Ten Lessons from Built to Last

Authors Jim Collins (author of the best-sellers Good to Great and Great by Choice) and Jerry Porras compared 18 sets of long-running and successful companies. Their goal was to learn what differentiated the visionary company from the comparison company. Their research identified key traits and habits prevalent in the more successful companies. Thus, they formed the basis of their book, Built to Last: Successful Habits of Visionary Companies.

This post summarizes ten lessons of visionary companies from the book. As a bonus, we also offer six suggestions for leaders to align an organization better.

1. You don’t need a great idea to start a great company.

Few of the visionary companies in the book begin with any specific idea. Visionary companies often get off to a slow start, but they set BHAGs (below). Then they experiment with ideas that move them towards their vision while sticking to their core values.

The success of visionary companies comes primarily from successful underlying processes and core values. Success does not come from a unique idea, patent, or trade secret.

2. Charismatic, visionary leaders are not required.

Visionary companies benefit from strong leadership, but the book found the best leaders were more akin to architects building a company based on human ideals and values. Any leader, charismatic or not, can design a company that is built to last by following these lessons.

3. Don’t make “maximizing profit” your primary goal.

Visionary companies set a target that is about more than just profit. Profitability is a necessary condition in any company, but it is not the why and reason for the company to exist. The organization exists to do something collectively that could not be accomplished separately. Paradoxically, visionary companies make more money than the more purely profit-driven comparison companies.

4. There is no “right” set of core values.

There is no “correct” set of core values for a visionary company. Similarly, two companies with opposite values can both be visionary and highly successful.

5. Visionary companies almost religiously preserve their core ideology.

The key is to maintain continuity and stability while simultaneously stimulating progress and continuous improvement. Companies that are built to last are constantly adapting and improving while keeping the core ideology fixed. Intentions don’t matter; it is the translation of intentions into concrete action and results that make the difference.

6. Visionary companies set Big, Hairy, Audacious Goals (BHAGs).

Big, hairy, audacious goals stimulate progress by focusing and engaging the people on the team. Good BHAGs (pronounced bee-hags) are clear and compelling. They must be related to and preserve the core ideology of the company.

BHAGs often appear nearly impossible to outsiders. Company employees must see the goals as challenging but also achievable. A good way to develop your BHAG is to look for the alignment in three areas:

• What are you deeply passionate about?
• Currently, what drives your actions and income?
• What can you be the best in the world at?

7. Visionary companies do not try to be great places to work for everyone.

Visionary companies are tough and disciplined. They have clarity about who they are, what they are for, and their goals. They don’t have patience for employees who are unwilling or unsuited to their demanding standards.

Built to Last companies often create cult-like cultures. Not every person will agree with the core values and ideology of the business and fit in.

8. Visionary companies succeed mainly through experimentation.

First, determine your core values and why you exist. Next, try a lot of stuff and see what works. The Built to Last companies experiment and learn what works. Read our posts about the improvement cycle and Lean innovation to learn more.

The authors note, “We found the concepts in Charles Darwin’s Origin of Species to be more helpful for replicating the success of certain visionary companies than any textbook on corporate strategic planning.”

9. Companies develop leaders from within the organization rather than hire outsiders.

Built to last companies typically develop and promote leaders from within, rather than hiring outsiders. This ensures an understanding and agreement with the core values and ideology, which is not guaranteed when hiring an outsider.

10. Visionary companies focus on beating themselves, not the competition.

Visionary leaders build for the long term. Simultaneously, they hold themselves accountable to highly demanding short-term standards. Any Lean practitioner knows that the goal of continuous improvement is perfection and never ends.

Six Lessons of Alignment for CEOs, Managers, and Entrepreneurs

1. Paint the Whole Picture: A visionary company is like a great work of art –minor details matter! It is comprehensiveness and consistency over time that builds the culture.

2. Sweat the Small Stuff: Vision statements, core values, etc. don’t matter as much as the day-to-day details of the company and culture. Employees notice little things. They want to believe in the vision. However, they will be on the lookout for inconsistencies that break the bonds of trust with management.

3. Cluster, Don’t Shotgun: Collins notes this again in Good to Great with the mantra: Fire bullets, then cannonballs. Once you have a successful experiment, leaders must take pieces that reinforce one another and combine them into a powerful punch into place.

4. Swim in Your Own Current, Even if it is Against the Tide: The right question to ask is not, “Is a practice good?” but rather “Is this practice appropriate for us – does it fit our ideology and ambitions?” Alignment is about being guided by your own vision and values. Even if it is contrary to trends and fads.

5. Obliterate Misalignments: Alignment is not just adding new things. It is also about correcting misalignments that move a company away from its core ideology. The only sacred cow in a visionary company is its core ideology. Anything else should be changed or eliminated if it isn’t aligned.

6. Keep Universal Requirements While Inventing New Methods: You must have a core ideology and drive for progress to be a visionary company. Every leader should be working to implement methods that share and preserve a core ideology to guide and inspire employees.

A look back at Built to Last

It is important to note that some of the Built to Last companies studied in the book have struggled recently. As a result, some of the research methods used in writing the book have been critiqued. We aren’t worried about the issues. We also believe these lessons for visionary companies and lessons of alignment have stood the test of time and will continue to be relevant 100 years from now.

Learn more about Author Jim Collins’ research in his follow-up book Good to Great and in Great by Choice.

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