Collins, Built to Last

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Jim Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies. Collins Business, 2004.

Sequel: Jim Collins, Good to Great

Referenced in:

LifeandLeadership.com Summary

This is an interesting expression of the transformational and empowering approaches to leadership with an emphasis on core ideology, deep beliefs in that ideology, BHAGs, experimenting and keeping what works, etc. Interestingly, it is not a focus on visionary leaders but visionary companies (see the sequel, Good to Great, for a discussion of the kind of leaders found in these companies).

The authors study 18 visionary companies, most of which are household names, and a control group of successful-but-second-rank business in the same field (e.g. Disney vs. Columbia Pictures). They sought patterns within and between these companies, and discovered twelve “shattered” myths as well as guiding principles of how successful companies remain that way. Chapter 1 presents the contrasts between myths and realities:

Myth #1: It takes a great idea to start a company. Reality: Few of the visionary companies began with a great idea. Many companies started without any specific ideas (HP and Sony) and others were outright failures (3M).

Myth #2: Visionary companies require great and charismatic visionary leaders. Reality: A charismatic leader in not required and, in fact, can be detrimental to a company’s long-term prospects.

Myth #3: The most successful companies exist first and foremost to maximize profits. Reality: They do seek profits, but are guided by a core ideology – core values and a sense of purpose beyond just making money.

Myth #4: Visionary companies share a common subset of “correct” core values. Reality: There is no “right” set of core values. The crucial variable is not the content of the values, but how deeply it believes its core ideology and how consistently it lives it. The core values can and often do last more then 100 years.

Myth #5: The only constant is change. Reality: A visionary company almost religiously preserves its core ideology – changing it seldom, if ever.

Myth #6: Blue-chip companies play it safe. Reality: They may appear conservative, but they are not afraid to make bold commitments to Big-Hairy-Audacious-Goals (BHAG’s).

Myth #7: Visionary companies are great places to work, for everyone. Reality: Only those who fit the core ideology and demanding standards enjoy working at these companies. If you fit, you flourish, if you don’t, you are expunged like a virus.

Myth #8: Highly successful companies make some of their best moves by brilliant and complex strategic planning. Reality: What looks in retrospect like brilliant foresight and preplanning was often the result of “Let’s just try a lot of stuff and keep what works.”

Myth #9: Companies should hire outside CEOs to stimulate fundamental change. Reality: In over seventeen hundred years of combined life spans of the visionary companies, there were only four occurrences of going outside for a CEO – and those only in two companies. Most have had their change agents come from within the system.

Myth #10: The most successful companies focus primarily on beating the competition. Reality: Visionary companies focus primarily on beating themselves.

Myth #11: You can’t have your cake and eat it too. Reality: Visionaries don’t brutalize themselves with the “Tyranny of the OR” (e.g. stability OR progress, making money OR living according to values) but embrace the “Genius of the AND,” pursuing both values at the same time.

Myth #12: Companies become visionary primarily through “vision statements.” Reality: Many do write such statements, but only as a small step among thousands of steps.

The remaining chapters discuss some of the reality principles in greater detail. It includes discussions on issues such as making core values and ideology, BHAGs, “cult-like” cultures, experimenting and keeping what works, hiring top management from inside, and constant innovation.

The value for church leaders comes more in the dispelling of the myths. The danger lies in assuming the book lays out the path to excellence or in using the myths vs. realities as justification for mediocrity (Yay! We don’t have to do strategic planning, or values, or change…”). Readers should keep in mind the companies studied did many things very intentionally and with excellence. For example, concerning hiring top management from within. Many megachurches do the same thing, but only after having established a highly effective way of doing things that only those who have lived in it as members can carry on as staff ministers. The same rule would not apply for an ineffective church that simply wants to hire an elder’s favorite niece to be the children’s minister and claims an uninformed use of Collins and Porras’ list as justification. So read the book, but use it wisely.

From the Publisher

“This is not a book about charismatic visionary leaders. It is not about visionary product concepts or visionary products or visionary market insights. Nor is it about just having a corporate vision. This is a book about something far more important, enduring, and substantial. This is a book about visionary companies.” So write Jim Collins and Jerry Porras in this groundbreaking book that shatters myths, provides new insights, and gives practical guidance to those who would like to build landmark companies that stand the test of time.

Drawing upon a six-year research project at the Stanford University Graduate School of Business, Collins and Porras took eighteen truly exceptional and long-lasting companies — they have an average age of nearly one hundred years and have outperformed the general stock market by a factor of fifteen since 1926 — and studied each company in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day — as start-ups, as midsize companies, and as large corporations. Throughout, the authors asked: “What makes the truly exceptional companies different from other companies?” What separates General Electric, 3M, Merck, Wal-Mart, Hewlett-Packard, Walt Disney, and Philip Morris from their rivals? How, for example, did Procter & Gamble, which began life substantially behind rival Colgate, eventually prevail as the premier institution in its industry? How was Motorola able to move from a humble battery repair business into integrated circuits and cellular communications, while Zenith never became dominant in anything other than TVs? How did Boeing unseat McDonnell Douglas as the world’s best commercial aircraft company — what did Boeing have that McDonnell Douglas lacked?

By answering such questions, Collins and Porras go beyond the incessant barrage of management buzzwords and fads of the day to discover timeless qualities that have consistently distinguished out-standing companies. They also provide inspiration to all executives and entrepreneurs by destroying the false but widely accepted idea that only charismatic visionary leaders can build visionary companies.

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.

About the Author

Jim Collins is a student and teacher of enduring great companies — how they grow, how they attain superior performance, and how good companies can become great companies. Having invested over a decade of research into the topic, Jim has co-authored three books, including the classic Built to Last, a fixture on the Business Week bestseller list for more than five years, generating over 70 printings and translations into 16 languages. His work has been featured in Fortune, The Economist, Business Week, USA Today, Industry Week, Inc., Harvard Business Review and Fast Company.

Driven by a relentless curiosity, Jim began his research and teaching career on the faculty at Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992.In 1995, he founded a management laboratory in Boulder, Colorado, where he now conducts multi-year research projects and works with executives from the private, public, and social sectors.

Jim has served as a teacher to senior executives and CEOs at corporations that include: Starbucks Coffee, Merck, Patagonia, American General, W.L. Gore, and hundreds more. He has also worked with the non-corporate sector such as the Leadership Network of Churches, Johns Hopkins Medical School, the Boys & Girls Clubs of America and The Peter F. Drucker Foundation for Non-Profit Management.

Jim invests a significant portion of his energy in large-scale research projects — often five or more years in duration — to develop fundamental insights and then translate those findings into books, articles and lectures. He uses his management laboratory to work directly with executives and to develop practical tools for applying the concepts that flow from his research.

In addition, Jim is an avid rock climber and has made free ascents of the West Face of El Capitan and the East Face of Washington Column in Yosemite Valley.


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