My Review 5/5

Also recorded in 2004, years after the initial book came out, written first it is the ‘sequel’ to Good to Great. This book focuses on companies that have endured over the long haul and become a fabric of the american consciousness. Think 3M, P&G, WalMart. These ‘great’ companies are classified as ‘visionary companies’ and aren’t marked by trouble-free pasts, but persistence.

Myth: Great companies are founded by Great Ideas. (Good to Great concept: first who then what).
Companies founded with a great idea can become too attached to the idea instead of having a passion of delivering value outside the organization. Organizations don’t have one charismatic leader, but rather a group of people that tackle b-hags (big hairy audacious goals). B-hags need to get the “juices flowing”. They should stand on their own since they often transcend leaders. Think moon mission, JFK set the goal in 1961, was assassinated in 1963 and we still made it to the moon before the decade was out.

Myth: Great companies require a strong charismatic leader. (Good to great concept: genius with helpers fallacy)
In the research strong leaders were negatively correlated with visionary companies. These strong leaders would often give no thought to talent grooming or succession planning. This works only so long as the ‘genius’ is in charge of the company. See related concept “Building a clock vs telling time” below.

Great companies are founded with goals broader than making profit. Often great companies will undergo projects that benefit mankind but might not have a direct bottom dollar ROI. These are done because they fit the core mission of the company. Merck and J&J were founded to alleviate the ills of mankind. Merck took to market and gave away a drug that causes river blindness because “it would demoralize the scientist if all they worked for was profit”. Once b-hags are accomplished they should be replaced with more b-hags or companies will plateau with “we’ve arrived” syndrome.

Concept: Build a clock, not time telling
A genius leader can tell the time, but great leaders build a companies with tangible mechanisms that will persist long after their departure. Key concept here is to introduce tangible mechanisms that keep the process going in a positive direction. P&G introduced an internal ‘brand’ structure that ensured divisions did not rest on their laurels. Other companies had mechanisms that ensured the “we’ve arrived” mentality did not settle in. By this process these companies are NOT comfortable places to work.

Concept: Preserve the core, AND stimulate progress.
Yin and Yang of business is pragmatism with realistic. Dump the tyranny of the ‘or’. Embrace the power of ‘and’. Not short term gain OR long term value, both. Identify the core ideologies of the company, change everything else. Values/Ideology should be clear and easily communicable. This is something that founders often “feel” is core to their beliefs. (Good to great concept: Stockdale paradox. The undying belief you will prevail combined with facing the brutal facts of reality).

How does this fit with having a single hedgehog concept? There are two types of hedgehogs. Process driven, concept driven. Be the best at a manufacturing process (Gillette) or be the best at innovation (3M). Internally succession planning is crucial element of ensuring leadership continuity. The “doom” loop is introduced here (Good to Great concept opposite of The Flywheel). The doom loop is failure, followed by crises, followed by search for external savior. External savior brings in his own people, highly talented core people leave further weakening the company.

The core concept in Built to Last is “preserve the core, stimulate progress”. Creating a meaningful company is about having a strong vision, identifying a core purpose, a reason why your business exists besides maximizing shareholder profits. In fact many of the built to last companies identify shareholder profit as a priority, but not the most important priority. Core values, with a clear defined purpose needs to be instituted down the entire organization. This cannot be fake, people know fake when they see it. The findings indicate the single most important decision is staffing an organization with high caliber people who are driven to continuously improve.

Date Read

2016/03/25

Date Added

2016/05/31

Goodreads book information

Built to Last CD: Successful Habits of Visionary Companies by James C. Collins

https://www.goodreads.com/book/show/1217643

Bookshelves: business

Author’s Note

Initial md Generated using https://github.com/jsr6720/goodreads-csv-to-md

James C. Collins, Built to Last CD: Successful Habits of Visionary Companies, Jerry I. Porras HarperAudio 2004 (Audio CD)1

Significant revisions

tags: 2016, book, review, Collins, business

  • Apr 22nd, 2024 Converted to jekyll markdown format and copied to personal site
  • Mar 25th, 2016 Originally published on goodreads

EOF/Footnotes

  1. ISBN: =”0060589051” ↩