Built to Last: Successful Habits of Visionary Companies
From BookJive
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| Author: | Jim Collins, Jerry Porras |
| Publisher: | Harper Collins Publication |
| Published: | |
| Pages: | 332 |
| ISBN-10: | 60516402 |
| Category: | Array |
[edit] Summary
Whether you are just starting a company or attempting to revitalize the fundamental foundations and business practices of an existing company, Built to Last: Successful Habits of Visionary Companies, by Jim Collins and Jerry Porras will be unerringly helpful. Built to Last is a compilation of the results of a six year study of eighteen of America’s most enduring companies and their relationships with their own “market” competitor. These eighteen companies and their competitors are:
- 3M vs. Norton
- American Express vs. Wells Fargo
- Boeing vs. McDonnell Douglas
- Citicorp vs. Chase Manhattan
- Ford vs. GM
- General Electric vs. Westinghouse
- Hewlett Packard vs. Texas Instruments
- IBM vs. Burroughs
- Johnson & Johnson vs. Bristol Myers Squibb
- Marriott vs. Howard Johnson
- Merck vs. Pfizer
- Motorola vs. Zenith
- Nordstrom vs. Melville
- Philip Morris vs. RJR Nabisco
- Procter & Gamble vs. Colgate
- Sony vs. Kenwood
- Wal-Mart vs. Ames
- Walt Disney vs. Columbia
According to Collins and Porras, a visionary company can be neither founded on a single great idea nor rely on an individual charismatic leader. A visionary company must be willing and able to put the organization first in order to stand the test of time. It is essential in any visionary company to make a statement of what the company stands for and why it exists – its core ideology consisting of its core values and core purpose. A plan of action to drive progress toward an envisioned future accompanies this statement of core ideology.
The key concept of this book is preserving an organization’s core ideologies while stimulating progress within that organization. Change in an organization is constant with respect to everything but the organization’s core ideology. A visionary organization can stimulate progress in a number of ways--from setting BHAGs (Big Hairy Audacious Goals), to creating and promoting a cult-like culture within the organization, to trying many things and keeping what works, and finally, to relying on homegrown management.
By examining the founding and history of these companies, the ways in which they have handled both adversity and success, and their continued commitment to their corporate identity, Collins and Porras reveal the necessary steps any organization can take toward becoming a visionary company. In seven timeless principles, they provide the key concepts that are crucial to understanding what makes a visionary company truly visionary and enduring.
[edit] First Principle: Be Clock Builders Not Time-Tellers
Clock builders concentrate on strengthening the organization to stand the test of time one resolute step at a time, like a ticking clock. Their leaders are focused on designing an enduring institution rather than on building themselves into larger than life, individual, high-profile, charismatic leaders. These companies did certain things differently from their competitors, things that in large part were more about the inside than the outside and had little to do with technology or number crunching. Among these differences were "cult-like cultures", adhering to principles that went beyond the simple search of profits, relying on homegrown management; and focusing on creating a lasting organization.
Creating and building visionary companies doed not require great ideas. Most of the successful companies such as Sony, Procter and Gamble, and 3M, started without a specific product idea.
[edit] The Second Principle: Embrace the”And” Reject the “Or”
Visionary companies have the unique capability to successfully manage two extreme and divided paradoxes. Winning companies search for ideas to do well in the short-term and very well in the long-term. Others hold the tension between profit and mission beyond profit.
[edit] The Third Principle: Visionary Companies are More Than a Profit
Visionary Companies exist not only to make money, but to be guided by their core ideology, core values, and their sense of purpose and mission. Visionary companies make more money than the purely profit driven comparison companies.
[edit] The Fourth Principle: Visionary Companies Walk the Talk
Visionary companies observe the following when institutionalizing their core ideology:
- Visionary companies routinely and publicly espouse and articulate their core ideology.
- Visionary companies make the ideology pervasive throughout the company by indoctrinating and creating cultures around the ideology; by choosing leadership and management that role-model the ideology; and by seeking alignment of functional goals, strategies, and organization design around the core ideology.
- Visionary companies understand that a core ideology is the summation of the organization's essential and enduring tenets that will never be compromised for financial gains or short-term objectives.
[edit] The Fifth Principle: Preserve the Core Ideology While Stimulating Progress
Visionary companies are willing to change everything except the core ideology. Core ideology and an unyielding desire for growth in a visionary company works hand-in-hand. To preserve the core ideology and stimulate progress at the same time:
1. Produce a clear and compelling BHAG (Big, hairy, audacious goal). A BHAG is a goal, not a statement. A BHAG must be so bold and exciting that it continues to motivate development. Finally, a BHAG should be compatible with a company's core ideology.
2. Make cult-like cultures. Visionary companies are very transparent about what they stand for, what they want to achieve, and who they want to achieve it. They do not have room for those who are not eager to participate or those whose culture, attitude, or exacting standards hinder their ability to fully participate. Visionary companies have cult-like behaviors that they strongly exhibit.
- Passionately held Ideology: Excellent Costumer Service
- Indoctrination: Application of heroic stories, chanting affirmations and cheers
- Tightness of fit: Employers/employees that are well aquainted with the company and its ideology.
- Exclusiveness creates a sense of belonging to something special/superior.
3. Try many things and keep what works. Visionary companies tolerate experimentation, trial and error, and accidental discovery. The product that produces the best result will go beyond the process and not necessarily through strategic planning.
4. Build Homegrown Management. Visionary companies believe in promoting from within, promoting to senior levels only those employees who have, through experience, a thorough understanding of the company’s core ideology. This ensures the preservation of the core ideology and debunks the myth that significant change and fresh ideas can only come from outside the company.
The guiding principle is to invest in management development processes and long-range succession planning to ensure a smooth transition between one generation and the next. Key to this practice is encouraging insiders who are proficient in stimulating healthy change and progress while preserving the core.
5. Good enough never is. In a visionary company, good enough never is. There is never an end to the movement for continual progress, and every member in the organization is a key player encouraged to take personal initiative. A visionary company is a great place to work if, and only if, you strongly agree and adhere to its values and purpose.
[edit] The Sixth Principle: Recognize That Being a Visionary Company Is a Never- Ending Process
Six guideposts to being a visionary company:
1. Paint the whole picture A visionary company is like a great work of art. It is all the pieces that work together to create an overall effect that leads to enduring greatness. It is in the detail.
2. Sweat the small stuff Pay attention to little things and the nitty-gritty details of the company and the business. It is the little things that make a big impression and send powerful signals.
3. Cluster, don't shotgun Put in place pieces and details that reinforce each other to deliver a powerful punch.
4. Swim in your current even if you swim against the tide Be true to the company's self-defined ideology even if it flies in the face of conventional business practices.
5. Obliterate misalignments Identify and correct misalignments that push the company away from its core ideology or hamper progress.
6. Keep the universal requirements while investing in new methods A company must have a core ideology to become visionary. It must have an unrelenting drive for progress while preserving the organization’s core ideologies.
[edit] The Seventh Principle: Build the Vision
Visionary companies build their vision based on core ideology and an envisioned future. To preserve the vision means that these organizations create organizational and strategic alignment to preserve the core ideology and stimulate progress towards the envisioned future.
The elements of core Ideology are core values and core purpose. Core values are the visionary company's timeless guiding principle that has intrinsic value and importance to those in the organization. Core purpose is the organization's fundamental, deeper reason for being—a reason above and beyond making money.
[edit] Understanding Core Ideology and Core Purpose:
- It is not created or set but discovered by looking inside.
- It must be honest and authentic.
- It must guide and inspire, not differentiate.
- It must be meaningful and inspiring to people inside the organization, even if it is not exciting to outsiders.
- Core ideology cannot be crammed down into people's throats. They must have a natural predisposition toward it.
- Core values and purpose are not the results of a word-smithing exercise. A company can have a strong core ideology permeating within the organization yet lack a final statement.
- Core ideology is not synonymous to core competence. Core competence refers to the organization's capabilities in specific areas while core ideology captures why the company exists.
Filled with hundreds of specific examples and organized into a coherent framework of practical concepts that can be applied by managers and entrepreneurs at all levels, Built to Last provides a master blueprint for building organizations that will prosper long into the twenty-first century and beyond.
