Jim Collins is a business guru who has managed to find success in the financial industry. His newest book, “Built to Last,” describes and argues that there are 5 key pillars of enduring companies; strong leadership, clear purpose, focus on values, hiring for culture fit, and keeping a design ethic.
“Built to Last” is a book written by Jim Collins. It’s about how companies can be built to last and achieve the highest level of success. The book includes several case studies that are meant to show readers what it takes to build a company that will stand the test of time. Read more in detail here: good to great book.
Are you seeking for a synopsis of Jim Collins’ book Built to Last? You’ve arrived to the correct location.
After reading Jim Collins’ book, I wrote down a few significant takeaways.
If you don’t have time, you don’t have to read the whole book. This book synopsis summarizes all you can take away from it.
Let’s get this party started right now.
I’ll go through the following points in my synopsis of Built to Last: Successful Habits of Visionary Companies:
What is the purpose of Built to Last?
Built to Last looks at 18 illustrious and venerable firms to see what has allowed them to thrive for decades, if not almost two centuries.
The authors of this innovative research show how these visionary firms distinguish from their less successful counterparts via small yet compelling characteristics.
Build to Last is appropriate for all levels of business, from CEOs to normal workers, Fortune 500 corporations to start-ups and charity organizations.
This book contains timeless wisdom for followers who want to stay true to their main beliefs while continuously moving forward.
Who wrote the book Built to Last?
Jim Collins is an author, presenter, and consultant from the United States who has contributed to publications such as Fortune, Business Week, and Harvard Business Review.
Good to Great is his book, which has sold over 4 million copies.
Jerry I. Porras is an academic and business analyst. He is the Lane Professor Emeritus of Organizational Behavior and Change at Stanford University Graduate School of Business.
He is particularly interested in methods for connecting businesses with their values and fundamental purpose.
Who is Designed to Last?
Not everyone will like Built to Last. If you are one of the following folks, you may like the book:
- Anyone interested in learning how innovative businesses have been profitable for over a century.
- Anyone who wants to make their business, organization, department, or team more purposeful.
- Anyone looking for practical tools to help their business drive development, inspire innovation, and communicate ideals
Summary of the Book Built to Last
Introduction
We can learn a lot from forward-thinking businesses. Their achievements have been carefully chronicled, and they are largely recognized as the crown jewels of their respective industries. Furthermore, their success outlasts the retirement of key executives and the aging of single hit goods.
Hundreds of well-known CEOs were invited to provide names of visionary firms so that the writers may thoroughly research and learn from them. Disney, Marriott, and Merck are among the 18 most commonly named corporations.
The visionary companies were then compared to comparative companies, which were businesses with comparable goods and markets but were less often labeled “visionary” by the CEO poll, although not being outright failures.
Over the course of their lengthy lifetimes, both sets of firms were compared (the average founding date for both groups was the 1890s).
Huge volumes of data, including interviews, annual reports, financial statements, news stories, and other sources, were gathered to get a full picture of these organizations, from their ownership structures to their cultures.
Consider this: a dollar invested in these firms’ stock in 1926 was worth $6,356 in 1990. When compared to investments in comparator firms, which returned $955 and $415, respectively, the success of visionary companies shines out.
Lesson 1: Visionary companies consistently create incredible products and leaders.
Great ideas, many think, are required for a visionary firm to prosper.
Sony, on the other hand, was formed with no clue what things it would produce. After forming the firm, the founder arranged a brainstorming session to examine business ideas. From sweetened bean paste to miniature golf equipment, he had a lot of ideas.
Bill Hewlett and Dave Packard started Hewlett-Packard (HP) without having a precise plan in mind. Automatic urinal flushers and bowling foul-line indications were among their ludicrous and comical suggestions.
Great ideas don’t seem to be a need for starting a visionary business.
Neither are high-profile, charismatic leaders. Leaders of visionary companies were extraordinary, but they were also humble, reticent, and down-to-earth individuals.
What are their chances of long-term success? Despite having outstanding ideas and good leadership, comparative firms ultimately lost behind visionary firms. But why?
The visionary firms analyzed consistently developed exceptional ideas and leaders by focused on growing themselves into extraordinary organizations. The firm was the founders’ true brainchild, always developing independently of any one individual or concept.
Consider a clock on the wall. You may view the time as if you were staring at a clock when you have an idea or are a visionary leader. When you establish an organization that consistently generates outstanding ideas and leaders, it’s analogous to constructing your own clock: a dependable mechanism.
A visionary business is like a machine that is always producing excellent goods and leaders.
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Lesson 2: Visionary businesses prioritize basic values above income, yet they nevertheless succeed.
Visionary businesses exist for a greater purpose than merely making money. These timeless ideas are the tenets that drive every choice they make, just like the “truths” in the American Declaration of Independence influence generations of American businesses.
A good example is Johnson & Johnson (J&J), a pharmaceutical company. The company’s CEO, Robert W. Johnson Jr., outlined the company’s core values in a document called “Our Credo” in 1935, which outlined the company’s responsibilities: first to their customers, then their employees and so on.
After all of the other tasks were completed, Johnson suggested that stockholders should get a “fair return.”
Furthermore, the majority of the visionary firms evaluated were not mainly concerned with profit. Regardless matter how mushy or utopian certain ideals may seem, innovative firms have managed to create money without ever straying from their primary ideologies.
Core ideas are important not just when visionary firms thrive, but also when they face challenges. Instead of putting out fires in the 1980s, Ford’s management team spent time clarifying and discussing what the firm stood for and how it might represent the principles of its founder. General Motors, Ford’s competitor, did not follow suit.
Even while all visionary businesses have a common idea, their substance differs widely. The presence and practice of a real ideology are more important than its substance.
Profits may not be the most motivating factor for innovative businesses, yet they nonetheless thrive.
Lesson 3: A visionary business encourages development and progress by adhering to its fundamental values.
Even as they carefully defend their underlying principles, visionary firms succeed because the manifestations of those ideals remain open to change and advancement. Wal-corporate Mart’s philosophy is to “beyond customer expectations,” however customer greeters at its doors are a variable.
Similarly, Boeing’s underlying philosophy is to be an aviation pioneer, but constructing jumbo planes is an expression of that ideology that may be altered.
Visionary firms exhibit their readiness to resist the “tyranny of the OR,” in which organizations must choose between adhering to their basic ideals and pushing growth, by displaying this flexibility. Visionary firms, on the other hand, use the AND – experimentation and development – to stay faithful to their essential ideals.
While visionary firms are led by their basic principles, they are also committed to continuously improving their goods, businesses, and organizations. Companies with a vision never get complacent.
“Constructively accomplish things until it’s time to die,” Willard Marriot, the Marriott Corporation’s founder, declared. “Make every day count, right up to the end.” This may seem pessimistic, yet it demonstrates a desire to improve.
Visionary firms, like their underlying beliefs, are motivated by a desire for advancement. Setting lofty objectives and putting in place tangible measures to push individuals to innovate and develop are both critical to growth.
Visionary businesses stick to their basic values while they strive for advancement and improvement.
Lesson 4: Visionary firms are known for using bold objectives to inspire growth.
BHAGs (big hairy audacious goals) are often made by visionary firms to which they fully commit. Outsiders may find many BHAGs unrealistic, particularly if they are very ambitious. They’re also specific and concrete enough to keep the company engaged and enthusiastic.
A non-corporate BHAG is John F. Kennedy’s pledge in 1961 that America will send a man to the moon and back by the end of the decade. At the time, this seemed like a ludicrous commitment, but it did start the US moving ahead.
Throughout its history, Boeing has accomplished several BHAGs, notably the creation of the 747 airliner. Boeing pursued their aim with zeal, never contemplating the potential of defeat.
Because the jet’s sales fell short of projections, the CEO declared that the plane would be completed even if it cost the firm everything. And that’s precisely what happened: around 86,000 people were laid off as a consequence, accounting for nearly 60% of the workforce.
The Computer Tabulating Recording Firm’s founder, Thomas J. Watson Sr., established a BHAG by rebranding the company to reflect his aim to become a worldwide platform for coffee grinders and butcher scales. At the time, changing the company’s name to International Business Machines (IBM) was a bold move.
BHAGs have a habit of taking on life of their own. Even after Kennedy’s death, the innovative firms surveyed continued to pursue their BHAGs with new CEOs and directors. Once a BHAG was met, new BHAGs were established, always in keeping with the company’s fundamental value.
At visionary firms, big hairy ambitious objectives stimulate development.
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Lesson 5: Recruiting into a visionary company is almost cult-like — either they prosper or they go.
Because of their adherence to their basic principles, visionary firms’ corporate cultures resemble cults. Many firms urge new employees to spend the majority of their time socializing with coworkers and to maintain secrets about the company’s inner workings.
Employees are often engulfed by a company’s basic concept. Consider the IBM training program, in which prospective executives would rise and perform songs from the IBM songbook:
“With I.B.M., march on!”
Work together…”
Employees at Disney were expected to exemplify the company’s basic philosophy of pure family pleasure. Men with facial hair were not hired at the theme parks, and anybody caught using four-letter curses in front of Walt Disney was dismissed instantly — without exception.
Those who fail to reach their high expectations or standards are not welcome in visionary businesses. New workers often either fit in well and succeed, or perform poorly, get dissatisfied, and quit the firm fast. On this topic, visionary businesses make no concessions.
Employees that stick to the company’s basic ideas might be granted the freedom to experiment as a consequence of their confidence and ability to follow the company’s philosophy. It also avoids the groupthink that is prevalent in many cults and inhibits advancement.
It’s worth noting that visionary businesses aren’t led by charismatic founders or CEOs, but rather by their underlying ideals. Charismatic people might be enthusiastic about their profession, but when they depart, their “cults” tend to collapse.
In visionary groups, new members either succeed or depart, much like a cult.
Lesson 6: Visionary companies develop exceptional leaders.
At one point or another, visionary firms have had excellent CEOs lead them, but what is even more astonishing is how regularly they have generated leaders of such high quality.
Efforts were taken to nurture management talent inside the business to guarantee that future leaders were in accordance with the company’s basic principles. Similarly, visionary firms assure leadership continuity with a well-timed succession strategy.
One example is GE, which has unquestionably been led by the renowned Jack Welch. Because of its strong focus on internal management training and CEO succession, GE has had a century of Welch-caliber CEOs.
GE graduates are more likely than any other business to hold top positions in American companies. When it comes to Welch, he lay out his succession plan seven years before stepping down, however it seems to be a last-minute gesture when contrasted to Bob Galvin, the former CEO of Motorola, who sketched out the company’s next generation 25 years ago.
On the other hand, comparison businesses sometimes chose outside CEOs who were inexperienced with the company and who frequently led it in very unexpected ways. Furthermore, the CEOs of comparative businesses were often near-tyrannical and did not participate in succession planning, creating a significant leadership vacuum once they departed.
There have even been CEOs at comparison firms who intentionally destroy possible prospects and obstruct succession planning. When the CEO departed, the struggling firm began to fail.
High-calibre executives are consistently produced by visionary firms.
Lesson 7: Visionary businesses encourage evolutionary growth by promoting innovation.
Small changes in a species are introduced to it, and the stronger forms survive, according to the Darwinian theory of evolution. Within the enterprises analyzed by visionary companies, a similar evolutionary process must be pushed.
As the firm pushed its workers and management to take risks, some of the innovative ideas, products, and processes they explored were huge successes.
J&J’s famous Band-Aids are a good example. When an employee bandaged his wife’s fingers with surgical tape and gauze after she accidentally cut herself with a kitchen knife, he came up with the idea for the product.
After he pitched the idea to the company’s marketing staff, Band-Aid goods became the company’s most popular category.
Consider 3M, which encouraged its workers to dedicate 15% of their work time to personal pursuits. The renowned Post-It Note was born out of two unique initiatives by two different workers. 3M would not have succeeded if its workers had not been encouraged to try new things and permitted to keep working on their pet projects even if early market research turned out to be unfavorable.
Norton, 3M’s comparator firm, on the other hand, opposed the exploration of alternatives outside of the business’s conventional product categories.
In business, some – and even most – variations fail. Evolution is no different. Some of J&J’s products were very prominently flawed as well, for example, its colorful casts for children with bone fractures. In no time, the casts had transformed hospital bed sheets into something resembling modern art and there was chaos in the hospital laundry rooms.
Failure is an inevitable cost of development, and it should not be penalized to deter future research, according to visionary businesses.
Visionary businesses embrace innovation in order to promote evolutionary advancement.
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Lesson 8: Forward-thinking firms don’t simply speak about their principles; they act on them.
Many firms pretend to be idealistic, support innovation, and welcome ongoing change, yet in actuality, virtually nothing occurs. The visionary organizations investigated were able to turn their principles into reality by putting in place specific processes that affected workers’ everyday lives and choices.
“We want our staff to innovate,” 3M didn’t simply say. Instead, it developed a number of methods to stimulate innovation, including letting staff to spend 15% of their time on personal projects and requiring that 30% of sales originate from goods that are less than four years old.
Rather than promising constant development, forward-thinking organizations built methods to achieve it. Wal-Mart, for example, used “Beat Yesterday” ledgers to encourage ongoing development by comparing daily sales to the prior year.
Hewlett-Packard implemented a rigorous rating procedure of its workers to avoid people who acquired high status from coasting on their success.
In the long term, ambitious businesses also took actual steps. Their investments in new technology and business methods, as well as training and growing their human resources and supporting research and development, vastly outnumber those of competitors.
Merck, for example, patterned its laboratories like university ones and permitted its researchers to publish their results in academic publications, which was unprecedented for a commercial corporation at the time. It also resolved that, unlike many other firms, product development should be driven by research rather than marketing. Merck’s laboratories started to recruit prominent scientists as a consequence.
A forward-thinking organization does more than speak about its principles; it lives them.
Final Thoughts
Visionary firms achieve amazing success by remaining committed to their basic ideals while persistently seeking development.
A company’s fundamental philosophy encompasses not just its basic beliefs but also its mission, or why it exists beyond earnings or shareholder value. Visionary firms complement their basic philosophies and promote continual improvement by setting big targets and building grassroots systems to implement their strategies.
Additional Reading
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