76 pages • 2 hours read
Jim CollinsBuilt to Last: Successful Habits of Visionary Companies
Nonfiction | Book | Adult | Published in 1994A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Chapter 11-EpilogueChapter Summaries & Analyses
Chapter 11 Summary: “Building a Vision”
With the introduction of the paperback edition, Collins and Porras extend their exploration of visionary companies by adding an 11th chapter focused on constructing company visions. Emphasizing the critical balance between “preserving a cherished core ideology while simultaneously stimulating progress” (220), the authors refine their earlier concepts, replacing the original elements of their yin/yang symbol (Preserve the Core / Stimulate Progress) with “Core Ideology” and “Envisioned Future” (220). Core Ideology, comprising a company’s enduring values and purpose beyond profit, is an unwavering guide through environmental shifts. The authors stress the importance of authenticity in these core values, recommending at most five or six per company. The core purpose, more significant than profit, should withstand time and market changes, exemplified by Merck’s commitment to preserving and improving human life. The authors introduce the “5 Whys” experiment to elucidate this purpose, urging companies to delve deeper into their mission by questioning why their companies are important. The authors caution against defining a company solely by profitability, proposing a thought experiment challenging companies to consider an offer that assures fair prices and continued employment for all but eliminates all operations, forcing companies to evaluate the elements of their company that are worth preserving. The authors assert that a purpose beyond profit is essential for employee motivation, retention, and recruitment.
Authenticity remains pivotal in core ideologies, distinguishing them from aspirational notions. Collins and Porras emphasize that core ideologies should mostly matter internally, and sharing similar ideologies with other companies is inconsequential. Attempting to force employees to adopt a core ideology is futile; instead, the focus should be on attracting individuals already aligned with the ideology and further developing them. Core ideologies should stand as a long-term influence, whereas competencies may shift. The authors emphasize that the substance of the statement is more critical than its eloquence, and core competencies should align with, but are distinct from, core ideologies.
On the other side of the spectrum, the envisioned future involves creating a Big Hairy Audacious Goal (BHAG) spanning 10-30 years, accompanied by vivid descriptions of its accomplishment. The authors caution against confusing the BHAG with the core ideology, emphasizing that BHAGs must be specific, attainable, and exciting while core ideologies must remain unattainable. Visionary companies consistently achieve their BHAGs, differentiating them from comparison companies that often falter.
The authors warn against “we’ve arrived syndrome,” urging companies to set new goals after achieving milestones to maintain momentum (235). Establishing a robust core ideology aligned with an inspiring BHAG facilitates a focus on alignment. Collins and Porras delineate two facets of alignment: developing alignments creatively and eliminating misalignments analytically. Removing practices misaligned with the core ideology is a challenging yet crucial task.
Epilogue Summary
The Epilogue addresses common queries raised about the authors’ work. Firstly, non-C-level employees may question the book’s relevance. In response, the authors emphasize that individuals across all organizational levels can foster core ideologies, even in companies lacking a defined one. They advocate for employees to create and actively pursue Big Hairy Audacious Goals (BHAGs). Collaborative discussions, especially with management, are recommended to instigate positive organizational shifts.
The authors contend that even older companies can achieve visionary status, albeit through a more challenging process. The inherent complexity lies in navigating and altering established processes, often triggering resistance. However, examples like Philip Morris and Ford illustrate that transformation into visionary companies is feasible. The authors emphasize that visionary status is not static; companies can continually improve or lose their visionary standing, making it a long-term commitment.
IBM is a cautionary example of a company losing its visionary status due to a departure from core values. The authors suggest that struggling visionary companies should analyze their history, reaffirm their core ideology, take bold steps forward, and eliminate misalignments.
Collins and Porras assert that creating a visionary company is feasible for almost everyone, requiring persistence and clarity in goals. Visionary companies necessitate leaders committed to the company’s enduring survival, continuous progress, the establishment of values and purpose, aspirations beyond profit, and a simple exit strategy. The authors stress that these attributes are the sole prerequisites.
According to the authors, non-profit organizations can glean as much benefit from the ideas in Built to Last as their for-profit counterparts.
Comparing their work to books like In Search of Excellence, the authors acknowledge similarities but highlight key distinctions, particularly in their inception-focused approach and framework. They note alignment with Peter Drucker’s works, such as Concept of the Corporation and The Practice of Management, as well as Edgar Schein’s Organizational Culture and Leadership and John Kotter and James Heskett’s Corporate Culture and Performance.
In conclusion, the authors argue that their historical analysis will remain relevant, with fundamental ideas like “clock building, the Genius of the AND, preserving the core / stimulating progress, and alignment” standing as universal truths (240). However, they acknowledge that the methods to achieve these truths may evolve, emphasizing that their goal was to illustrate key concepts rather than prescribe a rigid process.
Chapter 11-Epilogue Analysis
In these concluding chapters, Collins and Porras deliver practical insights to assist companies in refining their core values and defining their purpose. The authors introduce a series of thought experiments, starting with creating a “Mars Group” (223). Participants are tasked with selecting 5-7 employees to recreate the company’s existence on another planet, aiming to capture the essence of the organization, including its unspoken values. This elite group, representing the company’s pinnacle, is then tasked to identify the company’s core values.
Simultaneously, Collins and Porras advocate for a meticulous analysis of these proposed values before adoption. They provide an example involving a tech company contemplating quality as a core value. By questioning whether market shifts favoring speed over quality would alter this commitment, the group decided to remove the value, emphasizing their unwavering focus on cutting-edge innovation. This thorough examination of core values proves essential for crystallizing a company’s identity and vision.
However, the authors assert that while core values are crucial, the focus should be on the company’s purpose. To guide companies in uncovering their purpose, Collins and Porras introduce the “Five Whys” method (226). Participants engage in a successive chain of questioning, probing why a company’s product or service holds importance, starting with a fundamental statement about the company’s product or service (e.g., ABC Company produces widgets, or DEF Company offers identity services). This iterative process continues until it unearths a legitimate purpose beyond profit. A market research example illustrates this method, where the initial purpose was “to provide the best market research data available” (226). However, through a series of probing “why” questions, participants refined the purpose to “contribute to our customers’ success by helping them understand their markets” (227).
Although Collins and Porras explain the importance of a core ideology early in Built to Last, this section acknowledges that many companies struggle to create an authentic, inspiring purpose. Establishing a compelling core purpose is pivotal in attracting and retaining employees. Collins and Porras recognize a growing skepticism toward corporate culture and advocate for fostering a volunteer-like mentality. Citing Peter Drucker’s insight that the most dedicated individuals are essentially volunteers, as they have alternative life choices, the authors stress the transformative power of a core ideology in shifting employees’ mindset from mere workers to engaged “paid volunteers.” This shift, where contributions extend beyond the company to meaningful global impact, is a significant motivational factor, even during challenging times. However, the authors caution that the authenticity and reinforcement of the core ideology through company policies and procedures are imperative for its effectiveness.
While the authors clarify one aspect of their yin/yang symbol, they substantially redefine the other. Despite still representing “stimulate progress,” Collins and Porras deconstruct this progress into Big Hairy Audacious Goals (BHAGs) and visualization. They recommend “internal transformation” for older or larger companies, like GE aspiring to surpass its competition and advocate for role model BHAGs, exemplified by Stanford University’s vision to become the Western “Harvard” for startups. Target BHAGs, both qualitative and quantitative, such as Wal-Mart’s aim of being a $125 billion company by 2020, and common enemy BHAGs, like Nike’s goal to “crush Adidas,” are also illustrated. The underlying concept is to ignite passion and emotion through the pursuit of a challenging, ambitious goal.
In the Epilogue, the authors confront a critical concern regarding the ongoing relevance of their work. Acknowledging that specific methods detailed for maintaining core ideology and stimulating progress may lose effectiveness over time, they assert the enduring truth of their core concepts: “clock building, the Genius of the AND, preserving the core / stimulating progress, and alignment.” These four principles encapsulate Built to Last’s enduring core ideology, providing a timeless foundation amid the dynamic shifts of markets.
