You need a big idea to build a lasting company. FALSE, just a few of these companies were based on a grand vision; some were made without any specific thought. Visionary companies need visionary leaders of impressive height and very charismatic. FALSE, the charismatic leader’s image is useless in innovative companies. Visionary companies are dream workspaces. FALSE, a particular employee model works in these companies, and not everyone fits their central ideology.
Built to Last. Successful Habits of Visionary companies [Jim Collins & Jerry I. Porras, 2006]
Jim Collins and Jerry I. Porras, business teachers at Stanford University, make their case in their book, proving that all the above are myths. But, the authors don’t stop destroying these common myths; the whole book is going in that direction.
The book is the result of thorough research over about 6 years; the team studied over 60.000 pages of documents regarding 36 companies (18 visionaries and 18 comparison companies) to find those characteristics that help a company become a market leader and last among the top companies even more than 100 years. The research methodology is explained in detail, including the conclusions’ pros and cons.
How do you build a company such as 3M, American Express, Boeing, Citicorp, Ford, General Electric, Hewlett-Packard, IBM, Johnson & Johnson, Marriott, Motorola, Nordstrom, Philip Morris, Procter & Gamble, Sony, Wall-Mart or Walt Disney so that they last over centuries?
Emphasizing that the results of the research are not a “recipe for success”, Collins & Porras explain the common traits of these companies that make them stand out and supports their performance over the years:
As Darwin’s evolutionary theory, these companies followed a fundamental evolution process to reach the level where they are today; they didn’t show up overnight:
- No “or”, embrace the genius of “and”: the fundamental principles do not exclude each other, they coexist, there is change and stability, cost reduction and high quality, you can create wealth for the shareholders and do good to humanity
- These companies didn’t have a fundamental goal only to build wealth; their objectives were above it, be it technological evolution of innovation (3M) or finding remedies for incurable diseases (Merk); these objectives subsist in the ideology of the company and in the core values but also in all the components of the company (going down to job descriptions)
- Maintaining the company’s core values and the reason for its existence coexists in harmony with progress stimulation and a continuous fight for comfort and stability.
- Big Hairy Audacious Goals: dream to reach far, even if it seems impossible
- A cult-like culture: visionary companies build a cult-like culture based on their core ideology; they promote accurate and complete brainwashing of their employees
- They are audacious companies, not afraid to try many things and keep only what works; for example, the famous 3M post-it was invented by mistake, their further development being possible as a consequence of one core value of the company – innovation
- They built their own management inside the company: out of the 113 CEOs of the visionary companies, only 3.5% came from outside of the company. Jack Welch, the famous CEO that transformed GE, went to the company straight from the university
- It’s never good enough: reaching one objective opens the door for another, just as important as the former or even more critical, visionary companies are always on the move.
” Built to Last” is a classic strategy book with no expiration date; none of the principles presented is obsolete. They can easily be applied to businesses, regardless of size, position or market. At the same time, the book offers a different approach to management theory; it destroyed acclaimed business myths bringing timeless, invincible arguments. In conclusion, reading this book is highly catchy, as it is spiced up with case studies from famous companies or products: if you ever were curious to discover how the scotch stick tape or the post-it were invented, you can find out here.
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