Built to Last: Successful Habits of Visionary Companies

Big Hairy Audacious Goals (BHAGs) serve as compelling, long-term objectives designed to captivate and mobilize employees within an organization. BHAGs should be risky to invigorate employees, urging them to execute a comprehensive, long-range plan that demands prolonged commitment. These goals fall into four main types: role model, where the objective is to achieve a success level akin to a respected company, often in a different industry; common enemy, aiming to surpass a competitor; targets, focusing on meeting specific qualitative or quantitative benchmarks; and internal transformation, concentrating on reshaping the company itself.

Collins and Porras employ the metaphor of clock building versus time telling to delineate distinct leadership approaches. Leaders characterized as time tellers are typically charismatic and visionary, shaping companies around themselves and their ideas. Although these leaders may possess genius, their companies often face challenges or even collapse in the absence of the leader. On the other hand, clock builders concentrate on constructing the organization and devising mechanisms to sustain the company, ensuring it adheres to the leader’s vision long after their departure. The authors emphasize that while time tellers are remarkable individuals, clock builders leave a more enduring impact on a company. They also cite this as perhaps their most enduring concept in Built to Last.

For each of the 18 visionary companies, Collins and Porras identified a corresponding comparison company. These companies were established in the same era as their respective visionary counterparts, offered similar products, operated in comparable markets (particularly during their founding), had fewer mentions in CEO surveys, and achieved lasting success in their own right whenever possible. Comparison companies elucidated shared aspects between visionary companies and their competitors while underscoring key distinctions.

Collins and Porras characterize core ideology as a fusion of a company’s core values and core purpose. This ideology forms the cornerstone of visionary companies, providing a stable center around which all other facets of the company revolve. Core ideologies should remain mostly unchanged throughout a company’s existence and prioritize a more significant meaning beyond mere profitability.

Purpose represents the fundamental reasons for a company’s existence beyond profit. A company’s core purpose should be expansive, fundamental, and lasting, providing guidance and inspiration to the organization over the years. This core purpose serves as a “guiding star,” a perpetual goal that the company consistently pursues but never fully attains, like helping humanity or making people happy.

Core values represent a company’s essential and enduring principles that should not be sacrificed for financial returns or short-term gains. Typically, this is a concise list of 3-6 guiding principles that necessitate no justification and should remain relatively unchanged throughout the lifespan of a company. These values must authentically reflect the company and its underlying motivations. They include concepts like “respecting individuality” and “put the customer first.”

Cultism comprises a set of practices fostering “an almost cult-like environment around the core ideology within visionary companies” (123). These practices typically filter out individuals not aligned with the ideology while cultivating loyalty and shaping employee behavior.

Evolutionary progress, in contrast to BHAGs, denotes unplanned advancement. This form of progress is characterized by ambiguity and typically commences with gradual, incremental steps, often involving the opportune utilization of unexpected opportunities. The authors posit that this mode of progress may outwardly resemble luck but is fundamentally rooted in the company’s core ideology and culture.

The “Genius of the AND” in Collins and Porras’s framework emphasizes embracing seemingly contradictory elements within a company’s operations. It advocates for avoiding binary choices and integrating opposing concepts, a duality that allows companies to balance different priorities and achieve a more comprehensive, innovative approach. This concept encourages organizations to pursue multiple aspects (like idealism and profit) rather than making mutually exclusive decisions, fostering a more resilient and adaptable business model.

In the context of Built to Last, vision refers to a combination of a company’s enduring core ideology and aspirational future goals. It represents a forward-looking perspective that aligns with the company’s fundamental values, guiding its long-term direction and inspiring actions to achieve progress while preserving the organization’s core identity.