This is the first book written by the Good to Great authors, so since I liked Good to Great, I figured I should pick this up from the library and read it as well. As in Good to Great, they found a group of example companies that they wanted to study. In this case, they were looking for visionary companies that stood the test of time, so they chose companies that had been in existence for more than fifty years, and consistently successful throughout that time. Then they chose comparison companies that were in the same industry, but didn’t measure up in one way or another, and looked for differences between their controls and their examples.
The central message of Built to Last is “Preserve the core, but stimulate progress”. Seeing how the visionary companies evolved over most of the last century let the authors observe that while the companies were continually changing in response to the market and to their customers, they had an overall set of core values to which they held constant. The comparison companies often lost ground when they changed their focus, swayed by chasing down every last dollar they could. The idea here is illustrated by a quote from David Packard which I like:
“Profit is not the proper end and aim of management – it is what makes all of the proper ends and aims possible.”
The visionary companies stood for something more than profits, more than maximizing shareholder value.
But while the visionary companies refused to change their core values, they were persistent in changing everything else, from which markets they pursued, to their corporate structure. This is the “stimulate progress” aspect, which the authors illustrate with chapters including “Big Hairy Audacious Goals” (bet-the-company type projects which could fail, but give everybody in the company a focus and an enormous amount of pride when they succeed) and “Try a lot of stuff and keep what works”. They talk about defeating the “Tyranny of the OR” where the company feels forced to choose between options such as environmental responsibility and corporate profits, and instead embracing the “Genius of the AND”, where the company finds a way to do both.
One of the things I liked about the book was its emphasis on creating a cult-like culture that reinforced the core values of the company, with examples such as Walmart’s pep rallies and Nordstrom’s emphasis on service. Every aspect of the company, from its physical layout to its incentive structure, needs to reflect the core values. If there are any mis-alignments, employees notice, and it’s de-motivating. But when everything is in place, a virtuous circle erupts, where everybody is feeding off of everybody else, and people can achieve far more than they would working on their own because they’re working for something more than themselves; they’re working for their coworkers, for their company.
Being the self-obsessed navel-gazer that I am, the book also made me wonder about what my core values are. What are the values I believe in and won’t walk away from? What are merely things I’m doing for the moment? It’s an interesting question. When answering it for companies, the authors suggested finding values that would hold true for a century, which eliminated any possibility of references to specific technologies or even market niches, since those might change. When answering it for myself, it makes me wonder what I would hold true for the rest of my life, regardless of where my career or life might take me.
Anyway. Decent book. Relatively quick read. I liked Good to Great more, possibly because I read it first, but they’re both good.
P.S. I upgraded WordPress this morning to the latest version. It looks like it went seamlessly, but if you notice anything weird, let me know.