Built to Last: Successful Habits of Visionary Companies

Built to Last: Successful Habits of Visionary Companies

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by Jim Collins, Jerry I. Porras

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Drawing upon a six-year research project at the Stanford University Graduate School of Business, James C. Collins and Jerry I. Porras took eighteen truly exceptional and long-lasting companies and studied each in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day -- as start-ups, as midsize

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Drawing upon a six-year research project at the Stanford University Graduate School of Business, James C. Collins and Jerry I. Porras took eighteen truly exceptional and long-lasting companies and studied each in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day -- as start-ups, as midsize companies, and as large corporations. Throughout, the authors asked: "What makes the truly exceptional companies different from the comparison companies and what were the common practices these enduringly great companies followed throughout their history?"

Filled with hundreds of specific examples and organized into a coherent framework of practical concepts that can be applied by managers and entrepreneurs at all levels, Built to Last provides a master blueprint for building organizations that will prosper long into the 21st century and beyond.

Editorial Reviews

The Barnes & Noble Review
Jim Collins and Jerry Porras begin their groundbreaking analysis of "visionary companies" with the following bold statement: "We believe every CEO, manager, and entrepreneur should read this book." Although their language may sound slightly hubristic, the authors actually deliver the promised goods: Written in eloquent and accessible language, Built to Last, the result of an extensive six-year research study conducted at Stanford University, is a classic business book that surely deserves the accolades critics, readers, and its creators have heaped upon it.

Collins and Porras begin by defining the type of organizations they intend to examine. American Express, Ford, GE, Nordstrom, and Walt Disney are some of the 18 visionary companies -- widely admired, crown-jewel institutions that were founded before 1950 and have left "an indelible imprint on the world in which we live" -- to fall into the purview of their study. The authors then proceed to offer 12 management myths shattered by their research into these companies. Perhaps the most significant of these debunked pieces of conventional wisdom is the idea that change is the sole constant in the business world. Instead, Collins and Porras argue, "a visionary company almost religiously preserves its core ideology -- changing it seldom, if ever." From this adherence to a fundamental set of beliefs or a deeply held sense of self-identity comes the discipline and drive that enables a company to succeed in rapidly changing, volatile environments.

One of the enjoyable things about reading Built to Last is that its authors consciously chose to avoid the trendy phrases that sometimes make business books seem no more weighty or enduring than magazine articles. Instead, Collins and Porras have written a book that is meaningful, passionate, based on careful study, and, in its own way, built to last. (Sunil Sharma)

Product Details

HarperCollins Publishers
Publication date:
Harperbusiness Essentials Series
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5.30(w) x 7.90(h) x 1.00(d)

Read an Excerpt

Chapter One

This is not a book about charismatic visionary leaders. It is not about visionary product concepts or visionary market insights. Nor even is it about just having a corporate vision.

This is a book about something far more important, enduring, and substantial. This is a book about visionary companies.

What is a visionary company? Visionary companies are premier institutions-the crown jewels - in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them. The key point is that a visionary company is an organization - an institution. All individual leaders, no matter how charismatic or visionary, eventually die; and all visionary products and services-all "great ideas" - eventually become obsolete. Indeed, entire markets can become obsolete and disappear. Yet visionary companies prosper over long periods of time, through multiple product life cycles and multiple generations of active leaders.

Pause for a moment and compose your own mental list of visionary companies; try to think of five to ten organizations that meet the following criteria:

  • Premier institution in its industry
  • Widely admired by knowledgeable businesspeople
  • Made an indelible imprint on the world in which we live
  • Had multiple generations of chief executives
  • Been through multiple product (or service) life cycles
  • Founded before 1950
Examine your list of companies. What about them particularly impresses you? Notice any common themes? What might explain their enduring quality and prosperity. How might they be different from other companiesthat had the same opportunities in life, but didn't attain the same stature?

In a six-year research project, we set out to identify and systematically research the historical development of a set of visionary companies, to examine how they differed from a carefully selected control set of comparison companies, and to thereby discover the underlying factors that account for their extraordinary long-term position. This book presents the findings of our research project and their practical implications.

We wish to be clear right up front: The "comparison companies" in our study are not dog companies, nor are they entirely unvisionary. Indeed, they are good companies, having survived in most cases as long as the visionary companies and, as you'll see, having outperformed the general stock market. But they don't quite match up to the overall stature of the visionary com- panies in our study. In most cases, you can think of the visionary company as the gold medalist and the comparison company as the silver or bronze medalist. We chose the term "visionary" companies, rather than just "successful" or "enduring" companies, to reflect the fact that they have distinguished themselves as a very special and elite breed of institutions. They are morethan successful. They are more than enduring. In most cases, they are the best of the best in thdir industries, and have been that way for decades. Many of them have served as role models -icons, really - for the practice of management around the world. (Table 1. 1 shows the companies in our study. We wish to be clear that the companies in our study are not the only visionary companies in existence. We will explain in a few pages how we came up with these particular companies.)

Yet as extraordinary as they are, the visionary companies do not have perfect, unblemished records. (Examine your own list of visionary companies. We suspect that most if not all of them have taken a serious tumble at least once during their history, probably multiple times.) Walt Disney faced a serious cash flow crisis in 1939 which forced it to go public; later, in the early 1980s, the company nearly ceased to exist as an independent entity as corporate raiders eyed its depressed stock price. Boeing had serious diffi-culties in the,mid-1930s, the late 1940s, and again in the early 1970s when it laid off over sixty thousand employees. 3M began life as a failed mine and almost went out of business in the early 1900s. Hewlett-Packard faced severe cutbacks in 1945; in 1990, it watched its stock drop to a price below book value. Sony had repeated product failures during its first five years of life (1945-1950), and in the 1970s saw its Beta format lose to VHS in the battle for market dominance in VCRs. Ford posted one of the largest annual losses in American business history ($3.3 billion in three years) in the early 1980s before it began an impressive turnaround and long-needed revitalization. Citicorp (founded in 1812, the same year Napoleon marched to Moscow) languished in the late 1800s, during the 1930s Depression, and again in the late 1980s when it struggled with its global loan portfolio. IBM was nearly bankrupt in 1914, then again in 1921, and is having trouble again in the early 1990s.

Table 1.1

The companies in our Research Study

Visionary Company

American Express
General Electric
Johnson & Johnson
Philip Morris
Procter & Gamble
Walt Disney

Comparision Company

Wells Fargo
McDonnell Douglas
Chase Manhattan
Texas Instruments
Bristol-Myers Squibb
Howard Johnson
RJR Nabisco

Built to Last. Copyright © by James C. Collins. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

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Built to Last 4.7 out of 5 based on 1 ratings. 24 reviews.
John_Clinton More than 1 year ago
Fascinating book and no coincidence that we still talk about it 17 years after it was published. While some reviewers are criticising that not all companies in the study continue to be successful I think they both miss the point and did not read the author's claims carefully. They study a group of companies which was exceptionally successful during the observation period. This neither implies that these companies will continue to do well nor does it prevent us to learn from their past experiences. What is more of a challenge for the book is the mind frame in which it was written. Authors' are not able to fully escape the main debates of their time (and they probably should not). For 'Built to Last' that means substantial space being devoted to vision and mission (hotly debated in the 1990s). I recommend that you also read 'Enduring Success: what we can learn from the history of outstanding corporations' - a new book that picks up topics we care about today (e.g. innovation versus execution), using the same research approach as 'Built to Last'.
lemme14 More than 1 year ago
Full disclosure: I actually read this after Good to Great (by the same author). While the books are not one in the same, I did feel as though I may have benefited slightly more by reading this first and Good to Great second. Either way, these are two must read business books. A quick summary of Built to Last: Are you a clock-builder/architect or timekeeper? Embrace the and, which is the tyranny of the or. Preserve the core and stimulate progress. Seek consistent alignment. Every one of these concepts applies to those look to build their company and succeed in the process. You will learn a lot about where your company is and what their vision is just by reading this book. Do they have BHAG's (big, hairy, audacious goals)? Read and find it. It will definitely open your eyes and motivate you to do more.
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Guest More than 1 year ago
I am reading this book and am finding it hard to get through. I think I just expected more from all the hype - but the ideas in the book are not something that are new to me.
Guest More than 1 year ago
After reading many business books, this one truly incorporates many common sense applications, and I would recommend it for several reasons: ¿ Jim Collins identifies three critical factors to running a great business of any size. ¿ He develops a strongly supported profile of what is necessary to be the leader of a great enterprise in the modern day. And it is most likely very different than what you may think. ¿ He presents actual businesses that were built from, and resulting from, ethical behavior despite the perceived compromises ethical behavior brings. I found this to be the most relevant issue - in light of the current climate of corporate scandals.
Guest More than 1 year ago
This superbly researched book explains to the reader how companies achieve enduring success. I have been in a senior executive role for over 20 years, and I learned a great deal. This book is a classic.
Guest More than 1 year ago
This is a groundbreaking book that tells us how to build landmark companies that stand the test of time. The subject of Collins' and Porras' study was 'What makes the truly exceptional companies different from the other companies?' By answering such questions, Collins and Porras go beyond the incessant barrage of management buzzwords and newfound fads to discover timeless qualities that have consistently distinguished outstanding companies. They also provide inspiration to entrepreneurs by destroying the false but widely accepted idea that only charismatic visionary leaders can build visionary companies. This book is an academic treatise, and yet it is superbly written and an exciting read. You could fall asleep on most thesis but this one kept me turning the pages despite being sleepy from a long day's work. I would recommend it to anyone who is serious not about just making quick money, but intent on building sustainable businesses that last.
Guest More than 1 year ago
Overall, this is an excellent book about how to build a company that will stand the test of time. The authors present the information in a format that is easy to read for the senior executive or someone with no business experience. While the authors present detailed and informative examples of actions that businesses have taken to be successful, the number of examples can become cumbersome. If someone is looking for a quick reference of strategies to improve a company, this is probably not the book for them, but if an individual is looking for an in depth report on techniques used by companies, it would be a useful tool. This book's intent is to show you the cogs that matter and give you some framework by which to align them to drive a company constantly/relentlessly forward. Often managers get lost in the P&L of the day. While that is important, it may not be enough to keep the fiber of the organization together. This book can serve as a reminder to us all of what is important to maintain a business that is financially successful but more importantly keeps its employees and customers happy. This book's simple goal is to shatter two myths that many believe a visionary company is founded upon, the incredibly innovative product and the charismatic leader.
Guest More than 1 year ago
Built to Last by James C. Collins and Jerry I. Porras is an essential guide for any new or old organization looking to get started or revitalize its fundamental foundation and business practices. Assembled as a result of a six year long study examining eighteen remarkable and long-lasting companies in relation to each companies top ¿market¿ competitor, this book genuinely shows what distinguishes truly visionary companies from the rest. This books begins by briefly describing what visionary companies were chosen for the study and why. For those interested, visionary companies included organizations such as Wal-Mart, American Express, IBM, and Walt Disney, just to name a few. According to Collins and Porras, a visionary company can neither be founded on a single great idea nor rely on an individual charismatic leader. Those in a visionary company must be willing and able to put the organization first in order not only to make an impact after the death of any individual leader but also to stand the test of time. Essential in any visionary company is a statement of what the company stands for and why it exists ¿ its core ideology consisting of its core values and core purpose. For example, a company must exist for a number of reasons beyond just making money. Along with this statement of core ideology must come a plan for action, a plan to stimulate and drive progress in an organization toward an envisioned future. A key concept from this book is preserving the core of an organization while stimulating progress within that organization. Change in an organization is a constant with respect to everything but the organization¿s core ideology. A visionary organization can stimulate progress in a number of ways from setting BHAGs or Big Hairy Audacious goals, to creating and promoting a cult-like culture within the organization, to trying a lot of stuff and keeping what works, and finally, to relying on homegrown management. In a visionary company, good enough never is, there is never an end to the movement for continual progress, and every member in the organization is a key player encouraged to take personal initiative. A visionary company is a great place to work if and only if you strongly agree and adhere to its values and purpose. This book was not only insightful, but it provided the steps necessary for any organization to take strides toward becoming a visionary company. Although information at times was repetitive, it proved useful in hammering home key concepts crucial to understanding what makes a visionary company truly visionary. The book was an easy read, and the authors were quick to point out that this book is not the ¿ultimate truth¿ when it comes to understanding organizations. I would recommend this book to anyone. It is worth a read, and definitely worth the money!
Guest More than 1 year ago
This is a great book. In addition, I recommend 'Strategic Organizational Change' by Beitler.
Guest More than 1 year ago
excellent book for business students
Guest More than 1 year ago
Why settle for being great when you can be monumentally stupendous? An impecably researched book (the appendix in the back of this book could be a separate publication in and of itself) that breaks many of the stereotypical beliefs of success experienced by large corporations. Even if you are not self-employed the principles described will help anyone live a more satisfying life. And by the way, nice guys (and nice corporations) DO finish first.
Guest More than 1 year ago
A very powerful guide to start a high-tech company. Many myths are broken. An excellent guide to create a vision and build a visionary organization. It really teaches you how to start the right organization, rather than start with the right idea.
Guest More than 1 year ago
We can learn new things and new ways of looking into things. Also we can discover why visionary companies stay forever. Money seems to be everything in our lives and it is the reason for these companies' existence however it is not what drives these visionary companies. The characteristics defined to select the most successful companies are excellent measures of quantity and quality. The key idea, that success does not depend on having an early vision and charismatic leaders but on identity, culture and commitment to the company steer us into different paths for future success. It places the focus, not only on the executive team to set the tone, but also on the hiring process and the freedom people are given to create. It will give you new insights and most importantly ways to implement.
Guest More than 1 year ago
Great book for the serious business person. Helps identify focus and cultivate potential.
Guest More than 1 year ago
In their richly illustrated Built To Last, the sequel of infamous Good To Great, Jim Collins and Jerry I. Porras systematically explore what makes up a great company compared to a good company. A great company has a strong vision that encompasses both an immutable core ideology and envisioned future. That vision transcends the current leader of a great company because it has been institutionalized over time. Contrary to common wisdom, charismatic leadership can be very detrimental to even a great company. Furthermore, a great company nurtures its future leaders by promoting from within to preserve its essence over time. Collins and Porras demonstrate that bringing external ¿blood¿ to lead a (great) company in decline is often not very productive to turn around such a troubled company. In addition, a great company often commands a cult-like devotion from its staff. Disciplined people in thought and action are indeed self-motivated to help their company stay great. A great company also prospers by sticking to an evolutionary process that rigorously keeps the strongest ideas and lets the weakest ones die reflecting some BHAGs (Big Hairy Audacious Goals) set previously. Although status quo is never perceived as satisfactory, vision is not lost out of sight. Collins and Porras show that both stimulation of change and preservation of the core are pursued at the same time vigorously. In Good To Great, Collins explains to its audience how to relate the above-mentioned concepts to the mutation of a good company into a great one.
Guest More than 1 year ago
Non-traditional applications described are innovative and inspiring. Terrific insight and enlightening in regard to the way companies become 'great'.
Guest More than 1 year ago
This book shatters some of the myths about building a long-lasting corporation with solid research and a well-thought mental model. The Genius of the AND concept is simple but timeless.