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252 of 259 people found the following review helpful
5.0 out of 5 stars Will you choose greatness?
In Collins' new book he relies on the method you've seen in previous books like Built to Last and Good to Great. What's different in this one is he selected companies not just on their status or explosive growth, but because they succeeded in an extreme and uncertain environment. However, there's a caveat here: his research stopped in 2002, meaning there's no thorough...
Published on October 14, 2011 by Owen Jackson

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56 of 65 people found the following review helpful
3.0 out of 5 stars Cum Graino Salis - (to be taken with a grain of salt)
'Great by Choice' is the outgrowth of nine years of research. The authors studied high-performing firms that had beat their industry index by at least 10X for at least 15 years between 12/31/1972 - 12/31/2002. The resulting list, along with their paired less successful competitors, included: Amgen (77.2X its industry, less successful competitor Genentech), Biomet (11.2X,...
Published on October 30, 2011 by Loyd E. Eskildson


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252 of 259 people found the following review helpful
5.0 out of 5 stars Will you choose greatness?, October 14, 2011
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In Collins' new book he relies on the method you've seen in previous books like Built to Last and Good to Great. What's different in this one is he selected companies not just on their status or explosive growth, but because they succeeded in an extreme and uncertain environment. However, there's a caveat here: his research stopped in 2002, meaning there's no thorough analysis of how companies performed in the last 10 years (aka one of the most uncertain and chaotic business climates in decades). Collins and Hansen believe the future will be unstable and environments will be extreme for the rest of "our lives" (remember, these guys aren't Spring Chickens). So, they try to analyze company performance/greatness within the context of difficulty.

I always wish Amazon would show an easy-to-find Table of Contents for books, so I've created one for you here, complete with a summary of each chapter/section.

1 - THRIVING IN UNCERTAINTY
Collins and Hansen explain what the method for their book (what I described above), including the definition of a 10Xer, which is a company that beat their industry by 10 fold. Just 7 companies were selected as a 10X case out of 20,400 companies. The seven are Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines, and Stryker. They don't include Apple because their research lens of Apple vs. Microsoft focused primarily on the 1980s and 1990s (remember they stopped collecting data in 2002), which makes no sense to me. The present environment (the one in which Apple has exploded) is a far more difficult climate than the 80s-90s.

2 - 10Xers
Example of a 10xer is Southwest airlines, whose growth since 1972 is greater than that of Walmart, despite this period being a particularly harsh one for the airline industry. Anecdotes describe historic examples of 10xers and explains they aren't more creative, more visionary, more charismatic, or more ambitious, more blessed by luck, more risk seeking, more heroic, or more bold. The glaring fact that Apple is missing goes against this model, as Jobs and company were many of these things.

3 - 20 MILE MARCH
Here they introduce discipline as the key that sets 10Xers apart (hence the 20 mile march). 10Xers are focused on data with GREAT discipline and stick to their plan, like a 20 Mile March.

4 - FIRE BULLETS, THEN CANNONBALLS
10Xers were not more innovative than the control companies; indeed, they were considered less innovative in some comparisons. 10Xers scale innovation (firing bullets) and then the fire cannonballs once they know what's on target.

5 - LEADING ABOVE THE DEATH LINE
Explains "productive paranoia," the idea that you need to build cash reserves and buffers, bound your risk, and show flexibility in looking at macro and micro factors at play in your business and industry.

6 - SMaC
SMaC stands for Specific, Methodological, and Consistent. The more uncertain your environment, the more SMaC you need to be. A SMaC recipe is a set of durable operating principles and practices that create a replicable and consistent success formula.

7 - ROL (RETURN ON LUCK)
10Xers weren't more lucky or unlucky than comparisons. They had better ROL because they took full advantage of good luck and minimized the effects of bad luck. If you think about it, that's the real key to luck. Knowing when you got lucky and how to take advantage of it, rather than blindly thinking you walk on water (like so many businesses do).

Like Jim's other books, the how to is what's missing. An outstanding book for that (increasing your leadership skill set) is Leadership 2.0
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70 of 77 people found the following review helpful
5.0 out of 5 stars Steady Marching Through Chaotic Times., October 11, 2011
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Jim Collins is at it again. Collins, along with co-author Morten Hansen and a team of over 20 researchers, spent roughly nine years trying to determine why some companies thrive during chaotic, uncertain and unstable times while other companies do not. If you have read some of Collins' earlier books, the theme in "Great by Choice" certainly won't surprise you. In "Built to Last," published in 1994, Collins, co-author Jerry Porras and their research team wrote about what makes for a "visionary" company, comparing a group of objectively and subjectively defined visionary companies with comparison companies that weren't so visionary. The authors would argue that their company selections were much more objectively chosen, and I wouldn't argue much with that claim. In "Good to Great," published in 2001, Collins and his research team analyzed a number of good companies that took the next step to achieve greatness, while a comparison group of similar companies did not.

In both of these two earlier books, as well in the current one (I'll get to "Great by Choice" presently), the authors conspicuously note how much better the subject companies performed, stock market wise, compared to the comparison companies. However, it is important to realize that Collins and his co-authors are not suggesting that you run out and invest in their subject companies. If you did that for the "Built to Last" companies, your investments would have included Citigroup, Ford, Sony and other companies that subsequently didn't set the world on fire. Similarly, from the "Good to Great" focus companies, Circuit City eventually filled for bankruptcy and Fannie Mae proved to be a major disappointment, in more ways than one. The point is that the reader can learn from what these companies did during their periods of success, regardless of whether some of the companies lost their way later on. Interestingly, one company, Wells Fargo, actually went from the comparison list in "Built to Last" to the focus list in "Good to Great." Okay, forewarned is forearmed regarding investing in the subject companies.

A couple of years ago Collins wrote another book, "How the Mighty Fall," which is a study of leadership failure, not success. This short book is a very enjoyable and informative read, but somewhat different from the books I mentioned above. All of Collins' books are interesting, hard to put down, and written with a passion for understanding the mechanisms of corporate success. When it comes to writing, I think of him as the Michael Lewis of management gurus. Collins is also an exceptional speaker, if you ever have the chance to hear him.

In "Great by Choice," Collins and Hansen select just seven companies (out of an initial list of over 20,000) as examples of those that have thrived during chaotic times. The companies are Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines and Stryker. These companies are called "10X" companies, given that their stock prices outdistanced the comparison companies by roughly an order of magnitude during the study period. Consider, for example, Southwest Airlines. During the study period (1970s through 2002), Southwest faced fuel price jumps, deregulation, labor problems in the airline industry, competitors moving through the revolving door of bankruptcy, and an absence of flyers in the aftermath of September 11, 2001. Still, the company consistently grew and prospered. During this time, comparison company Pacific Southwest Airlines had an entirely different experience.

So how does Collins explain the different fortunes between the subject companies and the comparison companies? Simplistically put, the great-by-choice companies were much better able to differentiate between situations and factors they could control and those they couldn't. Also, they exemplified "fanatic discipline, empirical creativity and productive paranoia." If you have read Collins' other works, these terms have a certain familiar ring to them.

This wouldn't be a Jim Collins book if it didn't coin some new expressions, like the "big, hairy, audacious goal (BHAG)" from "Built to Last" and "Level 5 leadership" from "Good to Great." This time one of the main new expressions is the "20-mile march," which Collins uses to describe the very steady progress, through good times and bad, of the companies that thrive best during chaotic times, versus those companies that make exceptional progress during better times, but perform more poorly during tough times.

There is no such thing as a management guru with perfect insight or analysis, so I am not holding Collins to that standard. The real measure of a book such as this is more in its ability to raise important questions and through sound (even passionate) discussion help stimulate the reader to come to grips with important concepts. That's how people grow. If you have read and enjoyed Collins earlier books, chance are good you will like this one, too. If you are new to Collins, but have an interest in what makes companies tick, this book--along with his earlier works--are worth your consideration.
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46 of 50 people found the following review helpful
5.0 out of 5 stars Great by Choice is the second/better half of How the Mighty Fall, October 16, 2011
By 
Mark P. McDonald (Chicago, IL United States) - See all my reviews
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Jim Collins extends and deepens the body of knowledge around the fundamentals of success. Great by Choice represents the second half of Collin's earlier book on company failure - How the Mighty Fall. While that earlier book concentrated on factors that drive failure, this describes the characteristics of sustained success.

This book is classic Collins. Well researched, clearly describes and expertly packaged for executives to incorporate these concepts into their lexicon and thoughts. This book is recommended as the capstone of the study of the fundamentals of great companies.

Great by Choice is a lot like How the Mighty Fall as it's a short, concise and focused book. About half of it is content and half is appendices, FAQs and methodology - just like HtMF. Put the two together and you get a comprehensive look at modern corporate success.

This is a book for understanding and admiring the factors Collin's points out as driving superior performance.

The book describes these factors, but description is not prescription.

This book is not a 'how to' book, nor one that provides much action oriented help. It relies on the reader understanding Collins points and then tailoring them to their situation. That places the burden of value on the reader, which is where it should be as greatness is less a recipe than a recommitment to hard work.

Great by Choice contains a set of core concepts that define the major chapters in the book. Here is a short description of each to provide an idea of what is in Great by Choice and how Collins describes the characteristics of companies that have exceptional performance, what Collins calls 10x.

20 Mile March describes the fanatic discipline that leads you to manage for the long term rather than chasing short-term results or the fade. Essentially this is the business version of the classical Greek axiom of balance and discipline.

Fire Bullets, Then Cannonballs by being empirically creative by experimenting intelligently everywhere and exploit where you know you are having success. This is more than the idea of `failing fast'. It is a definition of innovation based on the combination of creativity, discipline and data.

Leading above the death line describes the productive paranoia that was captured by Andy Grove's management mantra. This is a business version of the Boy Scout's principle of `Be Prepared.' This chapter concentrates on the success and practices of preparation and having reserves that enable you to achieve more.

SMaC describes the company's principles that are Specific, Methodolical and Consistent. This chapter in essence describes the power of common vision, direction and culture. Collins points out that SMaC is one of the more powerful ways to exert control in a dynamic world.

Return on Luck discusses how leaders and laggards face unpredictable positive and negative events. This is perhaps one of the best chapters as it describes how Collins and his team investigated the phenomenon of luck. As expected the conclusion is that luck does not play a guiding factor, rather its how you take advantage of good luck and are prepared (death line) for bad luck.

These concepts are all interrelated and go beyond the book' s triangle graphic. You cannot do a 20 mile march well without SMAC and both are worth lest without the preparation associated with leading above the death line.

Overall, I recommend Great by Choice for both fan's of Collins' work and for people who are new to this discussion. Yes this book is a continuation the prior books, but it does a great job of providing new insight without overly repeating prior points.

Great By Choice to be a good place for people to start. You do not need to read Collin's other books, but logically this book is the second half of How the Mighty Fall. I would suggest that if you are going to read both that you read HtMF first as you need to fix that first before the ideas in this book will have an effect.

Strengths

The book contains strong ideas that are simple to communicate and easy to mentally think about how they fit with your organization. Its easy to see how they would may your company a 10X performer.

The case descriptions are informative, insightful and illustrative. The cases are well worn: Southwest Airlines, Microsoft, Apple, Progressive Insurance and Intel, but well applied.

The use of mountaineering and explorers as non-business based examples will give you the stories to tell around the water cooler.

Challenges

The book provides powerful description of concepts that we already know. Rewriting Collins' points boil down to the following: have along term vision (20 miles), experiment to innovate (bullets and canon), `Be Prepared' (death line), follow your core (SMaC) and take advantage when possible (Return on Luck)

The companies featured are studied from 1977 to 2002 which was a period of significant change: the internet, oil crisis, stagflation, etc. However, historically economists have dubbed this period part of what they call the great moderation. So while these principles are timeless, they do not account for what has happened and happening now.

There is no treatment of technology in the book. Given that much of the global, collaborative and social world is driven by technology, this is a big omission.
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56 of 65 people found the following review helpful
3.0 out of 5 stars Cum Graino Salis - (to be taken with a grain of salt), October 30, 2011
'Great by Choice' is the outgrowth of nine years of research. The authors studied high-performing firms that had beat their industry index by at least 10X for at least 15 years between 12/31/1972 - 12/31/2002. The resulting list, along with their paired less successful competitors, included: Amgen (77.2X its industry, less successful competitor Genentech), Biomet (11.2X, Kirschner), Intel (46.3X, AMD), Microsoft (118.8X, Apple), Progressive Insurance (11.3X, Safeco), SouthWest Airlines - SWA (550.4X, PSA), and Stryker (10.9X, U.S. Surgical Corp.). These most successful firms did not have visionary ability to predict the future, were not necessarily more innovative nor faster moving than their comparison firms.

They were, however, paranoid. Bill Gates ('I consider failure on a regular basis') worried about competitors, technology, legal cases, customer support problems - per a 6/1991 memo, while Apple's Sculley instead took a nine week vacation in 1988, a good year for Apple. Its ROE, however, began falling from 40% in 1988 to 13% in 1994, and went negative in 1996. Similarly, they credit SWA's Kelleher with 'predicting eight of the last three recessions,' and Microsoft with keeping expenses low even in good years, in preparation for the bad years.

Another finding - 10X leaders were incredibly ambitious for their company and cause, but not themselves. The less successful comparison cases pursued much more aggressive growth and took big-leap radical change adventures to a much greater degree. So much for 'big, hairy, audacious goals - BHAG, per Collins and Porras in 'Built to Last' and 'In Search of Excellence' by Peters and Waterman. And that provides a healthy warning against literally taking the content of 'Great by Choice' and similarly books seriously.

Continuing, the most successful firms committed to high-performance, even in difficult conditions - eg. SWA pursued annual profits every year and obtained them even though the entire industry had a profit in just 6 of 14 years during 1990 - 2003. Progressive Insurance only grew at rates it could achieve with a combined ratio of 96% (losses + overhead no more than 96% of income), and did so 27 out of 30 years. Stryker committed to 20% growth in net income/year, and accomplished that 90% of the time. Intel committed to following Moore's Law (doubling the complexity of chips every 18 - 24 months), and Microsoft made continuous iterations of software products, often buggy at first and sometimes merely vaporware. Finally, Amgen pursued incremental product innovation and extending existing products to new treatments. The authors also contend that the most successful pursued steady growth, not big bang leaps. SWA expanded slowly - four new cities in 1996, out of the 100 or so requesting SWA to enter, and took eight years just to expand outside Texas. Similarly, Intel limited its growth between 1981 - 1984, allowing AMD to gain ground; then came the 1985 recession, and AMD's rapid debt growth made it unable to recover quickly enough to again challenge Intel.

The preceding is credible, especially the overly-subdued warning about excess debt; however, the 'finding' is not infallible nor always easy to recognize in practice. For example, the drug industry has a dark reputation for minor molecule manipulation to extend patent lives and fend off generics, managing research findings to give the appearance of greater value than reality merits, and trying to skate around FDA marketing limitations. Sometimes this suffices, other times not. Intel would not have succeeded to the degree it did had it not first gotten out of the overly competitive memory market it began in. New businesses in China repeatedly leap to the forefront through fast growth and maximizing scale economies. And SWA would not have succeeded to the degree it did without also bringing a radically new business model to a senescent industry. Thus, a second warning against taking 'Great by Choice' too literally.

And what about Apple? The butt of Collins' comparison vs. Microsoft, it has since become the world's most valuable company! Yet, Jobs' focus was on implementing product innovation, simplification and superb aesthetics - always immediately or within seeming impossible time-frames, and never on steady financial, product development, or growth. Microsoft, during this more recent time period, despite its paranoia fell behind as it missed out on the social media craze, seriously lagged Google in Internet search, and was a clunky also-ran vs. Apple in phones, pads, and music. Then there's Facebook - suddenly appearing out of nowhere and without any business plan, now seriously threatening Google's advertising revenues. Oops - that would be the third warning.

Genentech outpaced Amgen in patent productivity by > 2X and was named by 'Science' magazine as having an unmatched record in the industry for creating major new breakthroughs. Overall, the authors found 3 instances where 10X firms were more innovative and 4 where their less successful competitors were. They concluded that the 10X companies were not more innovative than their counterparts; that conclusion, however, would never pass any valid test of statistical validity, nor most people's test of common sense validity. Thus, a fourth reason not to take their conclusions literally.

Bottom-Line: 'Great by Choice' has some good material for leaders to be aware of; however, they should not make it their only diet.
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9 of 10 people found the following review helpful
5.0 out of 5 stars Additional and even more valuable revelations about "the principles that distinguish great organizations from good ones", October 11, 2011
For as long as I can remember, Jim Collins has been a research-driven business thinker. In each of his prior books, he and his associates (usually Morten Hansen among them) share what was revealed during many years of research to learn the answer to an especially important question. For Built to Last, it was "Why are some companies able to achieve and sustain success through multiple generations of leaders, across decades and even centuries?"; in Good to Great, "Why do some companies make the leap from good to great... and others don't?"; then in How the Might Fall, "How and why do some once great companies fall and other companies never give in to the same challenges, problems, and setbacks?"; and now in Great by Choice, "Why do some companies thrive in uncertainty, even chaos, and others do not?"

Collins, Hansen, and their colleagues conducted a nine-year study (2002-2011) and share what they learned. Here are the findings that caught my eye:

1. For reasons best revealed within the book's narrative, in context, some companies and leaders thrive in chaos. Those on whom the book focuses have out-performed their industry's index by at least 10 times and (key point) under the same extreme conditions with which others in the same industry must also contend.

2. Characterized as "10X" companies, those selected were paired in a "near-perfect match" -- for purposes of both comparison and contrast - with companies during "eras of dynastic performance that ended in 2002, not the companies as they are today. It's entirely possible that by the time you read these words, one or two of the companies on the list [i.e. Amgen, Biomet, Intel, Microsoft, Progressive Insurance, Southwest Airlines, and Stryker] has stumbled, falling from greatness."

3. The research invalidates well-entrenched myths (see Pages 9-10) with regard to the 10X companies and their leaders. For example, "the evidence does not support the premise that 10X companies will necessarily be more innovative than their less successful comparisons [during the same timeframe]; and in some cases, the 10X cases were [begin italics] less [end italics] innovative."

4. Leaders of 10X companies display three core behaviors that, in combination, distinguish them from the leaders of less successful comparison companies. They also call to mind the behaviors of Level 5 leadership, examined in detail in Good to Great. Specifically, 10Xers exemplify fanatic discipline ("utterly relentless, monomaniacal, unbending in their focus on their quests"), empirical creativity (reliance on "direct observation, practical experimentation, and direct engagement with tangible evidence"), and productive paranoia (channeling their fear and worry into action, preparing, developing contingency plans, building buffers, and maintaining large margins of safety").

5. In the Epilogue, Collins and his associates acknowledge their sense that "a dangerous disease" is infecting today's culture, one that incorrectly suggests that greatness "owes more to circumstance, even luck, than to action and discipline." Yes, they agree, good or bad luck plays a role for everyone, including 10Xers and Level Fivers. However, they offer an eloquent reassurance that many of us need to hear: "The greatest leaders we've studied throughout all our research cared as much about values as victory, as much about purpose as profit. As much about being useful as being successful. Their drive and stamina are ultimately internal, rising from where deep inside."

Organizations do not make choices, their leaders do, and the fate of each of those organizations depends on the quality of the choices its leaders make, especially amidst uncertainty, chaos, and luck...three realities that even the best leaders can only manage rather than control. That is the challenge but also the opportunity to which the book's title refers. The single most important difference between the 10X companies that Collins and Hansen discuss and those with which they are compared/contrasted is that those who lead them make better choices as they build and then sustain a culture within which everyone else does.
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11 of 13 people found the following review helpful
2.0 out of 5 stars Resting on laurels of "Good to Great", December 6, 2011
By 
Morgan Hua (Sunnyvale, CA) - See all my reviews
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It's really 183 pages (the rest is just research notes). The whole book is summarized on page 175. There's some interesting anecdotes and the ideas make sense, but this is a very slight (as in not very deep) book. What makes a company great is that they do deep analysis of the business, prepare, take advantage of success without endangering the company, re-evaluate periodically, and work steadily for success, making adjustments if necessary.
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4 of 4 people found the following review helpful
4.0 out of 5 stars Informative read, role of disruptive trends under-covered, November 3, 2011
By 
This is by all accounts, a worthy follower to the previous books, Good to Great: Why Some Companies Make the Leap... and Others Don'tand How The Mighty Fall: And Why Some Companies Never Give In. However, a key issue in this book (and the earlier ones) is that prescribing the granularity for a trait or characteristic - whether it is of a leader or an organization is still elusive - and the limits of retrospective analysis are evident. One would benefit more if a particular dataset is chosen to develop a descriptor model - a learning dataset...and then apply the findings to another dataset - to see how well that theory holds up. Depending primarily on the stock market returns where the vagaries of multiple expansion/compression depending on which sector is deemed "hot" can skew results even within a sector. Moreover, the three 10X cases from healthcare may have very unique issues that are difficult to characterize (drug discovery certainly depends on luck). It is infact the treatment of the role of luck in one of the later chapters that is a clear standout in this book. The counterintuitive nature of how innovative a 10X company should be also is interesting - but perhaps limited in its generality due to lack of a clear theory supporting them - for example, will any of the analysis change if a "evolutionary analysis" or those based on Christensen's theories change the findings (here again, the dependence on stock performance is at best an incomplete representation).

Nevertheless, the book provides excellent thought framework for both business model analysts and leaders and can raise interesting questions - that in itself is well worth the read. Almost half the book is "Research foundations", that provide detailed instruments and background of the research. The summary notes for each chapter is also a welcome feature. A good read, but one should manage the expectations with respect to being able to define a prescriptive model.
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9 of 11 people found the following review helpful
1.0 out of 5 stars Great By Choice, read it if you have no other choice..., September 20, 2012
Simply put, I agree with a previous reviewer who said they must have had a lot of leftover material and decided to pump out another book. Painfully obvious in the gist of their arguments, repetitive, and void of anything new, the book fell flat for me. There's much better material out there, even by the same authors as this dull little book. (I'm convinced that certain authors are getting an automatic positive review just because people don't want to point out how bad some of their writings are. Or how they seem to get beyond some good ideas and try to sell another "We've got something new here folks!" book with all the hype machine behind it.)
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14 of 18 people found the following review helpful
1.0 out of 5 stars If you love Jim Collins, skip this book and just re-read Good to Great, July 13, 2012
As a business owner, I did not feel like he drew accurate conclusions based on the evidence and anecdotes that he provided.

I love Jim Collins and have read his earlier books more than once, but this book was a disappointment.

It was like he had extra research (including some very good and inspirational stories) leftover from his previous books that he didn't want to go to waste, and so he created concepts out of thin air in order to tie them together.
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19 of 25 people found the following review helpful
1.0 out of 5 stars Tedious Read, January 6, 2012
By 
I found Great by Choice to be a tedious read. There is so much repetition that it is obviously an attempt to fluff up the word count to justify a minimum price.
I have been in the semiconductor business for 35 years, I found their comparison between Intel and AMD prety much gibberish.
Half way through I threw the book away.
Save your money.
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Great by Choice CD by Jim Collins (Audio CD - October 11, 2011)
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