A REVIEW OF

Built to Last
Successful Habits of Visionary Companies
Jerry I. Porras and Jim Collins • HarperBusiness • 2002
Secrets of Corporate Longevity
by David Meyer
Jerry I. Porras and Jim Collins break down decades of research to
discover how certain companies maintain success and market dominance
over the long haul.

Jim Collins, author of Good to Great and Great by Choice, and Stanford professor
Jerry I. Porras explain what makes some companies significant, lasting and
“visionary.” Their classic 1994 management guide remains relevant and insightful,
though not every featured company managed to survive.

The authors’ analysis illuminates their in-depth research into decades of corporate
history and operations. Their engaging, detailed narrative discusses and
debunks business myths and provides actionable, sometimes counterintuitive
guidance. With honesty and insight, they explain why some firms flourish
and others fail.

Porras and Collins’s balance between a sense of humor and business ruthlessness
is on near-constant display, and that is part of what has kept this work widely read
over the past decades. Anyone can compile or study research; only a select few can
glean from it unique insights and consistently worthwhile advice. Even a quick
skim of these pages will demonstrate why this is a classic, indispensable guide for
leaders.

Vision

Porras and Collins recount the saga of Bill Hewlett and Dave Packard, who founded
the Hewlett-Packard Company (HP) in 1938 and led it through years of innovation,
creativity and fiscal success. Hewlett-Packard maintained its long-term financial
health for years after the founders left.

By contrast, the authors cite how Texas Instruments – HP’s tech industry peer and
a one-time Wall Street darling – nearly perished after co-founder, chairman and
president Patrick Haggerty stepped down. Collins and Porras assert that visionary
companies possess assets that last beyond the tenure of their famous leaders or
hot products.

I’m probably most proud of having helped to create a company that by virtue of its
values, practices and success has had a tremendous impact on the way companies are
managed around the world.WILLIAM R. HEWLETT
Porras and Collins argue that visionary companies set the standards in their
industries, gain the admiration of their peers, make a global impact with their
success and survive their founders’ departures or deaths.

The authors clarify that the extensive research leading to this book defined
“visionary companies” as launching prior to 1950 and enduring through multiple
business cycles and generations of top executives.

“Great Ideas” and Early Failures

Collins and Porras refute “the myth of the great idea.” For example, when Hewlett
and Packard spent $500 to launch HP, the authors reveal, they had no specific
product or any grand plan to invent one. The authors underscore that among the
18 visionary companies they identified, only three – Ford, General Electric and
Johnson & Johnson – started with a planned, successful idea, product or service.

The authors explain that notable companies can begin in failure. For example, 3M
started out as a “failed corundum mine.” They showcase Boeing and Disney as
other early failures. Collins and Porras – demonstrating their counterintuitive
insight – maintain that the lack of a grand idea or early success forces
entrepreneurs to focus on building a great company rather than simply promoting
a single product or service.

“Big Hairy Audacious Goals”

The authors can be witty and at times, self-amused. Take their position that
visionary companies commit to major targets, which they call – with a smile – “Big
Hairy Audacious Goals.” (BHAGs). These objectives, which must be clear and easy
to explain, provide the fuel and the vehicle with which visionary companies move
forward.

Cultural Fit

Porras and Collins find that visionary companies with strong workplace values and
“tight-knit” social structures embrace employees who fit their culture, but expel
misfits who don’t.

We found that the visionary companies tend to be more demanding of their people
than other companies, both in terms of performance and congruence with the
ideology.JERRY I. PORRAS AND JIM COLLINS
They point out, for example, that if you disdain “Pixie Dust,” and don’t want to
maintain a “clean-cut,” wholesome appearance, you should never apply for work at
Disneyland.

“Purposeful Accidents”

Porras and Collins delve into convenient, creative and practical accidents that
generated profits and opportunities for visionary corporations. Their exploration
of these accidents reads as an oblique endorsement of the necessity of good
luck. For example, they cite the way Marriott moved into the airline catering and
services business in 1937, as a result of its leader, J. Willard Marriott,
noticing airline customers who were buying snacks before their flights.

Internal Channels

The authors find some amusement in the way media attention painted GE
leader Jack Welch as a white knight who rode in and saved the company. They
point out that Welch, like all of GE’s chief executives, was “home-grown” talent; he
joined the company at age 24. The authors also disclose that, from 1915 to 1994,
GE’s chief executives generated an average return on equity (ROE) of 28.29%,
compared to Welch’s 26.29% ROE. Welch exemplifies the authors’ belief that
visionary companies develop corporate leaders from rank-and-file
employees whom they’ve schooled internally as candidates for higher positions.

Honesty

The authors repeatedly stress that core values form the basic building blocks of
visionary companies. Disney, for example, was founded and built on its core
values of imagination, creativity and wholesome attitudes.

Ultimately this is not a business book, but a book about building enduring, great
human institutions of any type.JERRY I. PORRAS AND JIM COLLINS
To develop or redefine your organization’s core values, Porras and Collins suggest
assembling the best possible internal group to generate a list of values and to
examine that list rigorously together.
A Classic

Reviewing this fundamental, time-proven, prescient, insightful business guide is

like reviewing the Mona Lisa. You might find minor flaws here and there, or insist
that it’s not to your taste, but you can’t argue with its worth or well-earned
endurance. Collins and Porras let their copious research material teach them what
mattered rather than imposing their views on the material or insisting that it
conform to preconceived notions. Their own sense of discovery brings enduring
further discoveries to business readers.

T.J. Rodgers, president and CEO of Cypress Semiconductor Corp, called this, “a
‘must read’ for any CEO who aspires to create a great company.” Amazon.com
wrote of this widely acknowledge classic: “This analysis of what makes great
companies great has been hailed everywhere as an instant classic and one of the
best business titles since In Search of Excellence.”

Worthwhile books that also address that elusive search include Jack
Welch’s Straight From the Gut and co-author Jim Collins’s other classics,
including Good To Great and Great by Choice.

David Meyer
David N Meyer is a content editor at getAbstract and author of The 100 Best Films To
Rent You've Never Heard Of, Twenty Thousand Roads: The Ballad of Gram Parsons and His
Cosmic American Music, The Bee Gees: The Biography, and other books. You can find his
essays on film and music at davidnmeyer.com