What makes companies great? It is a visionary leader or a brilliant idea or right timing? Not so, according to Jim Collins and Jerry I. Porras.
What sets them apart are their inspiring purpose, timeless value-driven core philosophy, and continuous evolution. Collins and Porras have captured the DNA of such companies in their wonderful book titled Built to Last.
Do you aspire to make your business one among such companies? If you apply the principles from this book, it’s not a guarantee that your company will become one. But you will, without doubt, get close.
Here are my 7 most powerful learnings from the book Built to Last.
1. Have an inspiring purpose.
“I’ve concentrated all along on building the finest retailing company that we possibly could. Creating a huge personal fortune was never particularly a goal of mine.” – Sam Walton, founder, Walmart
Every business exists to solve a problem and serve humanity. While making money validates a business idea, it can’t be the only reason for a business to exist.
Visionary companies follow a cluster of objectives, of which making money is only one, and not the primary one. Profit is like oxygen, food, water, and blood for the body. They’re not the point of life, but without them, there is no life. This means profitability is a necessary condition for existence and a means to more important ends. But it’s not the end in itself for visionary companies.
Such companies continuously ask bigger questions. Like, “What do we stand for? Why do we exist?” A larger purpose guides and inspires organization for years, perhaps even centuries.
2. Be a clock builder, not a time teller.
Imagine you can tell the time by looking at the position of the sun. That’s remarkable. But wouldn’t it be even better if you could build a clock that tells the time even when you’re not around?
Think over it. Even as the world’s best time teller, you can help the people who ask you, who are a handful at best.
But as a clock builder, you can create something useful for billions of people. Imagine the potential wealth it can generate for you in return.
All great entrepreneurs are clock builders. They spot large opportunities to serve humankind and invest their resources to build unique competencies to address them.
In the process, they build companies that create tremendous value for various stakeholders. Wealth becomes a byproduct of this value.
There are millions across the globe who desperately need what you offer. You can empower them to improve the quality of their lives. So instead of focusing all your energy on being a great time teller, focus your energy on building excellent clocks.
When you help a large number of people to achieve their goals, they will help you achieve yours.
3. Be driven by your core principles
A key characteristic that sets visionary companies apart is their core ideology that drives every decision they make.
“Any organization, in order to achieve success, must have a sound set of beliefs on which it premises all its policies and actions. These beliefs always come before policies, practices, and goals; the latter must always be altered if they violate fundamental beliefs. The core value can be stated a number of different ways but it remains simple, clear straightforward, and powerful.”
A core ideology is like an operating framework. It’s the reasons why you do what you do, what motivates you to keep going. It embodies the factors you think about while making life’s most important decisions. It is not only about getting the results but also the process – how the results are obtained.
Here’s a personal example. A healthcare customer approached us looking to raise $20 million. It was a lucrative transaction in terms of our fees. But some research raised many alarms, which included the arrest of promoters in the past.
Without further thought, we dropped the transaction. The lesson is: there is no compulsion to associate with people who don’t match with your core values, no matter what.
4. Set “Big Hairy Audacious Goals”
“Shoot for the moon. Even if you miss, you’ll land among the stars.” – Norman Vincent Peale.
Do your goals stimulate progress? Do they create momentum? Do they build excitement? Are people willing to throw their creative talent and energies into them? Do they fit in with your core ideology?
If the answer to these questions is “yes!,” you have ‘Big Hairy Audacious Goals’ (or B-HAGs). The authors explain that these goals are a ‘commitment to a huge daunting challenge’. They are tangible, clear, compelling, and people get them right without explanation.
Powerful goals are the ones you’re not quite sure you can accomplish from the start. As Richard Branson said, “If somebody offers you an amazing opportunity but you are not sure you can do it, say yes – then learn how to do it later!”. When you live your life like this, you achieve more than you thought you could.
5. Develop an enviable culture
Successful organizations develop a culture of innovation, long-term thinking, useful processes, and more. And they’re proud of it. People fit in there or don’t – it’s binary and there’s no middle ground.
“Visionary companies tend to be more demanding of their people than other companies, both in terms of performance and congruence with the ideology,” the authors wrote. For example, Disney proliferates the culture of ‘Dreams’, ‘fun’, ‘excitement’, ‘joy’, ‘imagination’, ‘special’, ‘different’, ‘unique’ and ‘magical’. And, people live, breathe, eat, and sleep what they do.
6. Evolve, baby evolve
Most companies don’t have a clear idea of where they are going. Even if they have one, they change their course depending on the situations on the path. The authors write, “waiting for the great idea might be a bad idea.” Businesses change their direction with the changing times.
“Visionary companies spend immense time and resources letting their people experiment with ideas. They test out new ideas on a small scale, allow products and services to test the market, grow with demand, and transform the companies’ focus over a period of time.”
Such companies are comfortable killing their own ideas/ products /services and reinvent/renew themselves. They kind of institutionalize evolutionary process – widespread innovation/experimentation culture to grow and thrive.
Johnson and Johnson’s accidental move into consumer products, Marriot’s opportunistic step into airport services, American Express’s unintended evolution into financial and travel services, and 3Ms entry into innovation products business, are some examples.
The authors define this “Evolutionary Progress,” which is essentially unplanned progress. “Evolutionary progress usually begins with small incremental steps, often in the form of quickly seizing unexpected opportunities that eventually grow into major-and often unanticipated – strategic shifts.”
Create room for ‘acceptance of failure’. Elon Musk stated, “You should be failing. If things are not failing, you are not innovating enough.” Companies must accept failed experiments as per evolutionary progress.
Walmart’s philosophy is, “If you try something and it works, keep it. If it doesn’t work, fix it or try something else.” The difference between visionary companies and others is that visionary companies consciously evolve to harness their inner power to stimulate progress.
For instance, 3M lives with the following philosophy:
- Listen to anyone with an original idea, no matter how absurd it might sound at first.
- Encourage; do not nitpick. Let people run with an idea.
- Hire good people and leave them alone.
- If you put fences around people, you get sheep. Give people the room they need.
- Encourage experimental doodling.
- Give it a try – and quick.
3M’s leaders could not predict where the company would go in the future. But they had little doubt that it would go far.
7. Your Only Competition is Yourself
“I will always remain work in progress… never complete.” This is how I think of myself. Continuous improvement is a way of life.
Charlie Munger stated, “Every night when you go to bed, you have to be better than what you were when you got up that morning.” Let a fire burning inside you impel you to keep pushing, to never be satisfied, and to always search for improvement. You have to hold the present tight while architecting the future. Remember, “good is the enemy of great.”
Visionary companies are never content with their successes. It doesn’t matter if they’ve just released an innovative product, exceeded their earning goals, or become the number one in their industry. They are continuously striving to be better.
This is not to say that you shouldn’t be proud of your accomplishments. Visionary companies have immense pride in the work they do. But more powerful is their pride in their ability to accomplish great things. Rather than being driven to reach certain levels of success, they are driven by the challenge and excitement that comes from pushing their limits and trying to become better every single day.
- Visionary companies define the timeless core values/principles and enduring purpose as constant. Keeping these two constant, they change everything around it – operating practices, business strategies, products, processes – to respond to the changing world.
- Building a visionary company demands a shift in the perspective of leaders. Instead of thinking about a brilliant product, an outstanding strategy, or an amazing transaction, they need to think in terms of building institutions.
- Believe in your capabilities to find new possibilities, go further, and do better. Remember the motto of Mr. Marriott “keep on being constructive, and doing constructive things, until it’s time to die….. make every day count, to the very end.”
Let me put the end to this book review by stating ‘you’ve got to keep going and going’. Remember the wonderful poem of Robert Frost:
“The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.”
Wishing you a Wonderful, Sparkling, and Brilliant year 2021.