Built to Last: Book Review

A few days ago, when asked my mentor, Mr. Narendra Goidani who is an avid reader and had successfully launched a campaign named "A book A day!" in Dec '19 about "Which are the few books that every management student must read?", he suggested this book named"Built to Last" by Jim Collins & Jerry I. Porras. As the cover page suggests, this book is a guide that gives an insight into the successful habits of visionary companies. It has grounded and solid research done by the authors to figure out what separates some visionary companies like General Electric, 3M, Merck, Walmart, Hewlett-Packard, Walt Disney, and Philip Morris from their rivals. The author deduced that if someone would have invested $1 between 1920 to 1990 in the above-mentioned companies, that investment would have returned for more than $6000 today while the return for the other companies would have been just $400 between this period.

The authors compare the selected companies and explore the trends and commonalities in how visionary companies differentiate.
In addition, the authors also discover how highly visionary companies often use bold missions that are clear and compelling and attain their extraordinary position largely because of the simple fact that they are so demanding of themselves.
Let’s dig in!

A few takeaways from this book for any young budding entrepreneur sitting on a business idea with an itch to start something new but afraid of failing are:

Lesson 1. This book refutes the myth that all great companies start with a great idea: When Masaru Ibuka started Sony in war-ravaged 1945 Japan, he wanted to create a company. He had no idea what this company would sell. He tried his hand at selling lots of things, from sweet bean-paste soup to rice cookers, before he settled on electronics.

Lesson 2. Visionary companies need not worry about the visionary or charismatic leaders to lead: Many a time it has been noticed that the top leaders of the visionary companies are simple and ordinary. The reason these companies succeeded is that instead of focusing on one idea or one great leader, they focus on the process of coming up with ideas, and producing leaders, either good or bad. They focus on their core values and competencies.

Lesson 3. Visionary companies do not have profit maximization or maximizing shareholders' profit as their driving force or primary objective: The authors find that the visionary companies have generally been more ideologically driven and less purely profit-driven than the comparison companies. What Johnson & Johnson sought after was to serve its customers well, then its employees. Once these priorities had been met, then shareholders should receive a return on their investments.

Lesson 4. Visionary companies have built strong core values: The most important point is not what the content of the company's ideology is but how much the organization believes in those values. Eg: Walmart's motto is "Exceeding Customer Expectations"

Lesson 5. Visionary companies don't focus on safe strategies: These companies keep on experimenting. Sometimes they succeed but many times they fail and learn from it. They are always committed to achieving bigger goals. One such example cited in this book is from 1961, John F. Kennedy when he made a comment that "The US would take a man to the moon and return safely until the end of the decade". Initially, his statement was not taken seriously by many.

Lesson 6. Visionary companies are not the best place for everyone to work: Everyone should check if their personal goals align with the companies. The core ideology is something that you either share, or you don’t. There’s nothing in between, which is why new employees either thrive or leave very quickly. Employees in such companies have strong self-belief and follow the core values religiously.

 

One of my favorite quote from this book which the author has put in  a short and crisp way is

One of the most important steps you can take in building a visionary company is not an action, but a shift in perspective. 

Though the book was published in the nineties and readers now might feel it a little dated, the values and the concepts still hold true even today.
Finally, I would conclude that Built to Last helps the reader, whether a business owner, business student or simply the average individual, to assess the key characteristics among a list of visionary companies in the hopes that they can understand what it takes to create a visionary company.