Customer Reviews

Built To Last: Successful Habits Of Visionary Companies

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"Built to Last" is one of those rare non-fiction books you just can't put down. Unequivocally the best "business" book I have ever read, "Built to Last" by James C. Collins and Jerry I. Porras is a compelling, thorough, well-written, unprecedented look at what it takes to "create and achieve long-lasting greatness as a visionary corporation." Unlike many current "trendy" management and "business success" books out on the market, Collins and Porras differentiate "Built to Last" by using their own six-year comprehensive, well-documented research study as the basis for further analysis.

What separates "Built to Last" is that each visionary company (3M, HP, Procter & Gamble, Wal-Mart...) is contrasted with a comparison company founded in the same time, in the same industry, with similar founding products and markets (Norton, TI, Colgate, Ames...). Perhaps what I found most intriguing were some of the twelve "shattered myths" they go on to counter throughout the book:

1. It takes a great idea to start a great company
2. Visionary companies require great and charismatic visionary leaders
3. Visionary companies share a common subset of "correct" core values
4. Highly successful companies make their best moves by brilliant and complex strategic planning
5. The most successful companies focus primarily on beating the competition

As a current business student with a summer internship in a "visionary company," I was amazed as their careful analysis rang true. This is one book I can highly recommend to any student, professional, or business educator looking for those not-so-subtle traits that characterize a truly visionary company.

As I dutifully plow through the currently popular business books - and I read only the ones that I need rather than for pleasure - I occasionally find a good and (fairly) interesting one. This is one of those books I would recommend. Instead of overflowing with ridiculously florid rhetoric about recycled banalities and excitement that is simply not justified, this book is based on solid research and is not afraid to offer un-spectacular advice.

It is about what the authors call "visionary companies," which stand for something beyond just making money and yet are profitable. They do well, and they do good. There is no doubt that such companies exist, which I admit in spite of my boredom and cynicism regarding most of the businessmen and "business intellectuals" that I deal with as a writer.

Set up like an academic study, the book is a synthesis of the authors' findings while taking a long historical view of consistently excellent (i.e. "visionary") companies like H-P, Merck, and P&G.

Not surprisingly, these companies do similar things: 1) they have visions and value that they try to uphold consistently throughout the company and to which they stay true over decades; 2) the set incredibly ambitious (and in retrospect realistic) goals that inspire their employees ("big hairy ambitious goals"); 3) they are cult-like in their beliefs in themselves; 4) they allow for trial and error, which lead to "evolutionary progress"; 5) they hire leadership from within; 6) they cultivate keeping their employees a bit off-balance ("uncomfortable") as a way of getting them to perform at their best; 7) they make sure that all elements work in concert and are internally consistent and self-reinforcing ("alignment").

That is it for the ideas, which are far more nuanced than the above paragraph. They could be summarized in one chapter, and the rest of the book is repetition and analysis by example. The examples are interesting and informative and the ideas, which have all been said before, are good to review in a systematic way. Very good.

These are good and useful ideas, if somewhat banal. But then, doing business is rather dull for the most part - there are very few exciting companies out there, but most of them are like horribly dysfunctional families. This is the authors' bid to explain the good few.

The tone of the book is rather modest, but the authors do get a bit too wordy and chummy in many instances. While I liked the modesty, I got bored with the chumminess.

Recommended.

James Collins is a management researcher from Boulder (Colorado) and Jerry Porras is a professor of organizational behavior and change at the Stanford Graduate School of Business. This book is really split up into three parts: (1) An introduction into the research.; (2) The core ideology of visionary companies.; (3) The habits of visionary companies; (4) Methods for implementation.

The authors explain their research methods of this six-year research project into visionary companies. "Visionary companies are premier institutions - the crown jewels - in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them." The authors used the term 'visionary', rather than just 'successful' or 'enduring', to reflect the fact they have distinguished themselves as a very special and elite breed of institutions. In order to compose these visionary companies the authors started with a set of criteria which those companies had to meet: (1) Premier institution in its industry; (2) widely admired by knowledgeable businesspeople; (3) made an indelible imprint on the world in which we live; (4) had multiple generations of chief executives; (5) been through multiple product (or service) life cycles; (6) founded before 1950. With these criteria in mind the authors select 18 visionary companies from a wide range of industries, plus 18 comparison companies (which are not weak or bad companies either).

So what do these visionary companies have in common? They have core ideologies consisting of more than a bunch of nice-sounding platitudes. A visionary company's core ideology consists of core values ("The organization's essential and enduring tenets") and purpose ("The organization's fundamental reasons for existence beyond just making money"). But the authors comment that ocre ideology alone cannot make a visionary company. Ultimately, a visionary company is build up from a core ideology complemented with a drive for progress and a preservation of the core complemented with a stimulation for progress.

The authors then turn their attention to the specific methods of preserving the core and stimulating progress that distinguishes visionary companies from the comparison companies. They split these methods up into: (1) Big hairy audaciou goals (BHAGs) ("Commitment to challenging, audicious goals and projects toward which a visionary company channels its efforts."); (2) Cult-like cultures ("Great places to work only for those who buy in to the core ideology; those who don't fit the ideology are ejected like a virus (preserves the core)."); (3)Try a lot of stuff and keep what works ("High levels of action and experimentation that produce new and unexpected paths of progress and enables visionary companies to mimic the biological evolution of specias (stimulates progress)."); (4) Home-grown management ("Promotion from within, bringing to senior levels only those who've spent significant time steeped in the coe ideology of the company (preserves the core)."); and (5) Good enough never is ("A continual process of relentless self-improvement with the aim of doing better and better, forever into the future (stimulate progress).")

In the final chapters the authors provide a summary of the book, which they refer to as the vision framework: Articulating a vision = core ideology (core values and core purpose) + envisioned future (10 to 30 year BHAG and vivid descriptions). There are also some tools to create all these items in this framework. In this 3rd edition there is also 'a message for the new economy' in which the authors conclude that the dot-com craze is based on 'Built to Flip' and not 'Built to Last' ideas. They provide some questions for to check whether your organization is built to last or built to flip. This chapter is a waste paper.

This is a good book into the habits of successful companies, although the habits are somewhat 'soft', and difficult to implement in existing companies. The biggest criticism McKinsey & Co had on this book: "We really love 'Built to Last' here, but unfortunately it's useless. ... all the companies in 'Built to Last' were always great. They were never average. But that's most of the world." As an reply to this criticism Collins has recently written 'Good to Great: Why Some Companies Make the Leap ... and Others Don't' (2001). My greatest criticism on this book is the amount of repetition and therefore I recommend others to go for the e-articles 'Build Your Company's Vision' and 'Turning Goals into Results', both by the authors of this book. I also recommend Jim Collins' latest article 'Level 5 Leadership' (2001) which is based on his latest book 'Good to Great'. This book is written in simple US-English.

If you invested in a general market stock fund, or a comparison company, and a visionary company January 1, 1926 and reinvested dividends, a $1 in the general market fund would have grown to $415; not bad. Your $1 investment in the comparison companies would have grown to $955 (twice the general market). But your investment in the visionary companies would have grown to $6,356, six times greater than comparison companies and fifteen times greater than the general market.

The "visionary" companies: 3M, American Express, Boeing, Citicorp, Ford, GE, Hewlett-Packard, IBM, Johnson & Johnson, Marriott, Merck, Motorola, Nordstrom, Philip Morris, Procter & Gamble, Sony, Wal-Mart, Walt Disney.

Enduring companies grow because they concentrate on being a great organization, not because of an original idea for a product or service. A lasting, core ideology is the driving force behind a visionary company; not culture, strategy, tactics, operations or policies. Core values are simple, clear, straightforward beliefs of unchanging, fundamental values such as The Golden Rule, but core values differ widely. They are the basic reason for existence beyond just making money. Visionary companies concentrate on building an organization rather than implementation of a great idea, charis-matic leadership, or wealth accumulation. The authors call it "clock-building" rather than "time-telling."

Growth favors the persistent but persist in what? They never give up on the company, but drop losing ideas, adopt winning ideas and along the way, try many ideas to find winners. But it's the company, not the idea. Most revealing was the extraordinary fact that visionary companies can live with contradictory ideas and forces at the same time. They don't accept an A or B concept, for example, that there must be either stability or change. They do both at the same time, all the time.

This is a rare, difficult trait. The book aptly quotes F. Scott Fitzgerald: "...first rate intelligence is the ability to hold two opposed ideas... at the same time.. . and still function."

The profit myth. Visionary companies are more idealogically-drlven and less profit-driven than comparison companies. Of course they pursue profit, but they do both. More importantly, their values don't shift with the times, or changing markets.

As the authors reel off the rather obscure names of heads of visionary companies (and their personality traits), clearly they aren't charismatic leaders, but perhaps better described as "architects." People have always harbored a deep need to be assured that someone or something must have it all figured out; God must have made it that way. Not so with visionary companies. Things are the way they are because the founders created an evolving, changing process for selecting what works and doesn't work. And these visionary companies continue to come up with a stream of successful products and services.

Other shattered myths. Playing it safe: They make bold, risky commitments and make them work most of the time. A great place to work: You fit and flourish or hate it and leave. Brilliant strategic planning; Best moves are made by trial and error. Beating competition: They concentrate on beating themselves. They believe in home-grown management; promotion from within. The authors conclude that new ideas will become obsolete faster than ever before, therefore corporate success must be ideological and provide common bonds of values, beliefs and aspirations.

This is a landmark book. It goes beyond corporate concepts and provides new insights on growth for individuals, groups or organizations.

I'm not a business person, and don't willingly read business books. Yet this one has something to offer, even to me.

These boys go about their research with serious intellectual integrity -- willing to let the evidence destroy their hypotheses and starting over with new ideas -- they come upon some deep and important truths about leadership. For example: Preserve the core philosophy, hold all else loosely. Look for ways to replace "either or" with "yes AND" Be a clockbuilder, not a timeteller.

Among other ideas. I don't know if what is here is profound in the business world, as I don't exist in the business world. But it is often the simplest of simple truths -- the kind we tend to overlook.

I read this as part of a staff of a campus ministry, and found it definitely helpful. I think any leader of ANYthing will find it helpful. If I ever go into business, I'll come back to it. There are no "quick steps to success" or get-rich plans, there is simple a strong philosophy of business clearly expressed.

As I said, the boys have done their research, and are eager to show it. The book bogs down when they cite example after example of how their "visionary companies" have illustrated the concepts they are putting forward --proving to me that they're right, but testing my patience at the same time.

The subtitle of this book sums it up best: "successful habits of visionary companies". The authors of Built to Last researched a handful of exceptional "well-built" and performing companies and compared them to the "next-best-in-class" companies to determine what characteristics made the best companies better than all the rest. Their research led them to find many similarities among the "world class" companies which, of course, is what the main content of the book is about. This book had a large impact on me for a couple reasons. First, I've used many of the words and phrases that I learned here and transferred them to my working environment. (e.g. "mission", "vision", "core ideology", "core values", etc.) Second, I've been able to use many of the model companies in this book to teach others in my company how business should be managed. (e.g. Merck, Hewlett Packard, Motorola, Wal-Mart, Johnson & Johnson, etc.) There are so many good ideas in this book that I made a note to myself to "read it once every year just for some new ideas". I've taught business peers more from this book than any other I have read.

I read this book about three years ago and have come back to it many times since -- this is not something I can say about many business books. What makes this different is that 1) it has solid research behind it and 2) the writers have successfully organized it to be read as a compelling narrative AND to be usable as a reference. It was at the core of our own organization's effort to discover and articulate our values, which in turn helped us focus as we rapidly grew from a small to medium sized company.

I also bought the audio cassette as a bit of crutch to get through it the first time. Though it requires your attention and a little rewinding, I found this a great way to both get the core concepts to sink in and, since then, to refresh my memory on occasion.

Last note. I have had the opportunity to work with two of the mentioned 'Visionary' companies described in the book and can attest to their substantive cultural difference and the impact it has on the motivation and focus of their people. Highly recommended for a wide range of readers.

Having spent the last four years of our lives being taught to think about every business problem in a particular way, it was great to read a business book that encourages you to "think outside of the box." We have read many textbooks in our time at University, and it was refreshing to read a book that expressed clear and simple ideas that we will remember after we graduate. "Built To Last" started off strong by `shattering' the 12 well-known "myths" that they teach us in school. The book then continued with the author's model that is based around the premise of preserving the core ideology, and stimulating progress within the organization; it uses simple points that build on one another to create a first-rate framework. The authors make their points at the beginning of each chapter and then build on them with numerous examples of `visionary' companies...Some of our favorite points were:
- The true definition of a core ideology; including the distinction between a core purpose and core values;
- Encourage trying lots of stuff and keeping what works;
- And, "The Genius of the And"...it is possible to have two things at once.
Although, this book was primarily targeted towards entrepreneurs and CEO's, we found that we could use this book for our future career search and within our daily lives. For example, the chapter titled Cults and Cultures outlined the extraordinary commitment employees have to their particular organization; Personally, we don't think we have what it takes to be a true "Nordie," but it gave us insight into what characteristics and traits to be looking for in an organization we would like to work for.
Some of the inferior traits of the book are that there were some parts in the novel where the authors seem to stretch their examples to fit within their framework, and they came across as being slightly bias to their own theories. We also found that they never mention the same company in every chapter, which made it harder to follow and also harder to believe that every visionary company fit all aspects of their model. However, overall, this book is an easy read, with a simple model that makes sense. It uses interesting companies and is backed up by 6 years of intense research. We recommend this book to any student who is looking to think on different terms than what we are being taught in school.

The concept behind this book is brilliant: What makes companies that outperform their peers for decades enjoy that success. The most important lesson of this book is to create lasting ways of managing your business successfully, that will outlive the skills and perspective of any one person, no matter how talented. The book is fun to read. I liked the way the ideas were described: Big, hairy, audacious goals is a fun concept just from the title. One of the most useful ideas is that we need to hold conflicting ideas in our minds, such as "do more" and "spend less". English often suggests that conflicts exist in what can be done that do not really exist in practice. This book is outstanding for "telling it like it is". Of particular interest to investors will be the stock-price charts showing how valuable these lessons are for public companies and their shareholders.

The authors of 'Built To Last' has researched 18 highly successful companies and 18 of their respective competitors, who also has done well - but not as good, and come up with some interesting theories that in essence supports the chaos theory. Fascinating!

Not that current management practices is slaughtered, but rather enhanced and evolved. E.g, anyone who has read Dilbert knows to hate vision statements. In comparison, 'Big Hairy Audacious Goals' are the same but they are i-n-s-p-i-r-i-n-g. And did you know that many of todays market leaders like HP and Sony started off without any "big idea"? They also kill a few other myths along the way, like - it is always interesting to work in a firm which has a vision.

After resolving the myths the authors explore some common ground to why these companies are so successful and which should be relevant to most companies: You can have the cake AND the dessert, Ask yourself: why do our company exist?, find and preserve the core/stimulate progress, build a culture, try a lot of stuff and keep what works, develop your own top management (who knows the system better?) and compete with yourself.

Now, these companies are the major players in their respective markets, and how these theories work for smaller companies is an important question. As is the question of how these big firms did things to become successful. Was it a shot of luck in the nick of the time? Following their examples today might be painful due to the everchanging rules of this game.

Nevertheless there are a lot experience to feed upon here and the lessons learned might prove worthwile, even though you just follow some of the guidelines.