Built to Last: Successful Habits of Visionary Companies
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Built to Last: Successful Habits of Visionary Companies is a book written by Jim Collins and Jerry I. Porras (Publisher: HarperBusiness October 26, 1994) . The book outlines the results of a six-year research project into what makes enduring great companies. Two primary objectives for the authors’ research were: “to identify underlying characteristics are common to highly visionary companies” and “to effectively communicate findings so they can influence management.” The research conducted by Collins and Porras and articulated in Built to Last is presented with examples based on stories and validated by research data.
[edit] Visionary defined
Collins and Porras listed a total of eighteen companies they identified as ‘visionary.’ They defined a visionary company as one that is a premier institution in its industry, is widely admired by knowledgeable businesspeople, made an imprint on the world, had multiple generations of Chief executive officers (CEOs), had multiple product/service life cycles, and was founded before 1950. The list of visionary companies was determined based on the results of a survey of 1,000 CEOs. The authors ensured representation across all industries and various sized organizations by sampling from Fortune 500 industrial companies, Fortune 500 service companies, Inc. 500 private companies and Inc. 100 public companies. The survey yielded a 23% response rate with 3.2 companies listed per response. An important caveat the authors express is the fact that through their research, they can claim a correlation, not a causal link between their findings and the success of companies.
[edit] Companies identified
The list of eighteen companies identified as visionary:
- 3M,
- American Express,
- Boeing,
- Citicorp (now Citigroup),
- Disney,
- Ford,
- General Electric,
- Hewlett Packard,
- IBM,
- Johnson & Johnson,
- Marriott,
- Merck,
- Motorola,
- Nordstrom,
- Philip Morris (now Altria),
- Proctor & Gamble,
- Sony, and
- Wal*Mart.
These companies have taken leadership roles in their industries, offering innovative products and services and consistently outsmarting rivals. What made the research particularly useful and interesting is that Collins and Porras compared and contrasted these visionary companies with a control set of rivals. For instance, Boeing was compared and contrasted with Douglas Aircraft, Marriott was compared and contrasted with Howard Johnson, and Merck was compared and contrasted with Pfizer. The findings are based on what the visionary companies do that is different than close competitors who have achieved a high level of success, but not to the extent of the visionary companies. From 1926 through 1990 the comparison companies outperformed the general stock market by two times whereas the visionary companies outperformed the market by fifteen times.
