I’ve just finished reading Built to Last by Jim Collins and Jerry I. Porras. I picked up a copy of Fortune magazine on my Frontier Airways flight from San Jose, Costa Rica to Los Angeles. One of the articles that caught my eye was about Jim Collins and the book he’s working on. They referenced his earlier work Built to Last. I picked up a copy a week later at LAX before my flight to New York.
Jim Collins and Jerry I. Porras wrote the book as the product of a 6 year research project. They selected 18 companies which they identified as “visionary”. Each company was at least 50 years old and had survived and indeed thrived under multiple generations of leadership and multiple product cycles. The idea was to find companies that had succeeded beyond the success of one individual product or leader.
They then painstakingly researched these companies, some founded in the 1800s, and compared them against a carefully selected set of “comparison” companies. The comparison companies all outperformed the market, but were not as highly regarded or as profitable as the “visionary” companies. In effect, they compared a list of great companies against a list of outstanding companies.
Over a 6 year period they identified a series of trends, patterns, consistent behaviours that set visionary companies apart. These findings are the subject of their book.
The first concept the authors introduce is that of time telling versus clock building. They define clock building as the art of building something that will endure, that will perform, over a very long time (over 50 years in this case). Whereas time telling is the act, the trade, the work of a person.
A great time teller may be able to tell you the exact time, to the second, at any point, night or day. That person is incredibly skilled and (in the context of the metaphor) extremely useful. However, the clock builder by comparison, creates a device that tells any person the time, long after the time teller or clock builder themselves will be dead.
The authors assert that the leaders of visionary companies are clock builders, not just time tellers. They build organisations, institutions in fact, that are designed to endure, to perform over the long term (50+ years). These leaders build companies which transcend their personal leadership and even the current products of the company.
The so-called visionary companies are like wonderful, artistic clocks. They tick and whir and continue to operate through many generations of people, products and markets. As a result, these visionary companies drastically outperform their comparison companies in financial terms. The visionary companies performance is in an entirely different league to that of a “market average” company.
Genius of the and
The authors warn of “the tyranny of the or”. They propose that visionary companies strive to achieve multiple objectives simultaneously. For example, to plan for 10 to 30 year goals while also performing exceptionally well today. To give back to their communities, employees and customers while also making healthy profits.
This is a wonderful concept to me. I’ve long held the belief that being ethical or doing the “right” thing is not counter to being successful. The authors described this concept wonderfully in calling it “the genius of the and”.
They showed that time and time again, visionary companies set extremely high milestones in areas which might traditionally appear to be in conflict. The most common example is financial performance, profit. Visionary companies show that treating people well, treating the environment well, is actually a hugely profitable strategy, far more profitable than the “average” company who views these objectives as mutually exclusive.
Preserve the core, stimulate progress
Using the yin / yang symbol, the authors introduce the motto “preserve the core, stimulate progress”. This is essentially a simple concept. Define what the company is about, not what it does, and remain true to that while changing everything else.
This means truly defining what your company is about, what it means, what it believes, not merely the actions it performs. This can be thought of as the company’s personal values, belief systems. What does the company believe to be important beyond just profit.
Once that has been discovered, and it can only be discovered not prescribed, remain absolutely true to it. While remaining true to these core values, change as necessary in response to market conditions, the outside world, and all manner of other factors. In fact, change constantly, recognise change as the only constant.
This is linked to the idea of the genius of the and. In addition to constant change, the core must remain solid. Remain true to the ideals of the company, but respond to the external world proactively.
Seek consistent alignment
Tied into the concepts above, work tirelessly and continually to keep the company in alignment with its core values, its core beliefs, what it stands for. Any misalignment between these two must be stamped out ruthlessly. New and creative ways must be perpetually sought to bring the company more into alignment with its ideals.
This is a crucial point. To simply write a mission statement, values, and so on, means nothing. A company must truly live these values. Everything within the company must constantly reinforce these values. In other words, talk is cheap.
If a key value is to treat all staff as equal, this must be carried through in every decision the company makes. If upper management travel by private jet while other people within the company do not, this is out of alignment. This is a clear signal that the company does not truly live it’s so-called values.
This process of seeking alignment is a perpetual one.
I enjoyed the book. I read it in less than 10 days. The content of the book is excellent. The points made are spot on. The actual writing style of the book I found a little long winded, slightly academic and at times dull. But not so much that I stopped reading it or skipped sections.
Overall, I thoroughly recommend Built to Last to anyone interested in business, organisations or better understanding the world around them. I gained deeper insight into how the world works through this book.