You need a big idea to build a lasting company. FALSE, just a very few of these companies were based on a grand idea, in fact some of them were built without any specific idea. The visionary companies need visionary leaders, of an impressive height and very charismatic. FALSE, the image of the charismatic leader is actually useless in visionary companies. The visionary companies are dream work spaces. FALSE, there is a certain employee model that works in these companies, not everyone fits their main ideology.
Built to Last. Successful Habits of Visionary companies [Jim Collins & Jerry I. Porras, 2006]
Jim Collins and Jerry I. Porras, business teachers of Stanford University, make their case in their book proving that all the above are nothing but myths. The authors don’t stop at destroying just these regular myths, the whole book is going in that direction.
The book is the result of a thorough research for about 6 years, the team studying over 60.000 pages of documents regarding 36 companies (18 visionary and 18 comparison companies), with the objective of finding those characteristics that help a company become market leader and last among the top companies even more than 100 years. The research methodology is explained in detail, including even pros’ and cons’ regarding the conclusions reached.
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 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 over night
- 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 as 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 core values of the company, the reason for its existence coexists in harmony with progress stimulation and a continuous fight with comfort and stability
- Big Hairy Audacious Goals: dream to reach far, even if it seems impossible
- A cult-like culture: the visionary companies build cult-like culture based on their core ideology, they promote a true 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 CEO’s of the visionary companies, only 3.5% came from outside of the company. Jack Welch, the famous CEO that transformed GE came to the company straight from university
- It’s never good enough: reaching one objective opens the door for another one, just as important as the former or even more important, the 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 – and should – be easily applied to business today, no matter of its size, position or market. At the same time the book presents a different approach of the management theory, it destroyed business acclaimedmyths bringing timeless, invincible arguments. As a conclusion, reading this book is extremely catchy, being spiced up with case studies from famous companies or products: if you ever were curious to find out how the scotch stick tape or the post-it were invented, you can find out here.