Built to Last: Successful Habits of Visionary Companies

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  Built to Last – Jim Collins

  Jim Collins and Jerry Poras undertook a project to find out what made visionary companies great and enduring. They did this by looking at ‘matched pairs’ of companies (ie founded in the same era, facing the same demographics, technology shifts and socioeconomic trends) that had existed from five to fifteen decades. The following categories were tracked across each company from their founding date to 1991:
  • Organising arrangements: org structure, systems – polic... (show more)

  Built to Last – Jim Collins

  Jim Collins and Jerry Poras undertook a project to find out what made visionary companies great and enduring. They did this by looking at ‘matched pairs’ of companies (ie founded in the same era, facing the same demographics, technology shifts and socioeconomic trends) that had existed from five to fifteen decades. The following categories were tracked across each company from their founding date to 1991:
  • Organising arrangements: org structure, systems – policies and procedures
  • Social factors: culture and management style
  • Physical setting: plant and office layouts, geographic location/s
  • Technology: how the company used technology
  • Leadership: leadership and inception and how it was transferred
  • Products and Services: how significant products/services were developed
  • Vision, values, purpose and visionary goals
  • Financial analysis
  • Market and environment

  Visionary companies included American Express, Boeing, Citicorp,
  Ford, GE, HP, IBM, Johnson&Johnson, Marriot, Merck, Motorola, Proctor & Gamble, Sony, Wal-Mart, Walt Disney. They were seen as visionary because of the enduring nature and extraordinary ratio of stock returns to the general market.

  The results of the project purport to shatter 12 myths about visionary companies:
  1. it takes a great idea to start a company – few visionary companies started with a great idea – they often get off to a slow start
  2. great charismatic leaders are required – found to be detrimental to long term progress; charismatic leaders found to be more self focused than organisation focused
  3. profit is the primary aim – visionary companies tend to have a cluster of objectives of which profit is one or seen as a means to an end rather than the end itself
  4. have a common set of core values – no ‘right’ set of values identified – the differentiator is the extent that the company lives and breathes their values
  5. the only constant is change – visionary companies explore opportunities and new methods but have kept their core ideology constant
  6. blue chip companies play it safe – while visionary companies may appear conservative to outsiders, they tend to have audacious goals
  7. visionary companies are a great place to work for everyone – tend to only be good places for people who fit the specific culture
  8. highly successful companies make their best moves through brilliant and complex strategic planning – some of the best moves come through experimentation and opportunism
  9. companies should hire outside CEOs to stimulate fundamental change – visionary companies developed their own managers and were able to keep to their core ideology by promoting from within
  10. most successful companies focus primarily on beating the competition – found that visionary companies focus primarily on beating themselves
  11. you can’t have your cake and eat it too – found that visionary companies will seek to have A AND B objectives rather than A OR B objectives
  12. Companies become visionary through their vision statements – found that vision was now a given for most businesses

  The project found that visionary companies all had common guiding intangibles of:
  • A view to build the company rather than just operate it (‘Clock building rather than telling the time’)
  • A view to seek A AND B objectives rather than always making trade-offs
  • Core ideology that drove the company
  • A continual drive for progress

  These companies operationalised these intangibles through mechanisms to preserve their core ideology AND stimulate progress:
  • Big Hairy Audacious Goals
  • Cult-like cultures
  • Trying a lot of things and keeping what works
  • Home-grown management to preserve the core ideology
  • Never accepting ‘good’ as enough – institutionalised and disciplined continual self-improvement

  The book relates these findings to the visionary and comparison companies to highlight the results of the research. While the book is written after Good to Great, it is really its sequel.

  The book was easy to read and convincing albeit some of the visionary companies have faltered with the Global Financial Crisis. (show less)

   

   

  by Glen Babington on Apr 12, 2009 at 08:15AM

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  If your intent is to build a successful organisation, fueled with passions that extend beyond profits, there's a lot inspiration to be had here.

   

  by Facebook User on Jul 20, 2008 at 12:15PM

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