Built to Last: Successful Habits of Visionary Companies

Built to Last: Successful Habits of Visionary Companies, Jim Collins and Jerry Porras, (New York: William Collins, 1994).

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Built to Last Synopsis

In this book, authors Jim Collins and Jerry Porras attempt to answer the key question “What makes truly exceptional companies different from other companies?” After researching 18 companies with inception dates going back as far as 1897, the authors share their insights as well as debunk a few key myths. By synthesizing their insights with examples, the authors distill down what are true management principles versus management trends. For them, a visionary company is a “premier institution in their industries, widely admired by their peers for having a long track record of making a significant impact on the world around them.”

Key Ideas from Built to Last 

Key Idea #1: Preserving Core Ideology

At the heart of a visionary company is the preservation of its core ideology. This means that beyond products and even people, the company holds onto its core value systems. It may forego profits to allow the organization to develop this system. The authors view this as akin to clock building; while products and leaders may leave, the core ideology remains intact. With that, the organization must be willing to change anything and everything about it except its core ideology in order to adapt to evolving environments.

Key Idea #2: Big Hairy Audacious Goal

Also known as BHAG, the idea behind this is that organizations must take risks by setting super goals e.g. being the first to do something. By doing so, the organization sparks the type of team spirit that rallies all members around a single vision. As a result, leaders at visionary organizations exhibit a high commitment to the super goal, despite their own comfort zones.

An example to illustrate this is Boeing’s entry into the commercial jet space. While their competitor, Douglas Aircrafts, erred on the side of caution, Boeing made a huge bet in commercial aviation. This secured them the spot of being the leading commercial jet provider with their famous 747.

Key Idea #3: Cult-like Cultures

For visionary companies to thrive and endure, a cult-like culture must be present. This is where employees embody the values of the organization. With that said, this type of company is not for everyone. Those who typically reject indoctrination, fervently held ideologies and elitism are not likely candidates for this company. There is also an element of tightness of fit. The more alignment there is between employees and the values of the company, the more likely the company will endure.

Additionally, visionary companies tend to promote from within. This ensures alignment between the leader and the company’s ideology and will be able to preserve the core. In their research, the authors only found that 4% of visionary companies hired CEOs from outside the organization.

Key Idea #4: Trying New Things

Visionary companies are known for leveraging experimentation and trial and error to support their strategy. Rather than using exhaustively detailed planning, experimentation can lead to discoveries that can become winners for the organization. For visionary companies, this belief of experimentation supports progress.

Key Idea #5: Consistent Innovation

Finally, visionary companies hold a belief that good is not good enough. Their benchmark and comparison are not their competitors. Instead, visionary companies strive to be the best and want to constantly improve. They ask the question “how can we do better tomorrow than we did today?” This type of attitude enables the organization to constantly reinvent itself for the better.

Key Idea #6: Myths Debunked

In addition to outlining their core beliefs of visionary companies, the authors also dispel some commonly held beliefs. A few of the myths that are debunked include:

  • You need a great idea to start a company.
  • Visionary organizations need charismatic leaders.
  • Visionary companies’ primary objectives are to maximize profits.
  • Beating their competitors is all visionary companies want to do.
  • Hiring a CEO from outside the organization is the best way to spark life and change.

In fact, most, if not all, of the authors’ research refutes many of these claims. Instead, they chalk up most of these claims as management trends and fads.

Built to Last Key Takeaways

  • Visionary companies are in the work of building and preserving a core ideology that endures the test of time.
  • The goals of visionary companies are usually BHAG; they are not bound by the constraints of setting goals in comparison to competitors or adopting an attitude of trade-offs.
  • Organizational alignment nearing a cult-like culture is necessary for visionary companies to thrive.

Built to Last Authors: Jim Collins and Jerry Porras

Jim Collins a best-selling author and researcher. He has spent his career working and researching businesses. After a career in management consulting, he returned to his alma mater, Stanford, to complete his Master of Business Administration. A few years later he would join the faculty there, earning him the 1992 Distinguished Teaching Award.

Jerry Porras is a Professor Emeritus at the Stanford University Graduate School of Business. During his tenure, his research focused on organizational theory and organizational change. In addition to teaching, Porras also served as the Associate Dean for Academic Affairs at GSB.

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Professional Leadership Institute (PLI) is an educational website providing professionals from all types of businesses with practical leadership education. To keep evolving your leadership toolkit, additional PLI resources below will be useful:

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