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Built to Last

Built to Last Successful business habits of visionary companies can best be described in the book Built to Last by Collins and Porras. Built to Last uses highly successful corporations that fall under specific criteria to correctly describe how these companies became and still are visionary. The visionary companies were researched and examined by using a set of control companies to find what set them apart. This book accurately describes what makes a visionary company work. It diminishes any misconceptions and myths that visionary companies may take on. In order for the authors to research visionary companies properly the companies meet the criteria of the following: premier institution in its industry; widely admired by knowledgeable businesspeople; made an indelible imprint on the world in which we live; had multiple generations of chief executives; been through multiple product (or service) life cycles; and founded before 1950. If you take the criteria that these visionary companies meet you will find extraordinary companies that surpass that ordinary ones. There are many interesting conclusions that the authors came up with through there research. One interesting research find was that “creating and building a visionary company absolutely does not require either a great idea or a great and charismatic leader. In fact, we found evidence that great ideas brought forth by charismatic leaders might be negatively correlated with a building a visionary company.” I found this fact to be intriguing. I had always thought that most companies were started on a great idea, or at least with some direction. It turns out that some of the visionary companies just wanted to start a company. It amazes me that it might actually negatively effect how a business starts, but I can see how it might. How to strong of a leader may have weak followers and a great idea could be the only idea. The authors used a great analysis of “clock building, not time telling.” This one statement helped me see how visionary companies were started. To help explain this analysis an excerpt from the book states, “ They concentrate primarily on building an organization-building a ticking clock- rather than on hitting a market just right with a visionary product idea and riding the growth curve of an attractive product life cycle.” Basically a visionary company is more concerned on building an organization that can prosper throughout history other then one that makes money on one product and then diminishes. It’s the fact that the true vision, the true point in which architecture takes on its clock building role, is when the greatest creation becomes ‘the company itself.’ This has to be one of the biggest misconceptions of starting a company. I think to many people focus on one idea to start a company. The idea they must realize is to be a successful lasting corporation they must have a foundation before anything else. A very important part of building a visionary company comes with a core ideology. At the same time though core ideology must be subject to change with evolution. A company that can handle these two majors facets is a company that will develop an employee base and stimulate the progress for growth for years to come. All the visionary companies in this book showed exceptional knowledge for core ideology and the need to modify the core itself. Some of the best core ideologies mentioned in the book are broad but so direct that they seem almost common sense. For instance Merck’s “We are in the business of preserving and improving human life,” sounds quite broad but yet describes quite well what Merck is about and has the ability to change for times of evolution. Merck’s ideology is not only a business statement but its what their employees work for. It gives them a sense of pride that their company cares about what their products do other then how many products they sell. This type of ideology is one that all companies should reach for. A short interlude in the book that I felt was one of the most informational and eye opening facts was, “No ‘Tyranny of the or’ (embrace the ‘genius of the and’)”. It seems like a simple concept to grasp but for a company to actually achieve the ‘and’, a distinctive and, sets apart a visionary from a regular. The ability of getting separate main ideas both going at the same time all the time is what the ‘genius of the and’ is all about. The book accurately states, “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” All of the visionary companies in this book possess this ability. One example the book gives of a paradox of the and is, “conservation around the core and bold, committing, risky moves.” These two very separate ideas when working together allow a company to be distinctively active in two extreme opposite ideas. Having the ability and knowledge of the “genius of the and” helps visionary companies to more then profits. Visionary companies are able to stick to their ideals, because if the couldn’t they would lose all basis and foundation that they stood for. The visionary companies started out with a purpose, with guidelines to operate by. They pioneered themselves through startup and hard time’s never leaving their ideals behind and still striving for profit. Many of the ideals of the visionary companies help not only the company itself but help the world. For example Sony pledged to “pursue dynamic activities in technology and production for the reconstruction of Japan and the elevation of the nation’s culture.” This purpose for Sony exemplifies how a company becomes a genius of the and. To reach the many aspects that visionary companies posses like, genius of the and, ideology, and more then profits, a company must try a lot of stuff. To actually read in this book some of the many products that these companies produce is dumb founding. The book best describes try a lot of stuff by saying, “The idea is simple: if you add enough branches to a tree (variation) and intelligently prune the deadwood (selection), then you’ll likely evolve into a collection of healthy branches well positioned to prosper in an ever-changing environment.” The book calls this idea “branching and pruning.” If you take in this statement and realize how companies achieved this you can see how 3M’s product line is so diverse. This statement explains how for instance 3M would listen to any original idea. They encourage people to think, and to try. In other words they gave their employees individual initiative to produce, not afraid of what mistakes might follow. For 3M to select an idea, it had to be new and solve a problem or be useful to someone. 3M is a great example of a clock and not just something that tell times. General Electric a great example for the next very interesting fact taken from this book, the ‘Home-Grown Management.’ Through out many of my management courses I have been told that the best managers come from outside the company to bring new ideas in and spark new energy. That outside managers can bring the knowledge of another company and a fresh new look. This may be true for a company that is looking to completely revive itself and change but for a visionary company I can’t see it but anything far from the truth. I have always believed that the best managers would come from within. They have the complete knowledge of the company and who and what they stand for. These managers have normally started from the bottom and worked their way up to the top gaining experience from every part of the company. This idea of home-grown management can be described through an excerpt from the book about Jack Welch former CEO of GE and a legendary manager. This excerpt states, “To have a Welc-caliber CEO is impressive. To have a century of Welch caliber CEO’s all grown from inside- well, that is one key reason why GE is a visionary company.” The authors found an astonishing number of home grown management in their visionary companies. They said that, “across seventeen hundred years of combined history in the visionary companies, we found only four individual cases of an outsider coming directly into the role of chief executive.” Bibliography:

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