BUILT TO LAST

Successful Habits of Visionary Companies

James C. Collins and Jerry I. Porras
HarperCollins Publishers, 1994

Vimal Patel
Jim McCool
EE686S Technical Entrepreneurship
Fall, 2003
 Criteria for a Visionary Company
Premier institution in its industry
Widely admired by knowledgeable business
Made an indelible imprint on the world
Had multiple generations of chief executives
Been through multiple product life cycles
Founded before 1950
It is more than “successful”, more than “enduring”
Displays resiliency and ability to bounce back from
setbacks and mistakes
 Selection Process
Surveyed 700 CEOs at leading
corporations from a cross section of
industry, size, location and type/ownership

Identified distinguishing essential

differences (rather than commonalities)
with a similar Comparison Company

Examined how they started and evolved

(responded to historical circumstances)
Research Results and Comparison Companies
Visionary Companies Comparison Companies
1. 3M 1. Norton
2. American Express 2. Wells Fargo
3. Boeing 3. McDonnell Douglas
4. Citicorp 4. Chase Manhattan
5. Ford 5. GM
6. General Electric 6. Westinghouse
7. Hewlitt-Packard 7. Texas Instruments
8. IBM 8. Burroughs
9. Johnson & Johnson 9. Bristol-Myers Squibb
10. Marriott 10. Howard Johnson
11. Merck 11. Pfizer
12. Motorola 12. Zenith
13. Nordstrom 13. Melville
14. Philip Morris 14. RJR Nabisco
15. Procter & Gamble 15. Colgate
16. Sony 16. Kenwood
17. Wal-Mart 17. Ames
18. Walt Disney 18. Columbia
 Two Fundamental Principles
The Company IS the Product
Not building on a charismatic leader
Not building on a great idea (product or service)
Focus is on building a responsive organization
that will survive
Grounded in Core Values
More ideologically driven and less profit driven
Values are not just plaques on the wall
Institutionalized pride in what they are doing
 What’s NOT Fundamental
Maximize profitability first and foremost
Have a “correct” set of core values
Constant change and re-engineering
Conservative goals – play safe
Great place for everyone to work
Brilliant and complex strategic planning
Hire top leadership from outside
Focus on beating the competition
 Differentiator: Core Ideology

Statements of Ideology
Historical Continuity of Ideology
Ideology Beyond Profits
Consistency Between Ideology and Actions

17 Visionary Companies rated higher than

their Comparison Company
 Differentiator: BHAGs

Use of BHAGs (Big Hairy Audacious

Goals)
Audacity of BHAGs
Historical Pattern of BHAGs

14 Visionary Companies rated higher than

their Comparison Company
 Differentiator: Cultism

Indoctrination
Tightness of Fit
Elitism

14 Visionary Companies rated higher than

their Comparison Company
 Differentiator: Purposeful
Evolution
Conscious Use of Evolutionary Progress
Operational Autonomy to Stimulate and
Enable Variation
Other Methods to Stumulate and Enable
Variation and Selection

15 Visionary Companies rated higher than

their Comparison Company
 Differentiator: Management
Continuity
Internal Versus External Chief Executives
No “Post-Heroic-Leader Vacuum” or “Savior
Syndrome”
Formal Management Development Programs
and Mechanisms
Careful Succession Planning and CEO
Selection Mechanisms

15 Visionary Companies rated higher than their

Comparison Company
 Thesis

Visionary Companies institutionalize

the summary principle:
“Preserve the Core And Stimulate
Progress”