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Built To Last - Successful Habits Of Visionary Companies 
This analysis of what makes great companies great has been hailed everywhere as an important work, and still sells consistently well. First published in 1994, what sets this book apart is the methodology its authors use. It is based on a scientific approach that identifies 18 "visionary" companies and sets out to determine what's special about them. To get on the list, a company had to be world famous, have a stellar brand image, and be at least 50 years old. Not only that, it compared them to a control group of other household names, that, although also successful, were simply not as good. But no time is wasted on why these companies are not as good. It is all about what's special about their 18 "visionary" picks. The core myth, according to the authors, is that visionary companies must start with a great product and be led by charismatic leaders. What they found was that the majority of the "visionary" companies, including giants like 3M, Sony and Hewlett Packard, were characterized by total lack of an initial business plan or key idea and they were led by remarkably humble leaders intent on building a culture that allowed their people to succeed, while they got out of the way. What they excelled at was building a "core ideology" or identity, that everyone could embrace and commit to. 3M for example, started life as Minnesota Mining and Manufacturing, but it had no real master plan, little structure, and no prima donnas. Instead it had bright people keen to see the company succeed and unafraid to experiment; to "try a lot of stuff and keep what works.". Today they boast that "For more than 100 years, people around the world have looked to 3M for products and ideas that solve problems and make their lives easier and better. With more than 55,000 products, 30-plus core technologies and leadership in major markets served worldwide, 3M continues to develop ingenious solutions to meet your varying needs" The visionary companies, the authors found after six years of research, had a number of common characteristics that can serve as practical lessons and a blueprint for building successful organizations. One is they all had, not a mission statements as much as a statement of purpose. What was their "raison d'etre, their reason for being? The purpose of Disney is to make people happy. At Mariott Hotels, it is to make travelers feel they are among friends and really wanted. Of course the challenge is to translate the purpose into concrete action, but if you let purpose guide your action, you go a long way to ensuring you are going in the right direction, whatever you do. Another is that they set what the authors call “Big Hairy Audacious Goals” (BHAG). It is kind of like John F Kennedy saying that the USA will land a man on the moon within ten years. A simple, yet audacious statement and goal, easily envisioned, that everyone wants to embrace and give their all to achieve. At GE it is: "To become #1 or #2 in every market we serve and to revolutionize this company to have the speed and agility of a small enterprise." For Sony in the 1950's it was: "To change the image of Japanese products as poor in quality." Very important, and alluded to above, leaders of visionary companies spent their time "clock building and not telling time". By this, the authors mean that leaders of visionary companies concentrate on building an organization rather than on hitting the market just right with a great product. The organization also embraced a core ideology that combined its core purpose and core values, and used as a guide for their actions. For Marriott, the core ideology includes "friendly service," "continual self-improvement," and "overcoming adversity to build character." At 3M its "innovation," "absolute integrity," and "tolerance for honest mistakes." Visionary companies also have a deep seated need to progress. Motorola, for example, went from car radios to televisions, microprocessors, cellular communications and satellites circling the earth, while rival Zenith stalled out with televisions. They are also always looking for ways to challenge themselves to get better. Boeing, for example, ask its people to develop strategies that exploit its weaknesses, as if they worked for their competition. Visionary companies are also very good at learning, and they invest heavily in professional development, new technologies, and new management methods, always looking to become better. Consistent with this, they also "Try a Lot of Stuff and Keep What Works". The authors describe "experimentation, opportunism, and accident" as powerful forces. For example, in 1890 Johnson & Johnson, a supplier of medical plasters to physicians and hospitals, responded to a complaint about patient skin irritation by including a small can of talc as part of its standard package. To the company's surprise, customers soon began asking to by the talc directly. Hence, the birth of a new product: Johnson's Baby Powder. 3M, already cited is perhaps the best example. Failing early as a mining venture, the tiny company focused on solving technological problems, following dictums like "Listen to anyone with an original idea, no matter how absurd it might sound at first," and "Give it a try and quick." Through variation and selection 3M has produced a wide variety of market leading products. Both examples illustrate what Collins and Porras call "evolutionary progress," because it closely resembles how natural species evolve and adapt to their environments. Through a process of variation (try a lot of stuff) and selection (keep what works) organizations, like species, can be well positioned to prosper in ever-changing environments. I've given a few important examples of what is in the book, but there is lots more to like. It is certainly no panacea for curing corporate ills, but it does provide practical lessons, and it is far superior to any number of lists and habits and secrets that try to distil wisdom into sound bites. Definitely worth having as part of your library and still valid after all these years. Yes, it was built to last. Built To Last James Collins and Jerry Porras First Published 1994 Harper Collins ISBN 0-88730-671-3 © 2007 John B Voorpostel CA www.iaccountant.ca
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