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Built to Last Book Review: Creating an Enduring, Great Company

Introduction to Built to Last: Creating Companies that Excel for the Long-Term

Released in 1994, Built to Last: Successful Habits of Visionary Companies by business consultants and researchers Jim Collins and Jerry I. Porras is one of the most influential business books ever written. The book examines the history, practices, and habits of 18 incredibly successful and enduring Fortune 500 corporations to discover what allows them to thrive for multiple generations and across decades.

Unlike many business books focused on short-term wins, Built to Last highlights that great companies focus on building organisations that deliver value 5, 10, 50, or even 100+ years into the future. For entrepreneurs and executives, the book provides guidance, frameworks, and food-for-thought around instilling timeless core values, cultivating strong company cultures centred around ideals, and leading in inspirational ways that drive progress.

With examples from paradigm-changing companies like Disney, GE, 3M, Boeing, and others, Collins and Porras provide a thought-provoking blueprint for those aiming high and wanting to construct something built on excellence from the inside out. This book review will highlight key insights from Built to Last relevant to modern-day business builders.

Lasting greatness starts with core ideology and values.

A core thesis in Built to Last is that enduringly great companies are not primarily motivated by profit but by their core ideology and values. This guides decision-making in a way that balances purpose and sustained profitability.

The book refers to this blend of core values and purpose as a company’s “core ideology,” almost like an organisation’s DNA. Collins and Porras argue visionary companies protect, preserve, and enhance their core ideologies across generations while also fueling growth.

Articulating What Your Company Stands For

A key takeaway for leaders is to clearly articulate the core values and purpose of your organisation, which supersedes any single goal or product.

This means defining why the company exists beyond making money, along with the 3-5 core tenets or values it will uphold no matter what. Collins and Porras cite P&G’s famous purpose to “provide branded products and services of superior quality and value.” This focus on service and quality has been a North Star for P&G since the 1800s.

Balancing Core Ideology with Progress

Importantly, a focus on core purpose and values does not mean companies don’t adapt. Built to Last firms evolve strategies, policies, tactics, product lines, etc. while staying grounded in their ideology.

As an example, while innovation has always been a core part of the 3M identity, the company has shifted its focus areas across decades from sandpaper to masking tape, post-its, and more.

The framework here is “preserve the core and stimulate progress.” Company builders must avoid the stagnation that can happen when you only focus on a core mission while also not losing sight of the foundational tenets.

Questions to Define Your Company’s Core Ideology

Collins and Porras provide a useful set of reflective questions leaders should ask to shape an enduring core ideology:

  • Purpose: Why do we exist? What is our fundamental reason for being?
  • Core Values: What core values and priorities guide our company? What behaviours will we accept or reject?
  • Envisioned Future: If we succeed wildly, what does the organisation look like 20+ years from now?
  • Audacious Goals: What ambitious, aggressive, and audacious goals can we set to force ourselves to achieve the vision?
  • Brand Promise: What is the covenant or “promise” we make and keep with customers and employees? What can people expect from associating with us?

Companies that create value for generations go through this exercise of soul-searching and articulating the core essence of a company. It serves as a guide when disruptions inevitably come.

Preserve the core and stimulate progress:

The framework of balancing preserving the core ideology with stimulating progress comes up repeatedly in Built to Last as the key ongoing “yin and yang” that allows companies to thrive for the long haul.

But what does this look like in practice across product innovation, company culture, branding, etc.?

Driving Innovation While Staying Grounded in Identity

Collins and Porras highlight that enduringly great companies innovate relentlessly while staying grounded in timeless ideals. Some examples across tech and consumer brands:

  • Disney’s Evolution: While known for animation, Disney has evolved across films, theme parks, Broadway shows, toys, streaming, and more, but keeps magic, childhood joy, and storytelling at the centre.
  • 3M’s Innovation Pipeline: From sandpaper to masking tape to post-its, 3M has innovated for over 100 years, but with scientific experimentation at its core.
  • Microsoft’s Platform Shifts: Microsoft has navigated multiple computing waves (PCs, servers, the Internet, and mobile) but with software tools that empower productivity and efficiency.

The key is to deeply understand the timeless value and impact you provide and deliver exciting new ways to fulfil that purpose over time. But it is grounded in a mission.

Protecting Culture and Brand Relevance

Beyond product innovation, Collins and Porras cite the companies that evolve branding, messaging, and culture to re-contextualise enduring principles:

  • Coca-Cola’s brand has stayed relevant across trends, from the 1960s to internet memes, by adaptively expressing values of joy, refreshment, and authenticity.
  • Levi’s: Levi’s has modernised messaging across generations but activated timeless principles of rebellious optimism and American grit through marketing.
  • Ford: Ford has adopted technology from manufacturing lines to hybrid cars, but always with a people-first, integrity-driven approach to evolving with the times responsibly.

Key Guidepost Questions on Evolution:

Some questions the book suggests companies ask when evaluating evolution are:

  • Preserve the Core: How does this innovation align with and enhance our core purpose and values?
  • Stimulate Progress: Does this directly advance our ability to achieve our envisioned future and audacious goals?
  • Culture Fit: Do these shifts match or enhance our desired culture and the way our employees operate?
  • Brand Fit: Will these changes improve our brand promise and relationship with customers?

Creating Cult-Like Cultures

Collins and Porras also heavily emphasise that in order for companies to be built to last, they must nurture strong cultures centred around ideals that breed loyal, cult-like followings internally and externally.

They specifically differentiate “cult-like cultures” from typical corporate cultures focused on perpetuating traditions, artefacts, and the status quo. Enduringly great companies shape cultures that inspire devotion by giving people identity, meaning, and purpose.

Companies with strong, values-oriented cultures outperform the general market by a 680% margin over 15 years, according to recent research, so there are clearly tangible benefits.

Hallmarks of positive “cult” cultures the book cites:

Guiding Ideologies

Team members feel bound together by shared ideologies. Common purpose and value sets guide decision-making, integrity, and dedication across the company.

Indoctrination into Core Values

Onboarding and training rigorously reinforce the guiding principles. Rituals reinforce ideological tenets.

Boundarylessness

Barriers are broken down between functions or levels. All employees feel they are working together towards common goals.

Liberating Constraints

People paradoxically feel “set free” to do their best work while operating within the constraints of the ideology. Core values empower innovation.

Overall, companies with magnetic cultures attract and retain top talent while also informing customer loyalty. Shaping these types of alignment and devotion allows companies to build institutions primed for the long run.

Fanatical Discipline to Preserve the Core and Stimulate Progress

Finally, Collins and Porras cite that enduring companies leverage leadership, governance, and metrics systems that fanatically impose discipline on preserving the core ideology and stimulating progress towards the envisioned future.

This discipline ensures urgent priorities don’t override timeless principles while also constantly advancing innovations that renew relevance and impact over decades.

Leadership Commitment

Senior leaders zealously orient employee reviews, promotions, training, and goals around reinforcing core values and achieving BHAGs. BHAG stands for “Big Hairy Audacious Goal” and is terminology introduced by Collins and Porras in Built to Last.

Organisation Design

Functional silos are broken down to foster innovation. Hybrid roles bridge gaps between product, tech, marketing, business development, etc. Matrixed teams rapidly prototype vs. rigid reporting lines, stifling creativity.

Core Metrics

Ongoing measurement provides clear indices around preserving core values (e.g., employee or customer satisfaction related to values) while also tracking markers of progress towards purpose.

Key Takeaways: Framework for Building Your Built-to-Last Company

Drawing inspiration from the enduring companies profiled across Built to Last along with the research-backed insights from Collins and Porras, here is a summary blueprint for leaders aiming to construct sustainable, impactful companies primed to excel for the next 50+ years:

Shape-Enduring Core Ideology

  • Articulate Core Purpose: Define the fundamental reason for your company’s existence beyond profits.
  • Identify Core Values: Determine the 3–5 essential tenets that guide decisions.
  • Set an Envisioned Future: Illustrate an ambitious vision for just how big an impact your company can create.
  • Set Audacious Goals: Outline bold 5- to 10-year objectives to provide tangible steps towards the vision.
  • Outline Brand Promise: Document the pledge to customers and employees that captures expectations.

Balance: Preserving the Core While Progressing

  • Innovate Grounded in Mission: Launch innovations aligned to purpose while updating products, tech, and business models.
  • Evolve Culture Deliberately: Nurture the ideal-based culture by reinventing rituals, perks, and campuses while keeping core tenets intact.
  • Refresh Branding Mindfully: Modernise branding and messaging while leveraging your enduring attributes and principles that never go out of style.

Install fanatical discipline systems.

  • Value-Based Leadership Commitment: Leaders zealously preach and operationalize core ideology and progress in reviews, promotions, and decisions.
  • Foster Innovation Organisation Design: Break silos, enable matrixed teams, flat architecture, and internal mobility focused on the mission.
  • Rigorous Core Metrics: Religiously preserve the core (value satisfaction) while also tracking progress towards goals and purpose.

Wrap Up

Over 25 years since its publication, Built to Last remains an indispensable playbook for founders and executives who aim to construct iconic companies that prosper for generations. While the examples span industrial giants, Collins and Porras’ principles around purpose-driven leadership grounded in timeless values translate to organisations of all sizes seeking greatness built to stand the test of time.

 

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