to studying the occult, teaching Sunday school, and hosting dinner parties.

Jim Collins explains that people didn't make a life where they had nothing else except the primary arena of their work to focus on. Tim Ferriss transitions the conversation to the book "What to Make of a Life," inquiring about the framing of the book versus the initial concept of self-renewal. He asks Collins to provide context on how the book was written.

Jim Collins recounts how his wife, Joanne, a world-class Ironman athlete, faced a career-ending hamstring injury. This "cliff event" led to an identity crisis, with Joanne expressing, "I feel like I'm dying." This personal experience sparked Collins' interest in self-renewal and how individuals navigate significant life changes. He realized that one way to study self-renewal would be to look at people who go through cliff events.

Jim Collins details his research methodology, which involved studying individuals before, during, and after "cliff events." He initially aimed to understand self-renewal but realized the core question was "what to make of a life." Cliffs force individuals to re-evaluate their purpose. This question arises in youth, mid-life, and later years. The creative journey of writing the book was not linear, but aimed for conceptual coherence.

Tim Ferriss notes that the book helped him not freak out about being in the fog. He found the concept of return on luck compelling and simplex stepping helpful. He began to ask himself how to think about energy as a core currency of life. He wants to distinguish encodings from strengths. He asks Joanne how she would answer why Jim has more energy now than he did at 37.

Jim Collins shares that Joanne would describe living with him as "exhausting." She would say that he has always had a high energy set point. He expands his energy in things that he derives tremendous intrinsic pleasure from doing. He loves the actual doing of it, that sense of if you're doing it, you can't not do it. He loves doing it.

Jim Collins says that Joanne would also say that he loves having a big project. He has no question what was in front of him at 4 a.m. There's always the project. He saw in all the people in the study the sense of extending out and circling back. He used to have painful fire, but now it's a sustained warming glow.

Tim Ferriss asks about the color shift from red to greenish-yellow. Jim Collins says that a lot of what really happened, happened as a result of studying the lives in this book. He was transformed by somehow living alongside them in their lives. He saw the sheer rapturous joy of Robert Plant blending his voice with Alison Krauss.

Tim Ferriss asks about finding your power zone with respect to encodings. He asks how to find what your encodings are. He asks what are encodings and how are they different from strengths. He asks how do you find them if you're not lucky enough to be like a Yo-Yo Ma who gets a cello handed to him when he's four.

Jim Collins says that there's the luck piece of how the roulette wheel of your life spins as to which encodings you discover and then there's what the encodings are. Encodings are durable capacities that reside within and they're awaiting discovery through the experiences of life. Most of us will come to our end with probably vast swaths of our encodings never discovered. He thinks of it as a constellation of encodings.

Jim Collins says that it's about doubling down on what you can do better than other ways you could expend yourself. This book has really affected him a lot when he thinks back to his prior, his classic work. It's about the seats and whether people are in seats where they're in frame in that seat. He has to learn how to do was to begin to find what the people around him, what their encodings are.

Tim Ferriss asks about the Enneagram. He is a self-preservation six. He has found it to greatly inform doing a Post-mortem on things and people who have not worked in his organization. He gets so clear the types that work and the types that don't. He found it incredibly helpful for thinking about dating.

Tim Ferriss asks about the 50, 30, 20 from respected faculty. He is a novelty seeker. He will get pulled into things that he is quite good at that do not align super strongly with his encodings. He's doing a lot of management stuff. He's wondering if Jim has ever succumbed to this type of Gravitational pull to other things where you end up kind of managing more than making perhaps.

Jim Collins says that he was getting pulled into things that he was not going to be encoded for. He was prepared for failure, but not prepared for success. He had to really fight that and to eventually just kind of clamp it all down, but to do it in a really systematic and disciplined way. He started counting his hours. He uses a punch card system.

Tim Ferriss asks if the punch cards are on a category by category basis. Jim Collins says that every week they calculate the punch card and the way it works is they have a point system. If he's going to do an engagement that involves an airplane, it costs more points. They are always thinking ahead to the fact that they're likely to say no.

Jim Collins says that in some cases, he will personally record a voice memo for the person expressing his appreciation for what they're doing and for the invitation and sort of try to close the whole thing out with a sense of, I want them to walk away and say, that was the most wonderful, disappointing answer I've ever received.

Jim Collins says that getting knocked out of frame was trying to manage his small system and he did a pretty bad job of it. What changed is once he got really good at people in seats for which they're encoded. He doesn't know how to package any of this. For him, it's been just, he observes.

Tim Ferriss asks if you don't want to manufacture crises to let's see how we all do in crises. Jim Collins says that it was really simple. It's like, boy, I'm really glad you're encoded for this. He trusts them. He doesn't second guess their encodings.

Tim Ferriss asks if that team member fit that description. Jim Collins says that his people would tell you that he's got them overutilized almost all the time. People are not encoded for just one thing. This person is also incredibly well encoded to coach people.

Jim Collins says that he'll get very excited here because he thinks that there is a really, really important set of questions here for company builders and company founders because personally, he thinks how you think about The intersection of your life to the cycles of building a company can be radically affected by how you think about this question of in frame or out of frame.

Tim Ferriss wants to talk about return on luck. He thinks that one of his encodings might actually be maximizing return on luck. He's good at combining those worlds separately. He's wondering if there are ways that people can Facilitate the process, find those encodings.

Jim Collins says that he's always been kind of attuned to the role of luck in life, good luck and bad luck. He was always really interested and curious about, well, you know, in the end, what role does luck play. You have to first of all define what luck is. Luck is not an aura or something. It's an event. It's a luck event.

Jim Collins says that there's what luck which is a good event that goes your way or a bad event. There's who luck. There's zeitluck. They were really good at getting a return on luck when return luck came because they have these things we called Natalie moments.

Tim Ferriss says that he thinks there's a lot of overlap and certainly he thinks his maximizing return on luck has an ROI distribution very similar to angel investing. He identifies with the what, who, and zeit luck. He's wondering if that resonates.

Jim Collins says that he thinks whatever the size of the surface, the idea of luck and return on luck, it's always operating. One of the reasons to be in certain environments, if you're fortunate enough to be there, is there's just a lot more tennis balls coming at you and there's a lot more around the hula side of it.

Jim Collins says that his life is often said there are lots of ways to be wealthy. But the way in which he has been incredibly wealthy is vast, vast set of huluk events. He was at the point where he was going to be contemplating and confronting the leaving Stanford to head out on his own and bet on his own work.

Jim Collins says that sometimes you have huluk. The key is You can have opportunities come at you and the hard part is when not to make a return on luck event out of it because it wouldn't fit your encodings. Tim Ferriss says that the great challenge in life is to separate an opportunity to be seized from a temptation to be resisted.

Tim Ferriss asks if you look at The people you have studied, whether it's for What to Make of a Life or other books or outside of the context of books, it seems like, yes, you can conclude distribution of luck for these matched pairs seems roughly equivalent, but the return on luck is not. Jim Collins says that the only mistakes you can learn from and the only bad luck events you can learn from are the ones you survive.

Jim Collins says that he wants to speak from a company standpoint. He wants to speak from a personal standpoint, company standpoint. He wants to see that not happen. He wants to see that not happen. He would love to see that not happen.

Tim Ferriss says that he'd love to ask you a question that may tie into a lot of what we've discussed already. He'd love for you to expand on it. An option to come back has negative value on a creative path because it will change your behavior.

Jim Collins says that it's not in your interest to have the option to come back. Options sometimes can have negative value because if you know you have the option to come back, it will change your behavior, the level of commitment. In low odds games, games where there's a very low odds of success statistically, if you don't go 100% all in, the odds will be zero.

Tim Ferriss says that he'd love to hear you discuss for a bit what you learned from simply choosing who to include in the book. You've applied, much like sometimes people think of options as always good things, not true. Positive constraints are a real thing.

Jim Collins says that there was a journey of really looking for a range of people Who would shine a light on the questions that he was interested in. If he was going to have matched pairs, he's got to find the opposite side of the pair. He discovered Roger Sherman, who met all of those tests.

Tim Ferriss asks if you could have chosen a cohort, and I've looked, just given my involvement in science and studies and so on, these meta-analyses of key contributions to science, and perhaps they're awarded with the Nobel Prize or something much, much later, but A lot of scientists, it seems, produce their most compelling work, let's just say, sort of in their startup years, right?

Jim Collins says that he would process this through a different lens actually at this point, which is that the way he would process this is having done this study, he thinks it's not a question of energy. He thinks it's a question of being in frame with your encodings.

Jim Collins says that a founder that kind of burns out may have not even really been in frame being a founder and the ones who really are in frame building a company. There's no evidence to him that their creativity, that their intensity waned until they were basically expiring.

Tim Ferriss asks if he can offer an alternate. The reason he was asking about the 50-30-20, how do you actually maintain the 50% of your time allocated to new intellectual creative work is because the alternate explanation he would probably vote for As to why some people seem to get lost or certainly don't focus on their encodings after some initial success and therefore you do see a peak and maybe a decline or plateau.

Jim Collins says that what happened with the people in our lives is there are these times when they're doing something they're encoded for that really feeds their fire that they're willing to flip the arrow of money to do. There are times in life when you're in hedgehog mode.

Jim Collins says that one of the things that is very clear about how people really got in frame in our study and he really resonate with this is a reflect on his own life too but question is what's the arrow of money are you doing what you do to make money. Tim Ferriss says that the older I get, the more I think about, I guess, finite and infinite games, cars.

Tim Ferriss says that he wants to also make sure he doesn't forget to ask you about this live event that I believe you're doing. Jim Collins says that there are very few times when he's just out there in a public event that people can sign up for, but related to this on April 9th, At the Commonwealth Club in San Francisco.

Tim Ferriss says that in our second conversation, we're going to start to land the plane shortly, but he was looking at A reference to the good to great acknowledgements. He's wondering if you would keep it to that, if you would revise that, add to it, simplify it. How do you think about success these days?