Built to Last – Part 2

In a previous article, we were revisiting some of the key points raised by Jim Collins and Jerry I. Porras in their bestseller Built to Last: Successful Habits of Visionary Companies. Basically, this book aims to explain why some companies flourish for decades, while others decline and die. Here is the second and final part of this journey through their work.


A relevant point discussed by the authors is the importance of recognizing that core ideology alone doesn’t make a visionary company since everything around you is always changing. To meet the demands of a changing world, a company ‘must be prepared to change everything about itself except its basic beliefs as it moves through corporate life’. According to the authors, companies must preserve its core ideology while allowing room for the manifestations of the core ideologies to change. This means product lines, profit strategies, cultural tactics, and organization structure can change – but a core ideology should not.


Porras and Collins make reference to using the yin-yang symbol from the Chinese philosophy in order to explain the visionary mentality of not ‘oppressing themselves to the tyranny of the or’ – which means trouble for those that cannot live with two contradictory ideas at the same time. They claim that inferior companies hold proclamations such as ‘you can invest for the future or do well in the short-term’ or ‘you can have low cost or high quality’. This limits companies to a short-minded frame of reference where there is only one choice, but not both. They invite readers to embrace both extremes and to figure out a way to have both choices. Visionary companies find ways to do well in the short-term and long-term, rather than sacrifice one for the other. They don’t look for a balance – rather, acquiring both to the max. The yin-yang symbol illustrates this concept.


Companies should do business by being able to adapt and change over time in response to market conditions, according to the authors. Over time, competencies, strategies, and goals change, but the core ideology must remain intact. Porras and Collins also suggest mechanisms to preserve the core and stimulate progress within a company. They state that visionary companies must have the confidence to set ‘big hairy audacious goals’ and take risks by ‘setting super goals’ as a hallmark for success. At this point, they give the example of Boeing and its pursuit of the commercial airline market in the 1950s, unlike its rival Douglas Aircraft, who avoided entering the commercial market.


The authors say that visionary companies are not a great place to work for everyone. All employees within a visionary company must adapt and embrace the core values of the institution, which typically demands of its employees to seek accomplishment and to follow the core ideology. Some may see this as a cult-like culture.


These companies have the attitude of trying a lot of stuff and keeping what works. Porras and Collins come to the realization that experimentation, trial and error, accidents, and opportunism were ahead of detailed strategic planning. They see this attitude as a way to make evolutionary progress, describing some steps to succeed, such as giving ideas a quick try, accepting mistakes and letting the weakest die, taking small steps to achieve small failures in order to get ahead and being persistent.


Porras and Collins describe a characteristic of visionary companies as they are likely to promote inside employees to high positions as opposed to other organizations that ‘hire from the outside’. This allows for consistent excellence in leadership from within the ranks, from employees who have adhered to the company’s core ideology. In the overall picture, this is a way for companies to preserve the core while stimulating progress. The authors refer to comparison companies that are, according to them, six times more likely than visionary companies to hire outside candidates as their CEOs. At visionary companies, only 4% of the CEOs came from the outside.


The authors define a visionary company as one who is never satisfied with its results. They are always trying to improve, to get better over and over again. These companies hold high standards and reject the practices of comparison companies that make money off successful products. Instead of questioning how well they are going they ask themselves how they can do better tomorrow than they did today. Porras and Collins stress the importance of investing for the future and adapting to newer ideas and technology earlier than others. Out of the 18 companies researched, 16 were found to drive themselves harder for improvement.


Visionary companies translate their core ideologies into the everyday workings of the institution. Their core ideology is translated into the strategies, behaviors, business practices and goals of the organization. They use methods of providing well defined objectives to employees, allowing them as much freedom as they wanted to work towards that goal with the intention of recognizing the individual’s efforts throughout the organization. They keep the focus on what is appropriate to the company ideology and goals instead of asking themselves if that practice is good or not.


The authors close this modern classic book by suggesting a rearrangement of values aiming to stimulate progress. It is an invitation to potential visionary organizations in a quest for continuous self-improvement and to invest in new technologies and new management methods, taking risks instead of lying back and remain conservative.


This article is for general, indicative purpose only and should not be considered investment advice. Florida Connexion is not liable for any financial loss, damage, expense or costs arising from your investment decisions based on this article.


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Built to Last: Successful Habits of Visionary Companies, by Jim Collins and Jerry I. Porras