In preparation to write the book Built to Last, authors Jim Collins and Jerry Porras and a team at Stanford University researched highly successful (“visionary”) and less successful companies for six years. Their research debunked many myths commonly held in the business world. The following are some of the myths and findings that I found most interesting from their study:
Myth: The most successful companies exist to maximize profitability.
Reality: Paradoxically, visionary companies, which have core values and purpose beyond making money, make more money than purely profit-driven companies. This finding was interesting to me because of my passion for “social enterprise” where companies focus on making a profit and making a difference. It was nice to see research indicate that companies with this kind of focus actually were more profitable than companies who focused primarily on the bottom line.
Myth: It takes a great idea to start a great company.
Reality: Few visionary companies started with a great idea. Visionary companies often start slow, but win the long race.
Myth: Visionary companies require charismatic leaders.
Reality: Charismatic leaders are not required for visionary companies, and can be detrimental to their long-term success. The creators of the U.S. Constitution were more concerned with architecting an enduring country than being great individual leaders.
Myth: Change is the only constant.
Reality: Visionary companies rarely, if ever, change their core ideology. Visionary companies have a strong drive for progress, which they achieve by changing and adapting without compromising core ideals.
Myth: Blue chip companies play it safe.
Reality: Successful, visionary companies have judiciously made bold, audacious goals at crucial points in their histories.
Myth: Visionary companies are great places for everyone to work.
Reality: Someone will either fit well with a visionary company or they will be expulsed as a virus. It’s binary and only those who share the same core values will fit. Working for a visionary company is not easy, and requires talent and self motivation. Some people don’t fit in that environment and are more comfortable in companies where the workload and standards are not so rigorous.
Myth: Highly successful companies make brilliant and complex strategy plans.
Reality: Some of the greatest successes of visionary companies come by experimentation, trial and error, and opportunism— almost leveraging accident. Developing the perfect project is not the goal. Instead, many visionary companies rapidly develop and continuously improve and innovate.
Myth: Companies should hire outside CEOs to stimulate change and growth.
Reality: The most enduringly successful companies usually promote to their top positions from within, instead of hiring externally. This helps to preserve the culture and core values.
Myth: Successful companies focus on beating the competition.
Reality: Visionary companies tend to focus on being better and improving—beating themselves.
Myth: You can’t have your cake and eat it too.
Reality: Visionary companies are not prisoners to the “tyranny of the OR”. They do not unnecessarily restrict themselves to choosing between one option OR another. Instead, they focus on the “genius of the AND”. They choose stability AND progress, making money AND living by values and purpose. Visionary companies seek to pursue both options simultaneously.
Find Built to Last: Successful Habits of Visionary Companies
(Source: Built to Last)
Posted on April 14th, 2008 by admin
Filed under: Book Reviews, Business Management, Entrepreneurship, Social Enterprise
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