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Built to Last, Successful Habits of Visionary Companies (Paperback)
by Jim Collins, Jerry I. Porras
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Management, Leadership, Corporate excellence, Business |
| Market price: ¥ 198.00
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| MSL Pointer Review:
A ravishing look at current management practices, this book shows timeless principles that separate the great from the good. |
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Author: Jim Collins, Jerry I. Porras
Publisher: Collins
Pub. in: August, 2002
ISBN: 0060516402
Pages: 368
Measurements: 8.0 x 5.3 x 0.9 inches
Origin of product: USA
Order code: BA00014
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- Awards & Credential -
A business classic, a bestseller that has sold 3.5 million copies worldwide, been translated into 16 languages, gone through more than 70 printings and had been nearly 5 solid years on the BusinessWeek best-seller list. |
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- MSL Picks -
Now celebrating the 10-year anniversary of its unheralded publication in 1994, BTL has sold 3.5 million copies worldwide, been translated into 16 languages, gone through more than 70 printings, and spent nearly 5 solid years on the Business Week best-seller list. The momentum continues even today: HarperBusiness, its publisher, is putting out a new hardcover edition in January 2005. Along with Collins's later solo effort, Good to Great: Why Some Companies Make the Leap… and Others Don't, BTL has turned Collins, a rock-climbing 46-year-old, into the Bill Clinton of the business world, a guy who gets stopped on the street and begged for advice (or an autograph) and who is a riveting speaker, pulling $55,000 per session. "It never occurred to me that things would be this successful," says Collins. "It never occurred to me."
This book reminds me of the hero in the classic Greek tragedy. The hero is always magnificent, but has a tragic flaw. This is a magnificent book with a tragic flaw.
Porras and Collins set out to write a book about visionary companies, and they did just that. They chose the companies they would study based on specific, detailed criteria.
They wanted to study companies that had been premier institutions in their industries and widely admired while they made an imprint on the world around them. They wanted their companies to have multiple generations of chief executives and to have gone through multiple product or service lifecycles. And they wanted the companies to have been around for a long time - founded before 1950.
They compared each of their visionary companies with another company that was not a premier visionary company. Many of the comparison companies were solid performers. They were good companies, but not great companies. That's one of the great things about the book. You can see the distinction between good performance and great performance.
Another thing that makes the book great is the extensive research. The project took six years, and the authors and their research team dug into critical issues and came up with fascinating insights and comparisons.
Read this book and you will learn about the characteristics of great companies that have an impact on the world around them. The discussions will enrich your understanding of what makes a great company. This will be especially valuable to you if you're in the process of building a company that you want to be great.
That's the great part, the hero part. What about the flaws?
The first flaw is that essentially performance for each of these companies is equated with market performance. There are lots of things the authors could have used, such as return on assets, for example. But share price is easy to track over time and is used as a surrogate for greatness. I'm not sure that that's the best criterion.
What you are actually reading about is a selection of excellent, visionary companies that were perceived as good investments by the market. This "perception" issue is not addressed in the book.
The second flaw is more important. While this book tells you marvelous things about companies that are admittedly great and about some of the things that make for greatness in companies, and while it mixes statistical data with telling anecdotes, it falls short in one critical area. The book doesn't tell you anything about how to achieve greatness.
In other words, it describes what greatness might be and it gives you some examples of companies who have achieved it, but the book ultimately left me with the nagging desire that the authors would have given me some "how to." As far as you can tell from reading the book, these companies were always great.
That may not be a problem for you if you're just starting a company. You've got a clean slate to start from. But if you're guiding an already-established company, or a part of it, I think you'll wish for a few examples of companies that became great after performing at some lesser level.
That's the bottom line in my recommendation. If you're looking for a book that describes greatness and where you'll pick up a wealth of ideas and good historical knowledge about great companies, buy this book. If, on the other hand, what you want is a book that describes in some detail how to achieve that greatness, this may not be the book for you. (From quoting Walter Bock, USA)
Target readers:
Executives, managers, entrepreneurs, government and nonprofit leaders, professionals and MBAs.
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Good to Great, Why Some Companies Make the Leap…and Others Don't
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Jim Collins has authored or co-authored four books, including Built to Last and Good to Great. Driven by a relentless curiosity, Jim began his research and teaching career on the faculty of Stanford’s Graduate School of Business, where he received the Distinguished Teaching Award. In 1996, he returned to his hometown of Boulder, Colorado, to found his management laboratory, where he conducts research and works with leaders in the corporate and social sectors. More about Jim and his works can be found at his e-teaching site, where he has assembled articles, audio clips, a recommended reading list, discussion guide, tools, and other information. The site is designed to be a place for students to study and learn.
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From the Publisher
Drawing upon a 6-year research project at the Stanford University Graduate School of Business, Jim Collins and Jerry I. Porras took 18 truly exceptional and long-lasting companies and studied each in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day – as start-ups, as mid-sized companies, and large corporations. Throughout, the authors asked: “What makes the truly exceptional companies different from the comparison companies and what were the common practices these enduringly great companies followed throughout their history?”
Filled with hundreds of specific examples and organized into a coherent framework of practical concepts that can be applied by managers and entrepreneurs at all levels, Built to Last provides a master blueprint for building organizations that will prosper long into the 21st century and beyond.
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This is not a book about charismatic visionary leaders. It is not about visionary product concepts or visionary market insights. Nor even is it about just having a corporate vision.
This is a book about something far more important, enduring, and substantial. This is a book about visionary companies.
What is a visionary company? 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. The key point is that a visionary company is an organization - an institution. All individual leaders, no matter how charismatic or visionary, eventually die; and all visionary products and services-all "great ideas" - eventually become obsolete. Indeed, entire markets can become obsolete and disappear. Yet visionary companies prosper over long periods of time, through multiple product life cycles and multiple generations of active leaders.
Pause for a moment and compose your own mental list of visionary companies; try to think of five to ten organizations that meet the following criteria:
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 Founded before 1950 Examine your list of companies. What about them particularly impresses you? Notice any common themes? What might explain their enduring quality and prosperity. How might they be different from other companies that had the same opportunities in life, but didn't attain the same stature?
In a six-year research project, we set out to identify and systematically research the historical development of a set of visionary companies, to examine how they differed from a carefully selected control set of comparison companies, and to thereby discover the underlying factors that account for their extraordinary long-term position. This book presents the findings of our research project and their practical implications.
We wish to be clear right up front: The "comparison companies" in our study are not dog companies, nor are they entirely unvisionary. Indeed, they are good companies, having survived in most cases as long as the visionary companies and, as you'll see, having outperformed the general stock market. But they don't quite match up to the overall stature of the visionary companies in our study. In most cases, you can think of the visionary company as the gold medalist and the comparison company as the silver or bronze medalist. We chose the term "visionary" companies, rather than just "successful" or "enduring" companies, to reflect the fact that they have distinguished themselves as a very special and elite breed of institutions. They are more than successful. They are more than enduring. In most cases, they are the best of the best in their industries, and have been that way for decades. Many of them have served as role models -icons, really - for the practice of management around the world. (Table 1. 1 shows the companies in our study. We wish to be clear that the companies in our study are not the only visionary companies in existence. We will explain in a few pages how we came up with these particular companies.)
Yet as extraordinary as they are, the visionary companies do not have perfect, unblemished records. (Examine your own list of visionary companies. We suspect that most if not all of them have taken a serious tumble at least once during their history, probably multiple times.) Walt Disney faced a serious cash flow crisis in 1939 which forced it to go public; later, in the early 1980s, the company nearly ceased to exist as an independent entity as corporate raiders eyed its depressed stock price. Boeing had serious difficulties in the,mid-1930s, the late 1940s, and again in the early 1970s when it laid off over sixty thousand employees. 3M began life as a failed mine and almost went out of business in the early 1900s. Hewlett-Packard faced severe cutbacks in 1945; in 1990, it watched its stock drop to a price below book value. Sony had repeated product failures during its first five years of life (1945-1950), and in the 1970s saw its Beta format lose to VHS in the battle for market dominance in VCRs. Ford posted one of the largest annual losses in American business history ($3.3 billion in three years) in the early 1980s before it began an impressive turnaround and long-needed revitalization. Citicorp (founded in 1812, the same year Napoleon marched to Moscow) languished in the late 1800s, during the 1930s Depression, and again in the late 1980s when it struggled with its global loan portfolio. IBM was nearly bankrupt in 1914, then again in 1921, and is having trouble again in the early 1990s. Indeed, all of the visionary companies in our study faced setbacks and made mistakes at some point during their lives, and some are experiencing difficulty as we write this book. Yet-and this is a key point-visionary companies display a remarkable resiliency, an ability to bounce back from adversity.
As a result, visionary companies attain extraordinary long-term performance. Suppose you made equal $1 investments in a general-market stock firm, a comparison company stock fund, and a visionary company stock fund on January 1, 1926.
Table 1.1 The companies in our Research Study
Visionary Company
3M
American Express
Boeing
Citicorp
Ford
General Electric
Hewlett-Packard
IBM
Johnson & Johnson
Marriott
Merck
Motorola
Nordstrom
Philip Morris
Procter & Gamble
Sony
Wal-Mart
Walt Disney
Comparison Company
Norton
Wells Fargo
McDonnell Douglas
Chase Manhattan
GM
Westinghouse
Texas Instruments
Burroughs
Bristol-Myers Squibb
Howard Johnson
Pfizer
Zenith
Melville
RJR Nabisco
Colgate
Kenwood
Ames
Columbia
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Kevin Maney, USA
<2006-12-20 00:00>
One of the most eye-opening business studies since In Search of Excellence. |
Mathew Hunter , USA
<2006-12-20 00:00>
Built to Last by James C. Collins and Jerry I. Porras is an essential guide for any new or old organization looking to get started or revitalize its fundamental foundation and business practices. Assembled as a result of a six year long study examining eighteen remarkable and long-lasting companies in relation to each companies top "market" competitor, this book genuinely shows what distinguishes truly visionary companies from the rest. This books begins by briefly describing what visionary companies were chosen for the study and why. For those interested, visionary companies included organizations such as Wal-Mart, American Express, IBM, and Walt Disney, just to name a few.
According to Collins and Porras, a visionary company can neither be founded on a single great idea nor rely on an individual charismatic leader. Those in a visionary company must be willing and able to put the organization first in order not only to make an impact after the death of any individual leader but also to stand the test of time. Essential in any visionary company is a statement of what the company stands for and why it exists - its core ideology consisting of its core values and core purpose. For example, a company must exist for a number of reasons beyond just making money. Along with this statement of core ideology must come a plan for action, a plan to stimulate and drive progress in an organization toward an envisioned future. A key concept from this book is preserving the core of an organization while stimulating progress within that organization. Change in an organization is a constant with respect to everything but the organization's core ideology.
A visionary organization can stimulate progress in a number of ways from setting BHAGs or Big Hairy Audacious goals, to creating and promoting a cult-like culture within the organization, to trying a lot of stuff and keeping what works, and finally, to relying on homegrown management. In a visionary company, good enough never is, there is never an end to the movement for continual progress, and every member in the organization is a key player encouraged to take personal initiative. A visionary company is a great place to work if and only if you strongly agree and adhere to its values and purpose.
This book was not only insightful, but it provided the steps necessary for any organization to take strides toward becoming a visionary company. Although information at times was repetitive, it proved useful in hammering home key concepts crucial to understanding what makes a visionary company truly visionary. The book was an easy read, and the authors were quick to point out that this book is not the "ultimate truth" when it comes to understanding organizations. I would recommend this book to anyone. It is worth a read, and definitely worth the money! |
Kent, USA
<2006-12-20 00:00>
As shared before, my review methodology is to give a book some time so I can accurately comment to the degree of which it impacted my life. In the case of "Built to Last," I am writing a review a full 3 years after completing this most excellent book.
I am not exaggerating, then, when I say that this is among a select group of the most powerfully influential business books I've read. There is something about the methodology, the way the conclusions are presented, that makes it stand out as an excellent read. The content is, as some would say, quite "sticky."
Take, for example, their selection criteria for what constitutes an "Visionary Company." The company had to be in business something like 60 years, so they can see how a culture had "outgrown" their genesis business model (think about that!!!). They had to be outstanding market leaders, so there is some tie to the bottom line, and so on. Personally, these metrics have become ingrained, such that I repeatedly find myself gauging where my organization is relative to these metrics.
Secondly, the book expands upon each attribute of a "visionary company," such as having "big hairy audacious goals (BHAG's)," or having what some call a "cult-like culture." Each section expands upon each with direct examples of how the identified companies espouse these attributes.
For example, there is much discussion on how firms such as Boeing is famous of undertaking aggressive projects (BHAG's), or how Nordstrom's culture is so powerful it's akin to oil and water (the right people just fit; the wrong people are self-ejected).
I have found it fascinating, however, to watch the featured companies since completing the book. HP, for example. Why in God's name would HP chose to get into the PC business? This barely appears to align with "The HP Way." And for a while it appeared that Boeing no longer attacked BHAG's when they rejected the notion of a super-sonic passenger airliner, although their involvement in the Joint Task Force Fighter project certainly appeared in-line with their culture.
Finally, I have noted many books whose authors were influenced by this book. Either the book itself was directly referenced, or the ideas were clearly gained from its reading. My recommendation: buy it and read it. I doubt you will ever forget it. |
Ben Rossen, USA
<2006-12-20 00:00>
This is an inspiring book, and informative. It answers the "what" question convincingly. I missed answers to the "why" questions. Why, for example, are successful visionary companies characterized by their emphasis on ethical standards? There are many possible explanations: the staff of the company are inspired by the ideals and give more to their employer; the companies reap payoffs in the long term from grateful recipients of their honorable deeds; the companies acquire a good reputation which increases sales and hence profits. More interesting, is the question of the logic of ethics in the business game - not even touched by these authors.
According to Jim Collins and Jerry Porras, it does not matter what the company ideology is, as long as it is passionately believed by the management and employees. I find this a dubious claim, and not supported by the data. The ideological frameworks of the companies that were studied are not interchangeable, not for the trivial reason that the ideology of another company happens not to be the one believed by each of them. Boeing is unlikely to spend money on a program to cure river blindness in Africa. Why does Merck do this? Clearly, a pharmaceutical firm does well to invest in a reputation for medical generosity that flows from a passion for making people well? Merck is purchasing precisely the trust that pays-off in the medical market place. Trust reduces transaction costs, and in some cases is almost as good as a monopoly. Boeing, on the other hand, must buy a brand name attached to their dedication to engineering excellence. It does matter what companies are passionate about.
My company operates on the Internet. Our pledge includes the words: "The tragedy of the commons is the propensity of users to take more from the commons than they give. We undertake to contribute more to the commons than we take. Our presence shall make the Internet safer, more useful and greater fun." Why is this a suitable ideology for our company? The answer is not that this is one we happen to believe in, and feel passionate about - although we do. Rather, this ideology is strategically fitting. We enhance to our brand name, and therefore the value of our software, by adding our reputation to the web applications we write.
In one of our daughter businesses we are a broker of information from merchants to consumer (information about products that are available) and from consumer to merchant (we generate real time demand curves for a large range of commodities). We have pledged not to become a trader. Why? In ethical terms, we should not be a trader because our insider information would give rise to conflict of interest. The trust that we gain by not being a trader, and hence remaining a disinterested supplier of market information, enables us to broker agreements with reduced transaction costs between the parties on the Internet. The advantage is large. It is on the Internet commons that trust is scarce. We are able to purchase this by foregoing some potentially profitable trades, and that pays us more in the long term in our role as an information service provider.
Our ideology was designed to give us the greatest possible strategic advantage in our markets. That is not to say we do not believe in our ideals, but that the nature of our ideology is important. It does matter what we believe. It matters what you believe, and it matters that you understand that it matters.
I strongly recommend The Modern Firm by Roberts. Read this alongside Built to Last. Roberts is a harder read, but he gets under the logic of corporate dynamics better than Collins and Porras. Because Built to Last is characterized by an ubiquitous analytical paucity, Jim Collins and Jerry Porras's interpretations of their data are not always correct. That is a pity. Their findings are exciting, inspiring even, and the book despite its limitations is a good read. |
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