Built to Last is based on a simple, useful premise: select 18 companies regarded within their industries as "visionary" (Ford, Hewlett-Packard, Merck, Motorola), and figure out what sets them apart from their merely successful competitors (General Motors, Texas Instruments, Pfizer, Zenith). Authors James Collins and Jerry Porras start by debunking the myths. Visionary companies usually don't start with visionary product ideas, typically don't have charismatic leaders, and share no common strategy. Instead, Collins and Porras say, visionary firms "preserve the core and stimulate progress."
The core is a set of articulated values that give employees a clear direction. A firm must be totally dedicated to its core values. This requires a "cult-like" atmosphere in which employees are "indoctrinated" into a "corporate ideology," with misfits being "expunged like an antibody." (They really use this vocabulary.) This kind of ideological control is essential to long-term survival, since it allows the company to decentralize its operational decision-making and continually revolutionize itself. Fixed procedures will crash and burn when the world changes, but a company with a core ideology can keep on adapting.
While not exactly earth-shattering, these results are convincing and compelling. Yet some important things are missing. The authors insist that a firm's day-to-day operations be aligned with its vision, but no formula can explain how to apply a vision to changing market realities. Can IBM really be saved simply through a fanatical recommitment to its original vision? Do General Electric's ethical disasters really have nothing fundamental to do with its tyrannical culture?
No matter how fervently a vision is believed, nothing guarantees its long-term viability. Industries and markets, after all, are fierce and capricious things.
Built to Last: Successful Habits of Visionary Companies, by James C. Collins and Jerry I. Porras: US$25. HarperBusiness: (800) 331 3761, +1 (212) 207 7000.
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