Built to Last by Jim Collins – Key Takeaways
“The Successful Habits of Visionary Companies”
This book is all about companies who have outperformed their peers in the same industry whilst being exposed to the same set of external conditions.
The Myths
Firstly, a few myths which ARE NOT the source of how visionary companies were established:
- A great idea is required to start a great company
- Visionary companies need charismatic leaders
- Maximising profits is the primary reason of existance
- The ‘correct’ core values are shared between successful organisations
- Change is the ONLY constant
- Industry leading companies play it safe once they’ve obtained their status
- Everyone find visionary organisations great to work at
- Complex strategic planning result in successful companies
- Finding external candidates as CEO’s lead to positive fundamental change
- Successful organisations focus obsessively on beating the competition
- You can’t have your cake and eat it too
- “Vision statements” leads to organisations becoming visionary
Some common threads found in Visionary Companies which are lacking competitors.
Clock Building vs Time Telling
Clock build is the goal of building a company that can prosper far beyond the presence of a single leader and through multiple product life cycles.
This is in direct contrast to time telling, which is having a great idea or being a charismatic visionary leader.
‘Tyranny of the or’ vs ‘genius of the and’
Visionary companies have a growth mindset and break the traditional view of striving for two seemingly contradictory forces e.g.
- change OR stability
- conservative OR bold
- invest in future OR do well in the short term
Instead there is a strive for the ‘ genius of the and’ where they embrace extremes of a number of dimensions at the same time. e.g.
- purpose beyond profit AND pragmatic pursuit of profit
- ideological control AND operational autonomy
This is not seeking ‘balance’ but seeking success in seemingly resource (time/attention/capital) competing domains.
Irrational? Perhaps. Rare? Yes. Difficult? Absolutely.
Preserve the Core / Stimulate Progress
The ability to adapt and change over time, responding to market conditions whilst maintaining the core ideology or reason for the company’s existence. This includes:
- Having a BHAG (Big Hair Audacious Goal) which rallies the troops towards a “super goal”
- Possessing cult like qualities such fervent believers, indoctrination, elitism
- Willingness to experiment and fail fast: implement ideas quickly –> Accept mistakes and learnings –> Incremental gains –> Persistence –> Success
- Good is never enough – rejection of the idea of having a finish line, instead having an aim of ongoing improvement
Conclusion
A solid read, with some great cases and example peppered throughout the book. My biggest take-away is over-coming a mindset of preconceived barriers and limitations, which are usually disguised as ‘assumptions’ by the majority within any industry. This is the key differentiator of organisations becoming visionary, as they ‘see’ beyond what everyone can imagine is possible.
