Built to Last: Successful Habits of Visionary Companies by James C. Collins and Jerry I. Porras
By Harrison Barnes
While it has been several years since I first read Built to Last, I read the book again recently and believe that it will one day be legendary—a book that is up there with some of the all-time great business and sales books of our time. First published in 1994, the book continues to sell well more than a decade after it first came out.
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The premise of Built to Last is quite simple: there are characteristics that separate the top-performing companies in the world from the merely average ones. The book seeks to identify and study the characteristics of companies that are the "crown jewels" of their industries and the most admired companies out there—companies such as Hewlett-Packard, Procter & Gamble, 3M, American Express, Boeing, Ford, Merck, Nordstrom, Sony, Wal-Mart, and Walt Disney. The authors believe that "visionary companies" with certain characteristics are likely to be far more successful than their counterparts.
Some of the more important points of the book are as follows:
First, the authors believe that visionary companies practice "clock building and not time telling." While the authors spend a lot of time discussing this concept, essentially what they mean is that the visionary company and its leader typically concentrate on the organizational aspects of the company and creating an enduring institution.
This means that visionary companies typically do not have leaders who are concerned with their own personal aggrandizement. Instead, they tend to be most concerned with creating organizations that will endure well beyond them. In addition, they dream of creating organizations with strength that will typically become great institutions. This often means sublimating the leader's personal interests to those of the organization at all costs.
I believe that this particular portion of the book is one of the most powerful. Here, the authors argue that certain leaders in companies concentrate on the long-term objectives of their institutions instead of the short-term objectives. This particular section of the book seems especially apropos because it deals with an essential and enduring factor in many of the problems of businesses in America and throughout the world today.
Many companies and their leaders are very concerned with short-term gain. Stock options, gross compensation for CEOs, and other factors all point to this. Issues with the declining quality of certain manufacturers' goods in the marketplace as a result of a drive toward short-term rewards also exemplify this trend. The ability of a company to look toward the future and have a dream is a very positive thing.
Second, the authors believe that the best companies are about more than profits. For example, a company like Merck defines itself as being in the business of saving lives. Ford defined itself (at one time) as being in the business of providing people with transportation and jobs. The authors' point seems to be that the most successful companies out there have "souls" and are about more than profits and policies. They have purposes that motivate the people within them. A visionary profit is about more than simply making a profit.
The authors cite an example illustrating the need for a business to have a soul from Peter Drucker's book Concept of the Corporation:
The failure of GM as an institution—for failure it is—is to a large extent the result of…an attitude that one might call "technocratic"…best exemplified in Alfred P. Sloan's own book, My Years With General Motors…It focuses exclusively on policies, business decisions, and structure…It is perhaps the most impersonal book of memoirs ever written—and this was clearly intentional. Sloan's book…knows only one dimension: that of managing a business so that it can produce effectively, provide jobs, create markets and sales, and generate profits. Business in the community; business as life rather than livelihood; business as a neighbor; and business as a power center—those are absent in Sloan's world.
Collins' and Porras' discussion of the argument that a solid company must have a soul is excellent; far too few companies in this day and age have souls. In addition, far too few individual salespeople have the kinds of souls the authors describe. Being motivated by an actual purpose is powerful and can create profound improvements in a company and the careers of individual salespeople.
Third, the authors stress the importance of companies setting big goals for themselves—which they call "BHAGs" for "Big Hairy Audacious Goals." Setting massive goals is something the authors found the most visionary companies consistently did, while their less-successful counterparts did not necessarily do so. According to the authors:
A BHAG should be so clear and compelling that it requires little or no explanation. Remember, a BHAG is a goal—like climbing a mountain or going to the moon—not a "statement." If it doesn't get people's juices going, then it's just not a BHAG.
The authors also explain that the goals visionary companies set for themselves often look "audacious" to outsiders and as if they might, in fact, be impossible to achieve because they are so profound. Examples include Boeing's decision to build the 747, City Bank's (now Citibank) decision to become a major bank when it was a small bank, Sam Walton's decision to grow Wal-Mart into the world's largest retail store, and others.
This chapter about the setting of profound and massive goals makes the point that, in order to succeed on a major scale, the most successful businesses need to set major goals for themselves. This is something that also provides a good motivation for individual salespeople—if you set goals for yourself, this will motivate you to achieve them.
Fourth, the authors claim that visionary companies typically have "cult-like" cultures and that most of their management tends to be homegrown. While they cover this information over the course of two separate chapters, the authors clearly state that visionary organizations typically have well-defined cultures and generally raise their own upper management.
I liked these chapters, mainly due to the fact that they suggest that a solid and visionary organization is akin to an "organism" with a certain set of rules. This way of looking at companies suggests that certain values and social mores are acceptable at certain organizations but not at others. For example, they mention that if anyone ever swore in the presence of Walt Disney, he or she would be immediately fired from the company. They discuss General Electric's creation of its own CEOs out of people who have risen through the chain and the process. The idea that organizations are organic in nature is a very powerful theme.
Finally, along these lines, the authors claim that visionary companies typically experiment with many lines of business and make many mistakes along the way—they also are constantly seeking to improve and are never satisfied with where they are. This chapter about the need to continually improve assists the reader with understanding that a solid company never believes it has done well enough and is always seeking to improve. This lesson is equally applicable to the best salespeople—they are always working to improve their crafts.
While the authors make it clear that they are writing about companies, they also state that the lessons they teach about companies are equally applicable to individual salespeople, as well as groups within organizations. According to the authors:
We believe that every CEO, manager, and entrepreneur in the world should read this book. So should every board member, consultant, investor, journalist, business student, and anyone else interested in the distinguishing characteristics of the world's most enduring and successful corporations. We make this bold claim not because we wrote this book, but because of what these companies have to teach.
I believe that any salesperson who takes the time to read Built to Last will dramatically improve his or her sales career. While the book is about successful habits of visionary companies, it contains an equally outstanding discussion of what it takes to bring a sales career up to the very highest level. Everyone who has anything to do with sales or marketing should read and study this book.
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