Built to Last | Jim Collins and Jerry I. Porras | Cliff Note Books
“Built to Last: Successful Habits of Visionary Companies” is a book written by Jim Collins and Jerry I. Porras, published in 1994. The book explores the reasons behind the success of some of the world’s most enduring and successful companies, referred to as “visionary companies.” These companies have demonstrated an ability to consistently outperform their competitors and adapt to changing market conditions over long periods.
Here’s a summary of the book:
Introduction: The authors introduce the concept of visionary companies and explain their research methodology. They identify 18 visionary companies, which they compare to a control group of 18 comparison companies to understand the key differences between them.
Clock Building, not Time Telling: The authors emphasize that visionary companies focus on building strong, adaptable organizations rather than fixating on specific products or services. They develop systems and cultures that can weather changes and continue to thrive.
No “Tyranny of the OR”: Visionary companies embrace the concept of the “Genius of the AND,” meaning they can balance multiple goals, values, and priorities simultaneously. They don’t settle for trade-offs between short-term profitability and long-term growth, or between stability and innovation.
More Than Profits: Visionary companies are driven by a core ideology, which consists of a strong sense of purpose and a set of core values. This core ideology transcends profit-making and provides guidance and inspiration for employees.
Preserve the Core/Stimulate Progress: Visionary companies manage the tension between preserving their core ideology and embracing change. They maintain their core values while adapting their business practices, goals, and strategies in response to new opportunities and challenges.
Big Hairy Audacious Goals (BHAGs): The authors introduce the concept of BHAGs, which are ambitious, long-term goals that inspire and challenge organizations. Visionary companies use BHAGs to drive progress and innovation.
Cult-Like Cultures: Visionary companies have strong, distinctive cultures that align with their core ideology. These cultures often resemble cults in their intensity, fostering a sense of belonging and commitment among employees.
Try a Lot of Stuff and Keep What Works: Visionary companies encourage experimentation and learning. They try many different approaches, learn from failures, and build on successes to continuously evolve and improve.
Home-Grown Management: Visionary companies tend to develop and promote leaders from within, ensuring a deep understanding of the company’s culture and values.
Good Enough Never Is: Visionary companies foster a relentless pursuit of excellence, always striving to improve and never becoming complacent.
Conclusion: The authors summarize the key findings and emphasize that any organization can adopt the principles and practices of visionary companies. They encourage readers to apply the lessons from the book to their own organizations and pursue lasting success.
Throughout the book, Collins and Porras provide numerous examples and case studies from the visionary companies they studied, demonstrating the principles in action and offering insights into the factors that contribute to long-term success.
QUOTES
“Visionary companies are premier institutions – the crown jewels – in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them.”
“A visionary company doesn’t simply balance between preserving a tightly held core ideology and stimulating vigorous change and movement; it seeks to be both highly ideological and highly progressive at the same time.”
“The critical variable is not the content of a company’s ideology, but how deeply it believes its ideology and how consistently it lives, breathes, and expresses it in all that it does.”
“A company’s drive for profits and pursuit of its core purpose can coexist, interweave, and even reinforce one another.”
“The very process of pursuing a Big Hairy Audacious Goal (BHAG) – a huge daunting challenge, like climbing Mount Everest – builds a powerful, adaptive, and visionary organization.”
“No organization can achieve visionary status without first attracting, developing, and managing extraordinary people.”
“Enduring, great companies preserve their core values and purpose while their business strategies and operating practices endlessly adapt to a changing world.”
“A visionary company is like a great work of art. Think of Michelangelo’s scenes from Genesis on the ceiling of the Sistine Chapel or his statue of David. Think of a great and enduring novel like Huckleberry Finn or Crime and Punishment. Think of Beethoven’s Ninth Symphony or Shakespeare’s Henry V. These are not just beautiful artifacts; they fundamentally changed how people view the world.”
AUTHORS
Jim Collins:
Jim Collins is an American author, consultant, and lecturer on the subject of business management and company sustainability. Born on January 25, 1958, in Aurora, Colorado, Collins earned his Bachelor’s degree in Mathematical Sciences and his MBA from Stanford University. He later received a Distinguished Teaching Award from the Stanford University Graduate School of Business, where he taught for several years.
Collins has authored or co-authored several influential business books, including “Good to Great,” “Built to Last,” “How the Mighty Fall,” “Great by Choice,” and “Turning the Flywheel.” He has also contributed to prestigious publications like the Harvard Business Review, Business Week, Fortune, and The Economist. In addition to his writing and teaching, Collins founded a management laboratory in Boulder, Colorado, where he conducts research and works with leaders from various sectors.
Jerry I. Porras:
Jerry I. Porras is an American author, academic, and business management expert. He was born on September 20, 1938, in El Paso, Texas. Porras earned his Bachelor’s and Master’s degrees in Electrical Engineering from Texas Western College (now the University of Texas at El Paso) and Stanford University, respectively. He later obtained his Ph.D. in Organizational Behavior and Administrative Sciences from Stanford University.
Porras taught at the Stanford University Graduate School of Business for over 30 years, focusing on organizational behavior and change, leadership, and the dynamics of visionary companies. He co-authored “Built to Last” with Jim Collins, which became a best-selling business book. In addition to his academic work, Porras co-founded the Organizational Change Consultants International (OCCI) and served as a consultant to numerous companies and organizations, assisting them in organizational change and leadership development.
Both authors have made significant contributions to the field of business management, offering valuable insights and strategies for building successful, enduring companies.
CRITICISMS
“Built to Last: Successful Habits of Visionary Companies” has received both acclaim and criticism since its publication. Some of the criticisms include:
Survivorship bias: Critics argue that the book’s focus on successful companies might lead to survivorship bias, which occurs when the analysis only considers companies that have survived and overlooks those that have failed. By only examining successful companies, the authors might be ignoring valuable lessons that can be learned from failures.
Lack of clear guidance: Some readers have criticized the book for not providing enough actionable advice on how to implement the principles discussed. The book presents examples and case studies, but critics argue that it could be more prescriptive in terms of practical steps for organizations to follow.
Outdated examples: As the book was published in 1994, some of the examples and case studies used might be seen as outdated. Some of the companies featured in the book have faced challenges or even failed since the book’s publication, leading critics to question the long-term applicability of the book’s concepts.
Limited applicability to small businesses: The book focuses on large, established companies, which may limit its applicability to small businesses or startups. Critics argue that the principles and strategies discussed may not be relevant or practical for smaller organizations that are just starting.
Simplistic view of success: Some critics argue that the book presents a somewhat simplistic view of success, boiling it down to a few key principles. They argue that company success is more complex and multifaceted than the book suggests, and that it is difficult to attribute success solely to the factors discussed.
Despite these criticisms, “Built to Last” remains a highly influential book in the business world, and its core concepts continue to inspire and guide business leaders in building and sustaining successful organizations.
SUMMARIES
- The Best of the Best
- Clock Building, Not Time Telling
- More Than Profits
- Preserve the Core/Stimulate Progress
- Big Hairy Audacious Goals
- Cult-Like Cultures
- Try a Lot of Stuff and Keep What Works
- Home-Grown Management
- Good Enough Never Is
- The End of the Beginning
- Building the Visionary Company
The Best of the Best:
In this chapter, the authors introduce the concept of “visionary companies” and explain the selection criteria they used to identify such organizations. They emphasize that these companies have outperformed the market and have demonstrated sustained excellence over time. The authors present the companies they studied as role models for business success.
Clock Building, Not Time Telling:
The second chapter focuses on the importance of building an enduring organization rather than just creating a single great product or service. Visionary companies are compared to clock builders who design mechanisms that continue to tell time accurately, rather than just focusing on individual time-telling moments. This mindset allows visionary companies to create lasting success beyond the founder’s tenure.
More Than Profits:
This chapter highlights that visionary companies pursue goals beyond just making money. They have a sense of purpose that goes beyond financial success, which helps them attract and retain employees, customers, and investors. The authors emphasize that companies should develop a core ideology, including core values and a sense of purpose, to guide their actions and decision-making.
Preserve the Core/Stimulate Progress:
In chapter four, the authors discuss the importance of preserving the core values and purpose of a company while encouraging innovation and progress. Visionary companies strike a balance between maintaining their core ideology and being adaptive to change in order to sustain their success over time.
Big Hairy Audacious Goals (BHAGs):
This chapter introduces the concept of Big Hairy Audacious Goals (BHAGs), which are ambitious, long-term goals that challenge and inspire companies. Visionary companies set these BHAGs to motivate their employees and drive progress. The authors argue that setting and pursuing BHAGs can help organizations push beyond their limits and achieve extraordinary success.
Cult-Like Cultures:
In this chapter, the authors discuss how visionary companies create strong organizational cultures that foster loyalty, commitment, and a sense of belonging among employees. These companies often have distinctive practices and rituals that reinforce their core values and beliefs, leading to a “cult-like” atmosphere.
Try a Lot of Stuff and Keep What Works:
Chapter seven emphasizes the importance of experimentation and learning from failure. Visionary companies continually try new things, learn from their mistakes, and adapt their approaches to find what works best. This culture of innovation and continuous improvement enables them to stay ahead of competitors and remain successful over time.
Home-Grown Management:
The authors highlight that visionary companies tend to promote from within and develop their own leaders. By cultivating a strong internal pipeline of talent, these companies ensure that their leaders have a deep understanding of the organization’s core values and culture. This approach helps maintain consistency and continuity in leadership, which contributes to long-term success.
Good Enough Never Is:
In this chapter, Collins and Porras discuss how visionary companies maintain high standards of performance and are never satisfied with just being “good enough.” They continually strive for excellence and push themselves to improve, which drives their ongoing success.
The End of the Beginning:
The authors emphasize that the habits and practices of visionary companies are not static but evolve over time. As circumstances change, these companies adapt and renew themselves to remain successful. The authors argue that maintaining the habits of visionary companies is an ongoing process that requires constant attention and effort.
Building the Visionary Company:
In the final chapter, Collins and Porras provide practical guidance on how organizations can apply the lessons from the book to build their own visionary companies. They offer a framework for developing a strong core ideology, setting ambitious goals, fostering a strong culture, and promoting continuous improvement. The authors stress the importance of learning from the examples of visionary companies and incorporating their habits into one’s own organization for long-term success.