Built to Last: Successful Habits Of Visionary Companies, by James C. Collins & Jerry I. Porras
The authors begin by describing their methodology in selecting visionary companies and also demonstrating that these companies have produced superior returns on equity to both comparison companies as well as the general market. The remainder of the book focuses on the successful habits.
1. Clock building, not time telling: Visionary leaders focus on building organizations that can repeatedly accomplish great things, not just on building one great product or letting the success of the organization be dependent upon their charisma.
2. No tyranny of the “or.” Embrace the genius of the “and.” Visionary companies do not accept the notion of having to balance their interests, such as long vs. short term or low cost vs. high quality. Instead, they take a yin-yang-type approach, accepting and embracing the paradox and still functioning at a highly effective level.
3. More than profits. Visionary companies don’t see the need to make a choice between making money and upholding their values, whatever they may be: customers, employees, products, innovation, risk taking. They see it as a challenge to find pragmatic solutions to their purpose while behaving within their core values. …And their purpose is more than profits.
4. Preserve the core; stimulate progress. Visionary companies are willing to sacrifice everything about themselves except their core values. At the same time, they feed their employees’ primal drive for progress, to do constructive things which accomplish their purpose. The authors believe this paradoxical concept is the most important one in the book. The next five chapters are depictions of various methods of preserving the core while stimulating progress.
5. Big, hairy audacious goals (BHAG’s). BHAG’s are mechanisms used to stimulate progress. They are clear and compelling. People “get it” right away. Ford’s goal to democratize the automobile in 1907; Boeing’s goal to make the 747; GE’s goal to be #1 or #2 in all its markets. The goal becomes peoples’ motivation, not the leader (Kennedy and going to the moon).
6. Cult-like cultures. Visionary companies know the who they are and everyone knows and embraces their goals and methods. “Motorolans, IBMers, HPers, Nordies.” People either fit or they don’t and the visionary companies eject those who don’t fit like a virus.
7. Try a lot of stuff and keep what works. Visionary companies realize that they can only achieve progress if are trying new things that are related to the core values and unafraid of failing. The process isn’t always rational. Visionary companies are constantly branching (trying new things; building multiple opportunities) and pruning (cutting out the deadwood). Listen inside.
8. Home-grown management. In succession decisions, visionary companies preserve not only quality of management, but also continuity of core values and purpose. Change and fresh ideas continually come from inside the company. An outsider isn’t needed. Continual rejuvenation.
9. Good enough never is. Continuous improvement is institutionalized. Visionary companies create internal discomfort to obliterate complacency. HP and Nordstrom both rank their employees, from top to bottom. Boeing assigns managers the task of developing a strategy as if they were going to compete with Boeing. Comfort is not the corporate objective and everyone knows it.
10. The end of the beginning. Creating a vision statement doesn’t make your company visionary. Instead, visionary companies are continually redefining themselves and “aligning” themselves to their vision. Vision is the combination of their core values with their planned future progress. Visionary companies align themselves by acting in the smallest of ways which are consistent with their vision.
