Corporate Myths in Built to Last by Collins - Book Report/Review Example

James C. Collins’ and Jerry I. Porras’ Built to Last: A Critical Review Is there a secret as to how companies last long? Fourteen years ago, Built to Last (Collins and Porras, 1995), a landmark book hailed for breaking commonly-considered “corporate myths” that define lasting corporate organization, addresses such question. Exceptional, Visionary Companies, where derived To prove the authors’ assumptions that only companies brave enough to have strong values turn into a great company and make them stand out even beyond the success of one individual product or leadership regime, the duo of Stanford University’s Graduate School of Business, James C. Collins and Jerry I. Porras embarked on a six-year research project and resulted to Built to Last. Their painstaking labor yielded remarkable discoveries of several inherent trends and patterns in corporate behaviors that place visionary companies above the norm. Apart from this, the authors immediately clarified in the first part of their published work that their book is really all about “visionary companies,” not about charismatic visionary leaders, visionary products, visionary market insights, and corporate vision. At first, they define what a truly exceptional company is and what makes it different from the rest that they are able to last and endure different times of upheaval. By most account, the average large company’s expected life is 20 years and small enterprises have much less (Kotler, 2005). There are several given factors why company mortality occurs. Some enterprises however, simply called “visionary companies,” have lasted only above the average of twenty, and few others are surprisingly beating the near hundred year mark. Furthermore, the book identified 18 companies then compared these extraordinary organizations to its direct competitors. The selection of these premier institutions was based on different sets of qualities that really make them their respective industries’ “crown jewels.” Among the qualities that must be seen among the truly remarkable companies against others are: 1) a stellar record of making a relevant impact in the world, 2) lifespan with an average age of nearly one hundred years (at least 50 years old), 3) having survived and grappled with several generations of leadership, and lastly, 4) having surpassed the average stock market performance by a factor of fifteen since 1920s. Are Corporate Myths built to last? Collins’ and Porras’ approach in finding the answers to their assumptions and questions go beyond the common management vernacular to discover the management qualities that consistently distinguish outstanding companies. By so doing, Built to Last was able to inspire change among executives and entrepreneurs and rebut some hard-held beliefs. In particular, this paper will briefly discuss each core corporate myths and then the recommendations distilled through this study that Collins and Porras aim to share to their readers. According to these writers, very few visionary companies began with an idea. Built to Last refuted the common notion that it pays to have a great idea to start a great enterprise because even visionary companies have stumbled at first or started very slowly, and some surprisingly began without any idea at all. Another widely-held belief is that charismatic leaders are needed by companies to survive which Built to Last refuted. Collins and Porras cited examples of some popular CEOs in history that did not suit the charismatic model yet they succeeded in bringing their enterprises on top because they focus on architecting an enduring institution or “clock building” and not time telling. It was also a big question whether visionary companies put profit-making on the top of its priorities. Built to Last argued that maximizing income has never been a primordial force that drives visionary companies. In fact, it was core ideology or sense of purpose that drive these entities to lasting success. On whether there is a common set of core values that visionary companies share, the authors argued that any visionary company can still be successful so long such company believes in, lives in, and expresses its values in everything it does. And this myth put into the limelight the role played by vision statements in making an exceptional company. Collins and Porras said while it is true that such statements are set by these companies, however, this is only but one of the many steps that visionary organization establish in the wake of the perpetual alignment process that characterizes all the other basic qualities of being a model company. Collins and Porras revealed another dimension that makes visionary companies different from others. Both noted that it is not true that the only constant is change. When dealing with visionary companies, such myth cannot be more real because these organizations are always driven to progress, adapt, and grow. While such change is always eyed by visionary companies, the core ideologies are never compromised to the point of drifting away with market change or trends. From here, the remaining findings of the writers are encapsulated in the thesis that core values must be preserved while stimulating progress. Moreover, competition as a constant challenge among companies is embraced by visionary companies by setting “Big Hairy Audacious Goals” or BHAG. This reality, argued by both authors, rebut perceptions that visionary organizations shy away from daunting challenges and risks. On the notion that successful firms are concerned with bucking the bottleneck competition, the two writers maintained that visionary companies concentrate not much on what the outside competition offers them, but on beating themselves. Beating competition only comes more as a result of the incessant desire by blue chip companies to improve itself and be dissatisfied with what it achieve today. Visionary companies are always hungry to achieve more than what it produced the last time. On one hand, the book also disagreed on the myth that visionary companies can be great places to work for all kinds of people. What is true is the opposite, the authors said, because only those who will give in to the demanding standards of such company will survive and make it. Only those who will accept the exacting standard, live in and breathe the core values of the visionary companies, and surrender to the cult-like culture of the company will anybody fit in. As often is the perception by most people that successful companies stick to established plans when they move in the corporate jungle and competition, Built to Last cited that visionary organizations do not really rely on complex planning to succeed. Collins and Porras revealed that by taking the risk to experiment, do trial and error, and even through accident are what make exemplary organizations successful. The authors further enthused that visionary companies internalize that it should not embrace the “Tyranny of the OR.” This means, successful companies cannot surrender to choose between profitability or stability. But, they accept the “Genius of the AND.” Should visionary companies hire outside CEOs to propel the company to yield the fundamental change it sets itself to achieve? Built to Last replied that this is yet another commonly-held belief that may never be true of most visionary organizations. The authors revealed that only two companies listed in the book to be truly exceptional have the record of four instances of hiring a CEO that is not homegrown. Leaders that originally rose from the ranks in the organization are six times more likely to be the case than these companies’ less successful competitors. Was Built to Last built to change the way we view business? As an addition to the roster of management literatures that tackle company performance, the phenomenal success of Built to Last may be brought about by its exploration of context than the book’s content. Hence, when Built to Last was published in 1995, the book swept the management world by storm, and it remains very influential until today. Among different management circles, from the academe to the media, this book continues to extend the discussion that several popular U.S. corporate consultants, leaders and management gurus wrote about issues concerning visionary leadership vis-à-vis corporate performance. The book’s authors are evidently not writers schooled in journalism or literature as can easily be surmised in the pages of Built to Last. The construction of the thoughts and message are long winded, sometimes to the point of boring readers for being verbose and the use of business lexicons and jargons alien to ordinary readers or unschooled to business schools. It was only when Collins and Porras explored the myths that they will gradually shatter that readers fascinated with storytelling can find the real action reel in reading the book. The book’s main attraction lies in its exploration of what most people during the era would like to hear: that success is defined by how far companies are able to unite its people around a system of core values that everyone actually believed in and where goals are wildly ambitious. And incidentally, said property was shared by literatures that were published in that era, such as In Search of Excellence: Lessons from America’s Best-Known Companies, another equally blockbuster management book by Tom Peters and Robert Waterman Jr. (1982). However, the book’s striking criticisms of long-held management values and principles reap considerable amount of questions about the relevance of the book in light of the prevailing market landscape, management theories and as a literature for management practitioners. As a book about visionary companies, which Collins and Porras declared the book is really about, Built to Last seems to have carefully selected top global brands that withstood over nearly a hundred years, even during the Great Depression era. Given today’s prism, the total experience of these chosen 18 companies may not be true across other nations with different sets of business philosophies, cultures and practices. As the book now appears, people embraced the book as a dose or prescription for all other companies to emulate and follow given Collins’ and Porras’ analyses of organizations it considered visionary. But, like any prescription, it should be taken with deliberate care and careful introspection about the values that the book tries to share and what the book means today, in our era where management practice is evolving and as the world of business reels from economic recession. As is the case today, many companies are consolidating to cope with rising competitions against homegrown companies and those from abroad. Outsourcing of manpower resources is also a growing trend nowadays that even previously conservative companies are opting to save on rising costs on labor and other expenditures in the U.S. These business practices look attractive among organizations that are inspired to maintain their standing and survive the economic turmoil ahead. It is also worth noting that since the authors selected only companies from the U.S. (only 1 out of 18 is a foreign brand) there is the implied notion that to make it to the list of visionary company, one must have originated from the United States, a global superpower and a dominant nation. This impliedly give the bitter notion that poorer or developing nations cannot produce its own lasting, visionary enterprises because even if they do yet do not meet the standards that define a truly exceptional organization set by the team of Collins and Porras, one will still fail in the end. In a nutshell, the book may be summed up based on the approaches used by Collins and Porras to identify visionary companies through the core myths in business and patterns that are strikingly similar among the successful ones. This is also their attempt to provide a constant benchmark for other companies to emulate or use as a model to endure long period of success. However, now more than one decade after the book was published and became a blockbuster, most of the companies featured in the book are now all grappling with rising debt and plunging in performance and reputation. Their formerly rosy performance now seems more blurred than hopeful. Now back to our question, is there a secret as to how companies last long? No one management book can give the secret nor contain a surefire way to be successful. Sometimes theories and pragmatism do not work as best principles to achieve profitability because the world of business is too complex to be contained in books even if these are supported by hard data like historical research and others. Gleaning from this reality, one will realize that what the book give readers was a false sense of truth because by coming up with a simple treatise on visionary companies, the whole truth of the matter is not deeply explored. In a complex world, predictability and rationality are sometimes challenged by new, evolving streams of events, activities and more. The real examples, in the form of the visionary companies that Collins and Porras identified, are bound to be mounted in the lenses of the more discerning, discriminating public because there is actually something there to criticize. Works Cited Books Kotler, Philip. FAQ on Marketing. London, UK: Cyan Books, April 2005 Online “Tom Peters - In Search of Excellence.” Businessballs.com. 15 April 2009 Read More