Built to Last: Successful Habits of Visionary Companies (Good to Great Book 2)

by Jim Collins

Few of the visionary companies began life with a great idea. In fact, some began life without any specific idea and a few even began with outright failures.

Visionary companies pursue a cluster of objectives, of which making money is only one—and not necessarily the primary one.

how deeply it believes its ideology and how consistently it lives, breathes, and expresses it in all that it does.

Core values in a visionary company form a rock-solid foundation and do not drift with the trends and fashions of the day; in some cases, the core values have remained intact for well over one hundred years.

Only those who “fit” extremely well with the core ideology and demanding standards of a visionary company will find it a great place to work.

Visionary companies make some of their best moves by experimentation, trial and error, opportunism, and—quite literally—accident.

Visionary companies focus primarily on beating themselves.

They reject having to make a choice between stability OR progress; cult-like cultures OR individual autonomy; home-grown managers OR fundamental change; conservative practices OR Big Hairy Audacious Goals; making money OR living according to values and purpose.

including organization, business strategy, products and services, technology, management, ownership structure, culture, values, policies, and the external environment.

building a company that can prosper far beyond the presence of any single leader and through multiple product life cycles is “clock building.”

Because the great-idea approach shifts your attention away from seeing the company as your ultimate creation.

We had to shift from seeing the company as a vehicle for the products to seeing the products as a vehicle for the company.

The builders of visionary companies were highly persistent, living to the motto: Never, never, never give up.

It means spending less of your time thinking about specific product lines and market strategies, and spending more of your time thinking about organization design.

Minnesota, Mining, and Manufacturing Company (or 3M for short).

key people at formative stages of the visionary companies had a stronger organizational orientation than in the comparison companies,

instituted concrete organizational mechanisms to stimulate change and improvement.

Profit sharing and employee stock ownership produced a direct incentive for employees to come up with new ideas, so that the whole company might benefit.

Walt would die, but Disney’s ability to make people happy, to bring joy to children, to create laughter and tears would not die.

One of the most important steps you can take in building a visionary company is not an action, but a shift in perspective.

think more in terms of being an organizational visionary and building the characteristics of a visionary company.

It’s a clock based on human ideals and values. It’s a clock built on human needs and aspirations. It’s a clock with a spirit.

most of what’s required to build a visionary company can be learned.

“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.”

people, products, and profits. It was decided that people should absolutely come first [products second and profits third].

Profit is like oxygen, food, water, and blood for the body; they are not the point of life, but without them, there is no life.

“Profit,” according to Packard, “is not the proper end and aim of management—it is what makes all of the proper ends and aims possible.”

“Johnson & Johnson has succeeded in portraying itself to the public as a company willing to do what’s right, regardless of cost.”

they see it as a challenge to find pragmatic solutions and behave consistent with their core values.

authenticity of the ideology and the extent to which a company attains consistent alignment with the ideology counts more than the content

historical consistency through multiple generations of chief executives.

‘Do unto others as you would have them do unto you.’

Visionary companies tend to have only a few core values, usually between three and six.

breathing. It’s not what they believed as much as how deeply they believed it (and how consistently their organizations lived it). Again, the key word is authenticity.

The primary role of purpose is to guide and inspire, not necessarily to differentiate.

In short, a visionary company can, and usually does, evolve into exciting new business areas, yet remain guided by its core purpose.

We’ve seen subgroups in companies exert a great deal of pressure on the overall corporation by being role models from within.

consistency of principle ... that gives us direction...

Ultimately, the only thing a company should not change over time is its core ideology—that is, if it wants to be a visionary company.

In a visionary company, the drive to go further, to do better, to create new possibilities needs no external justification.

Self-criticism, on the other hand, pushes for self-induced change and improvement before the outside world imposes the need for change and improvement;

Tangible. Concrete. Specific. Solid.

translation of those intentions into concrete items—mechanisms with teeth—that can make the difference between becoming a visionary company or forever remaining a wannabe.

creating tangible mechanisms aligned to preserve the core and stimulate progress.

Big Hairy Audacious Goals (BHAGs):

Cult-like Cultures:

Try a Lot of Stuff and Keep What Works:

Home-grown Management: Promotion from within,

Good Enough Never Is: A continual process of relentless self-improvement with the aim of doing better and better, forever into the future

preserve the core and stimulate progress