Built to Last by Jim Collins examines 18 extraordinary and venerable companies to discover what has enabled them to prosper for decades, or even almost two centuries.
In this groundbreaking study, the authors demonstrate the simple but inspiring differences that set these visionary companies apart from their less successful competitors.
Build to Last is designed for every level of every organization, from CEOs to regular employees, and from Fortune 500 companies to start-ups and charitable foundations.
This book reveals timeless advice for followers who wish to stick to their core ideology while accelerating progress relentlessly.
You may be wondering if you should read the book. This book review will tell you what important lessons you can learn from this book so you can decide if it is worth your time.
At the end of this book review, I’ll also tell you the best way to get rich by reading and writing.
Without further ado, let’s get started.
Built to Last Book Summary
Lesson 1: Recruitment into a visionary organization is almost like membership in a cult: Members either succeed or leave.
The corporate cultures of visionary organizations resemble cults in their devotion to the core ideologies of the organization. In many organizations, new hires are expected to spend most of their time getting to know their colleagues and are strongly discouraged from divulging sensitive information.
Employees are often completely immersed in the company’s guiding philosophy. Take, for example, the training program at IBM, where prospective IBM managers stand on stage and sing songs from the IBM songbook:
“March forward with I.B.M.,
Disney’s core ideology was wholesome family fun, and the company expected its employees to live up to that ideal. No bearded men were hired at the parks, and anyone who cursed in front of Walt Disney was fired on the spot.
Visionary companies have no place for people who can’t live up to their high standards. It’s common for new employees to either fit in well and be successful, or to perform poorly, be dissatisfied, and leave the company quickly. The forward-looking companies don’t compromise on this point.
Employees who’ve confidence in themselves and their ability to uphold the company philosophy are rewarded with more freedom to experiment. Development is encouraged by preventing the groupthink that characterizes many cults.
It’s the core ideologies of an organization, not its founders or directors, that make it a visionary. It’s not uncommon for charismatic people to be deeply invested in their work, but once they leave, their “cults” quickly fall apart.
Like cults, newcomers to visionary organizations either succeed or fail.
Lesson 2: A company’s vision is reflected in the caliber of its leaders.
The remarkable thing about visionary companies is not only that they have been led several times by outstanding CEOs, but also that they have consistently produced leaders of such high caliber.
Efforts have been made within the company to develop management talent to produce leaders who share the company’s guiding principles. Similarly, forward-thinking companies always have robust succession planning in place for their top executives.
General Electric is a company that has thrived under the legendary leadership of Jack Welch. Thanks to the company’s commitment to developing its own leaders and ensuring a smooth transition of power at the top, General Electric has been led by CEOs of Jack Welch’s caliber for the past 100 years.
Leadership positions in corporate America are dominated by former employees of GE. Although Welch planned his retirement seven years in advance, his strategy seems rushed when compared to former Motorola CEO Bob Galvin’s 25-year-old plan for the company’s next generation.
While the companies used as comparisons regularly brought in outside CEOs who knew nothing about the company and steered it in a completely different direction, the companies used as positive examples had consistent leadership from within their ranks. In addition, the CEOs of comparable companies were often autocratic and did not engage in succession planning, which led to a serious lack of leadership after their departure.
CEOs of comparable companies have been known to actively sabotage succession planning and undermine the careers of potential successors. In one troubled company, the CEO’s departure was the last straw.
Companies with a clear vision are consistently able to develop exceptional leaders.
Lesson 3: Visionary companies drive evolutionary progress by encouraging experimentation.
According to Darwinism, evolution occurs when minor changes are made to a species and the fittest individuals survive. Visionary companies should work for similar evolutionary progress within the companies they analyze.
Some of the new ideas, products, and practices that the company tried because it encouraged employees and management to take risks ended up being very successful.
One such product is J&J’s legendary Band-Aids, an employee innovation that came about when a man bandaged his wife’s finger after she cut it with a kitchen knife.
After he presented the concept to marketing, Band-Aids quickly became the company’s most profitable product line.
At 3M, for example, employees are allowed to spend 15% of their time on side projects. The now-famous Post-It note was the result of two independent efforts by two different employees. 3M’s success would not have been possible if employees had not been given the freedom to experiment and pursue their pet projects despite the results of initial market research.
In contrast, 3M’s competitor, Norton, actively discouraged the company from exploring opportunities outside its core competencies.
It is a sad truth that many attempts to innovate in business fail. No, evolution is not an outlier. Colorful casts for children with broken bones were an example of a J&J product that was obviously flawed. Hospital laundries were a mess after the plaster bandages turned plain white bedsheets into abstract masterpieces.
Forward-thinking companies know that mistakes are part of the learning process and should not be punished because it slows down innovation.
To encourage evolutionary progress, visionary companies advocate experimentation.
Lesson 4: Companies that have a clear vision not only talk about living their values, they also take concrete steps to do so.
While many companies claim to value idealism, experimentation, and openness to change, the reality is that these things are rarely put into practice. By using tangible mechanisms that impact employees’ daily actions and decisions, the visionary companies in the study were able to put their values into action.
Instead of just saying, “We want our employees to be innovative,” 3M implemented a number of policies and programs to encourage creativity and originality among its employees, such as allocating 15% of work time to side projects and requiring that 30% of sales come from products that are less than four years old.
Companies with a clear vision have mechanisms in place to ensure continuous improvement, rather than just promising it. For example, Wal’s “Beat Mart’s Yesterday” book, which compared daily sales with those of the previous year, served as an incentive for consistent development.
To ensure that high-ranking employees didn’t become complacent, Hewlett-Packard introduced a strict ranking process.
Companies with long-term visions also took action. They spend a disproportionate amount on research and development, human capital training and development, and the introduction of new technologies and business practices compared to other companies in their industry.
At the time, it was unusual for a private company to allow its researchers to publish their findings in academic journals, but Merck did just that. Unlike many other companies, the company decided that its product planning would be driven by scientific research rather than sales arguments. This led to an influx of brilliant minds into Merck’s research facilities.
A forward-looking company doesn’t just talk the talk, it takes concrete steps to live its values.
Built to Last Book Review
Built to Last is a great book I’d like to recommend to anyone who is interested in business. If you spend some time digesting the ideas, it might make a positive impact on your life.
Companies with a clear vision are able to achieve unprecedented success because they never compromise on their core principles while relentlessly seeking innovation.
A company’s core beliefs include not only its values, but also the reason for its existence, which goes beyond the pursuit of financial gain. Visionary companies promote not only their core beliefs, but also continuous development by setting ambitious goals and adopting bottom-up mechanisms to implement their policies.
About the Author
Jim Collins is an American author, lecturer, and consultant who has written for Fortune, Business Week, and the Harvard Business Review, among other publications.
He wrote the best-selling book Good to Great, which has sold over 4 million copies.
Jerry I. Porras is a business analyst and university professor. He is the Lane Professor Emeritus of Organizational Behavior and Change at Stanford University’s Graduate School of Business.
He is primarily interested in identifying approaches to aligning businesses with their core values and purpose.
Buy The Book: Built to Last
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