Built to Last: Successful Habits of Visionary Companies

Built to Last: Successful Habits of Visionary Companies

by Jim Collins, Jerry I Porras

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"This is not a book about charismatic visionary leaders. It is not about visionary product concepts or visionary products or visionary market insights. Nor is it about just having a corporate vision. This is a book about something far more important, enduring, and substantial. This is a book about visionary companies." So write Jim Collins and Jerry Porras in this groundbreaking book that shatters myths, provides new insights, and gives practical guidance to those who would like to build landmark companies that stand the test of time.

Drawing upon a six-year research project at the Stanford University Graduate School of Business, Collins and Porras took eighteen truly exceptional and long-lasting companies -- they have an average age of nearly one hundred years and have outperformed the general stock market by a factor of fifteen since 1926 -- and studied each company in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day -- as start-ups, as midsize companies, and as large corporations. Throughout, the authors asked: "What makes the truly exceptional companies different from other companies?"

What separates General Electric, 3M, Merck, Wal-Mart, Hewlett-Packard, Walt Disney, and Philip Morris from their rivals? How, for example, did Procter & Gamble, which began life substantially behind rival Colgate, eventually prevail as the premier institution in its industry? How was Motorola able to move from a humble battery repair business into integrated circuits and cellular communications, while Zenith never became dominant in anything other than TVs? How did Boeing unseat McDonnell Douglas as the world's best commercial aircraft company -- what did Boeing have that McDonnell Douglas lacked?

By answering such questions, Collins and Porras go beyond the incessant barrage of management buzzwords and fads of the day to discover timeless qualities that have consistently distinguished out-standing companies. They also provide inspiration to all executives and entrepreneurs by destroying the false but widely accepted idea that only charismatic visionary leaders can build visionary companies.

Filled with hundreds of specific examples and organized into a coherent framework of practical concepts that can be applied by managers and entrepreneurs at all levels, Built to Last provides a master blueprint for building organizations that will prosper long into the twenty-first century and beyond.

Product Details

ISBN-13: 9780062119087
Publisher: HarperCollins Publishers
Publication date: 08/30/2011
Series: Good to Great , #2
Format: NOOK Book
Pages: 368
Sales rank: 333,746
File size: 4 MB

About the Author

Jim Collins is a student and teacher of what makes great companies tick, and a Socratic advisor to leaders in the business and social sectors. Having invested more than a quarter-century in rigorous research, he has authored or coauthored six books that have sold in total more than 10 million copies worldwide. They include Good to GreatBuilt to LastHow the Mighty Fall, and Great by Choice.

Driven by a relentless curiosity, Jim began his research and teaching career on the faculty at the Stanford Graduate School of Business, where he received the Distinguished Teaching Award in 1992. In 1995, he founded a management laboratory in Boulder, Colorado.

In addition to his work in the business sector, Jim has a passion for learning and teaching in the social sectors, including education, healthcare, government, faith-based organizations, social ventures, and cause-driven nonprofits.

In 2012 and 2013, he had the honor to serve a two-year appointment as the Class of 1951 Chair for the Study of Leadership at the United States Military Academy at West Point. In 2017, Forbes selected Jim as one of the 100 Greatest Living Business Minds.

Jim has been an avid rock climber for more than forty years and has completed single-day ascents of El Capitan and Half Dome in Yosemite Valley.

Learn more about Jim and his concepts at his website, where you’ll find articles, videos, and useful tools. jimcollins.com

Jerry I. Porras is the Lane Professor of Organizational Behavior and Change, Emeritus, at the Stanford University Graduate School of Business where he served as an Associate Dean for Academic Affairs and frequent executive education teacher. He studies ways of aligning companies around their purpose and core values to produce lasting high performance.


Boulder, Colorado

Date of Birth:

January 25, 1958

Place of Birth:

Aurora, Colorado


B.S. in mathematical sciences, Stanford University, 1980; M.B.A., Stanford University, 1983

Read an Excerpt

Chapter One

This is not a book about charismatic visionary leaders. It is not about visionary product concepts or visionary market insights. Nor even is it about just having a corporate vision.

This is a book about something far more important, enduring, and substantial. This is a book about visionary companies.

What is a visionary company? Visionary companies are premier institutions-the crown jewels - in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them. The key point is that a visionary company is an organization - an institution. All individual leaders, no matter how charismatic or visionary, eventually die; and all visionary products and services-all "great ideas" - eventually become obsolete. Indeed, entire markets can become obsolete and disappear. Yet visionary companies prosper over long periods of time, through multiple product life cycles and multiple generations of active leaders.

Pause for a moment and compose your own mental list of visionary companies; try to think of five to ten organizations that meet the following criteria:

  • Premier institution in its industry
  • Widely admired by knowledgeable businesspeople
  • Made an indelible imprint on the world in which we live
  • Had multiple generations of chief executives
  • Been through multiple product (or service) life cycles
  • Founded before 1950
Examine your list of companies. What about them particularly impresses you? Notice any common themes? What might explain their enduring quality and prosperity. How might they be different from other companiesthat had the same opportunities in life, but didn't attain the same stature?

In a six-year research project, we set out to identify and systematically research the historical development of a set of visionary companies, to examine how they differed from a carefully selected control set of comparison companies, and to thereby discover the underlying factors that account for their extraordinary long-term position. This book presents the findings of our research project and their practical implications.

We wish to be clear right up front: The "comparison companies" in our study are not dog companies, nor are they entirely unvisionary. Indeed, they are good companies, having survived in most cases as long as the visionary companies and, as you'll see, having outperformed the general stock market. But they don't quite match up to the overall stature of the visionary com- panies in our study. In most cases, you can think of the visionary company as the gold medalist and the comparison company as the silver or bronze medalist. We chose the term "visionary" companies, rather than just "successful" or "enduring" companies, to reflect the fact that they have distinguished themselves as a very special and elite breed of institutions. They are morethan successful. They are more than enduring. In most cases, they are the best of the best in thdir industries, and have been that way for decades. Many of them have served as role models -icons, really - for the practice of management around the world. (Table 1. 1 shows the companies in our study. We wish to be clear that the companies in our study are not the only visionary companies in existence. We will explain in a few pages how we came up with these particular companies.)

Yet as extraordinary as they are, the visionary companies do not have perfect, unblemished records. (Examine your own list of visionary companies. We suspect that most if not all of them have taken a serious tumble at least once during their history, probably multiple times.) Walt Disney faced a serious cash flow crisis in 1939 which forced it to go public; later, in the early 1980s, the company nearly ceased to exist as an independent entity as corporate raiders eyed its depressed stock price. Boeing had serious diffi-culties in the,mid-1930s, the late 1940s, and again in the early 1970s when it laid off over sixty thousand employees. 3M began life as a failed mine and almost went out of business in the early 1900s. Hewlett-Packard faced severe cutbacks in 1945; in 1990, it watched its stock drop to a price below book value. Sony had repeated product failures during its first five years of life (1945-1950), and in the 1970s saw its Beta format lose to VHS in the battle for market dominance in VCRs. Ford posted one of the largest annual losses in American business history ($3.3 billion in three years) in the early 1980s before it began an impressive turnaround and long-needed revitalization. Citicorp (founded in 1812, the same year Napoleon marched to Moscow) languished in the late 1800s, during the 1930s Depression, and again in the late 1980s when it struggled with its global loan portfolio. IBM was nearly bankrupt in 1914, then again in 1921, and is having trouble again in the early 1990s.

Table 1.1

The companies in our Research Study

Visionary Company

American Express
General Electric
Johnson & Johnson
Philip Morris
Procter & Gamble
Walt Disney

Comparision Company

Wells Fargo
McDonnell Douglas
Chase Manhattan
Texas Instruments
Bristol-Myers Squibb
Howard Johnson
RJR Nabisco

Built to Last. Copyright © by James C. Collins. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

Table of Contents

Acknowledgements ..... ix
Introduction to the Paperback Edition ..... xiii
Preface ..... xxiii
Chapter 1: The Best of the Best ..... 1
Chapter 2: Clock Building, Not Time Telling ..... 22
Interlude: No "Tyranny of the OR" ..... 43
Chapter 3: More Than Profits ..... 46
Chapter 4: Preserve the Core/Stimulate Progress ..... 80
Chapter 5: Big Hairy Audacious Goals ..... 91
Chapter 6: Cult-Like Cultures ..... 115
Chapter 7: Try a Lot of Stuff and Keep What Works ..... 140
Chapter 8: Home-Grown Management ..... 169
Chapter 9: Good Enough Never Is ..... 185
Chapter 10: The End of the Beginning ..... 201
Chapter 11: Building the Vision ..... 219
Epilogue: Frequently Asked Questions ..... 241
Appendix 1: Research Issues ..... 249
Appendix 2: Founding Roots of Visionary Companies and Comparison Companies ..... 256
Appendix 3: Tables ..... 277
Appendix 4: chapter Notes ..... 305
Index ..... 334

Reading Group Guide

"In an ironic twist, I now see Good to Great not as a sequel to Built to Last, but more of a prequel. Good to Great is about how to turn a good organization into one that produces sustained great results. Built to Last is about how you take a company with great results and turn it into an enduring great company of iconic stature." --Jim Collins
An Introduction

What distinguishes a successful company from the kind of company whose very name becomes a cultural icon, whose place is fixed in the public consciousness? An innovative and inspiring study of the culture and longevity of some of America's most successful organizations, Built to Last is a blueprint for building organizations that will endure long into the twenty-first century.

In Built to Last, James C. Collins and Jerry I. Porras identify the unique characteristics of visionary companies and show how any business can cultivate them. From Merck to Philip Morris, from General Electric to Nordstrom, from Ford to Sony, visionary companies display an amazing resilience and an unshakable commitment to their core ideology that allows them to surpass even their more temporarily successful competitors and achieve a lasting place in the cultural landscape.

By examining the founding and history of these companies, the ways in which they have handled both adversity and success, and their continued commitment to their corporate identity, Collins and Porras reveal the unique characteristics of these visionary companies and show what actions other companies may take to achieve the same level of long-lastingperformance.

Questions for Discussion of Built to Last
  • Why do you think the authors chose to use the term "visionary" to describe the companies profiled in the book rather than "successful" or "great"?

  • The authors state that "as extraordinary as they are, the visionary companies do not have perfect, unblemished records" and then cite specific examples: Walt Disney faced a serious cash flow crisis in 1939 which forced it to go public. Boeing had serious difficulties in the mid-1930s, the late 1940s, and again in the 1970s when it laid off over sixty thousand employees. What allowed these two and the other visionary companies to bounce back from severe adversity?

  • Myth number one debunked in the book is that "it takes a great idea to start a great company." Do you agree that this is a myth? Cite some examples of visionary companies that did not start with a great idea. Discuss the other myths that the authors "shatter."

  • The authors quote Bill Hewlett of Hewlett-Packard as saying, "When I talk to business schools occasionally, the professor of management is devastated when I say that we didn't have any plans when we started-we were just opportunistic. We did anything that would bring in a nickel." Why do you think this is a disconcerting notion to many people, in this particular case to management professors? What is that they want to hear?

  • Which of the visionary companies do you think is the most successful, and why? How do its business practices differ from its "comparison" company?

  • The authors believe their findings "will apply more in the twenty-first century than in the twentieth. In particular, the essential ideas to come from our work…will continue to be key concepts long into the future." Do you agree that their findings will endure well into the future? Are any of the "visionary" companies, in your opinion, not as successful today as they were when the authors first wrote about them in 1995?

    Questions for Discussion about both Built to Last and Good to Great
  • The catalyst for Good to Great came about in part because a McKinsey partner remarked to Jim Collins that the companies written about in Built to Last "were, for the most part, always great. They never had to turn themselves from good companies into great companies… But what about the vast majority of companies that wake up and part way through life and realize that they're good, but not great?" What do you think of this statement? What is there to be learned from each of the books?

  • Jim Collins said that Good to Great is a prequel to Built to Last. Do you see it this way? Do the two books work in tandem with one another?

  • In Good to Great, Wells Fargo is profiled as one of the "good-to-great" companies. In Built to Last, Wells Fargo is not one of the visionary companies but rather the comparison for visionary company American Express. Discuss the implications of this.

  • Collins states, "We believe that almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously applies the framework of ideas we've uncovered." Do you agree with this statement? Why or why not? In what instances do you think the concepts set forth in Good to Great and Built to Last would work best? In what instance do you think they would not be successful? Do you think the theories laid out in each of the books can be applied to any industry?

  • Which of the company success stories did you find the most surprising, and why?

  • Customer Reviews

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    Built to Last 4.6 out of 5 based on 0 ratings. 28 reviews.
    John_Clinton More than 1 year ago
    Fascinating book and no coincidence that we still talk about it 17 years after it was published. While some reviewers are criticising that not all companies in the study continue to be successful I think they both miss the point and did not read the author's claims carefully. They study a group of companies which was exceptionally successful during the observation period. This neither implies that these companies will continue to do well nor does it prevent us to learn from their past experiences. What is more of a challenge for the book is the mind frame in which it was written. Authors' are not able to fully escape the main debates of their time (and they probably should not). For 'Built to Last' that means substantial space being devoted to vision and mission (hotly debated in the 1990s). I recommend that you also read 'Enduring Success: what we can learn from the history of outstanding corporations' - a new book that picks up topics we care about today (e.g. innovation versus execution), using the same research approach as 'Built to Last'.
    lemme14 More than 1 year ago
    Full disclosure: I actually read this after Good to Great (by the same author). While the books are not one in the same, I did feel as though I may have benefited slightly more by reading this first and Good to Great second. Either way, these are two must read business books. A quick summary of Built to Last: Are you a clock-builder/architect or timekeeper? Embrace the and, which is the tyranny of the or. Preserve the core and stimulate progress. Seek consistent alignment. Every one of these concepts applies to those look to build their company and succeed in the process. You will learn a lot about where your company is and what their vision is just by reading this book. Do they have BHAG's (big, hairy, audacious goals)? Read and find it. It will definitely open your eyes and motivate you to do more.
    shawnd on LibraryThing More than 1 year ago
    An innovative business book. Collins - a business school professor - decided to do an experiment using the scientific method to identify using stock performance companies that were majorly outperforming peers, then comparing them to sister companies or competitors who were performing on par with the market. From that comparison, Collins identified-through extensive, exhaustive research and interviews-the differences in the company pairings. Regardless of the findings, the model of approach and study is worth reading the book. However, the findings are very intriguing and definitely unexpected. Compelling.
    markdeo on LibraryThing More than 1 year ago
    Very well written and compelling. One of my favorites. There is tremendous credibility with a well documented research study. I hold this book in the same regard as Leading the Revolution by Gary Hamel. The 12 myths about companies are great. Very basic and easy to internalize about your business. You will learn the characteristic of visionary companies. A must read for any CEO or business person.
    jpsnow on LibraryThing More than 1 year ago
    This is on the reading list I have of best all-time business books. It's thoughtful but not on par with "In Search of Excellence" or Collin's more recent "Good to Great." Their approach is valid for picking up a list of excellent performers and comparison firms that had the same opportunity. I'm not sure these firms will continue to last (Wal-Mart is already faltering), but the authors point out it's a matter of continuing the habits. Regarding the "genius of And" I've observed that certain leaders assume this means they should try to have it all. One former co-CEO of my current firm often spoke about and did this. There is some genius in going down one path or another. Their 5 methods are: 1. Big, Hairy Audacious Goals, 2. Cult-like Cultures, 3. Try a Lot of Stuff and Keep What Works, 4. Home-Grown Management, 5. Good Enough Never Is. Other important points: the value of trying things (bias for action and appreciating the value of failures). Quoting Richard Carlton of 3M: "We must possess a two-fisted generating and testing [process] for ideas... Every idea evolved should have a chance to prove its worth, and this true for two reasons: 1) if it is good, we want it; 2) if it is not good, we will have purchased our insurance and peace of mind when we have proved it impractical."
    ndrewtan on LibraryThing More than 1 year ago
    Did not quite complete this book - I guess after reading good to great, this book is like a repeat of the same (though it came first). But this book, I will give credit for some other powerful concepts such as the BHAG.
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    Guest More than 1 year ago
    I am reading this book and am finding it hard to get through. I think I just expected more from all the hype - but the ideas in the book are not something that are new to me.
    Guest More than 1 year ago
    After reading many business books, this one truly incorporates many common sense applications, and I would recommend it for several reasons: ¿ Jim Collins identifies three critical factors to running a great business of any size. ¿ He develops a strongly supported profile of what is necessary to be the leader of a great enterprise in the modern day. And it is most likely very different than what you may think. ¿ He presents actual businesses that were built from, and resulting from, ethical behavior despite the perceived compromises ethical behavior brings. I found this to be the most relevant issue - in light of the current climate of corporate scandals.
    Guest More than 1 year ago
    This superbly researched book explains to the reader how companies achieve enduring success. I have been in a senior executive role for over 20 years, and I learned a great deal. This book is a classic.
    Guest More than 1 year ago
    This is a groundbreaking book that tells us how to build landmark companies that stand the test of time. The subject of Collins' and Porras' study was 'What makes the truly exceptional companies different from the other companies?' By answering such questions, Collins and Porras go beyond the incessant barrage of management buzzwords and newfound fads to discover timeless qualities that have consistently distinguished outstanding companies. They also provide inspiration to entrepreneurs by destroying the false but widely accepted idea that only charismatic visionary leaders can build visionary companies. This book is an academic treatise, and yet it is superbly written and an exciting read. You could fall asleep on most thesis but this one kept me turning the pages despite being sleepy from a long day's work. I would recommend it to anyone who is serious not about just making quick money, but intent on building sustainable businesses that last.
    Guest More than 1 year ago
    Overall, this is an excellent book about how to build a company that will stand the test of time. The authors present the information in a format that is easy to read for the senior executive or someone with no business experience. While the authors present detailed and informative examples of actions that businesses have taken to be successful, the number of examples can become cumbersome. If someone is looking for a quick reference of strategies to improve a company, this is probably not the book for them, but if an individual is looking for an in depth report on techniques used by companies, it would be a useful tool. This book's intent is to show you the cogs that matter and give you some framework by which to align them to drive a company constantly/relentlessly forward. Often managers get lost in the P&L of the day. While that is important, it may not be enough to keep the fiber of the organization together. This book can serve as a reminder to us all of what is important to maintain a business that is financially successful but more importantly keeps its employees and customers happy. This book's simple goal is to shatter two myths that many believe a visionary company is founded upon, the incredibly innovative product and the charismatic leader.
    Guest More than 1 year ago
    Built to Last by James C. Collins and Jerry I. Porras is an essential guide for any new or old organization looking to get started or revitalize its fundamental foundation and business practices. Assembled as a result of a six year long study examining eighteen remarkable and long-lasting companies in relation to each companies top ¿market¿ competitor, this book genuinely shows what distinguishes truly visionary companies from the rest. This books begins by briefly describing what visionary companies were chosen for the study and why. For those interested, visionary companies included organizations such as Wal-Mart, American Express, IBM, and Walt Disney, just to name a few. According to Collins and Porras, a visionary company can neither be founded on a single great idea nor rely on an individual charismatic leader. Those in a visionary company must be willing and able to put the organization first in order not only to make an impact after the death of any individual leader but also to stand the test of time. Essential in any visionary company is a statement of what the company stands for and why it exists ¿ its core ideology consisting of its core values and core purpose. For example, a company must exist for a number of reasons beyond just making money. Along with this statement of core ideology must come a plan for action, a plan to stimulate and drive progress in an organization toward an envisioned future. A key concept from this book is preserving the core of an organization while stimulating progress within that organization. Change in an organization is a constant with respect to everything but the organization¿s core ideology. A visionary organization can stimulate progress in a number of ways from setting BHAGs or Big Hairy Audacious goals, to creating and promoting a cult-like culture within the organization, to trying a lot of stuff and keeping what works, and finally, to relying on homegrown management. In a visionary company, good enough never is, there is never an end to the movement for continual progress, and every member in the organization is a key player encouraged to take personal initiative. A visionary company is a great place to work if and only if you strongly agree and adhere to its values and purpose. This book was not only insightful, but it provided the steps necessary for any organization to take strides toward becoming a visionary company. Although information at times was repetitive, it proved useful in hammering home key concepts crucial to understanding what makes a visionary company truly visionary. The book was an easy read, and the authors were quick to point out that this book is not the ¿ultimate truth¿ when it comes to understanding organizations. I would recommend this book to anyone. It is worth a read, and definitely worth the money!
    Guest More than 1 year ago
    This is a great book. In addition, I recommend 'Strategic Organizational Change' by Beitler.
    Guest More than 1 year ago
    excellent book for business students
    Guest More than 1 year ago
    Why settle for being great when you can be monumentally stupendous? An impecably researched book (the appendix in the back of this book could be a separate publication in and of itself) that breaks many of the stereotypical beliefs of success experienced by large corporations. Even if you are not self-employed the principles described will help anyone live a more satisfying life. And by the way, nice guys (and nice corporations) DO finish first.
    Guest More than 1 year ago
    A very powerful guide to start a high-tech company. Many myths are broken. An excellent guide to create a vision and build a visionary organization. It really teaches you how to start the right organization, rather than start with the right idea.
    Guest More than 1 year ago
    We can learn new things and new ways of looking into things. Also we can discover why visionary companies stay forever. Money seems to be everything in our lives and it is the reason for these companies' existence however it is not what drives these visionary companies. The characteristics defined to select the most successful companies are excellent measures of quantity and quality. The key idea, that success does not depend on having an early vision and charismatic leaders but on identity, culture and commitment to the company steer us into different paths for future success. It places the focus, not only on the executive team to set the tone, but also on the hiring process and the freedom people are given to create. It will give you new insights and most importantly ways to implement.
    Guest More than 1 year ago
    Great book for the serious business person. Helps identify focus and cultivate potential.