Right through my B-School days, I have been very much fascinated by what we call "Visionary Companies" and "Visionary Leaders". I used to dream about these companies and imagine how would it be build a that sort of a Business Organization - "A Visionary Company". What it takes for anyone to build that kind of an Organization? What are the ingredients of such an institution? While thinking about all these, I came across a book titled "Built to Last" by James C Collins and Jerry I. Porras. This is not a business book but a book about building enduring, great human institutions of any type-volunteer, schools, churches and governments". This is not a book about visionary leaders. It is a book about 18 visionary companies—that are the crown jewels—in their industries:
- Premier institutions in its industry
- Widely admired by their peers
- 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
The author's research findings has shattered twelve myths about Visionary Companies and Visionary Leaders:
Myth 1: It takes a great idea to start a great company.
Reality: Starting a company with a Great Idea might be a Bad Idea. Few of the visionary companies began life with a great idea. In fact, some began life without any specific idea, and a few even began with outright failures. Furthermore, regardless of the founding concept, the visionary companies were significantly less likely to have had early entrepreneurial success than the comparison companies in our study. Like the tortoise and the hare, visionary companies often get off to a slow start, but win the long race.
Myth 2: Visionary companies require great and charismatic visionary leaders.
Reality: A charismatic visionary leader is absolutely not required for a visionary company and, in fact, can be detrimental to a company's long-term prospects. Some of the most significant CEOs in the history of visionary companies did not fit the model of the high-profile, charismatic leader - indeed, some explicitly shied away from that model. Like the founders of the United States at the Constitutional Convention, they concentrated more on designing enduring institutions than on being great individual leaders.
Myth 3: The most successful companies exist first and foremost to maximize profits.
Reality: Maximizing shareholder wealth has not been the dominant driving force or primary objective through the history of the visionary companies. They have pursued a cluster of objectives, of which making money is only one - and not necessarily the primary one. Yes, they seek profits, but they're also guided by a core ideology: core values and a sense of purpose beyond just making money. Yet, paradoxically, we found that the visionary companies make more money than the more purely profit-driven comparison companies.
Myth 4: Visionary companies share a common subset of "correct" core values.
Reality: There is no right set of core values for a visionary company. Indeed, two companies can have radically different ideologies, yet both be visionary. Core values in a visionary company don't even have to be "enlightened" or humanistic (although they often are). The crucial variable is not the content of a company's ideology, but how deeply it believes in its ideology and how consistently it lives, breathes, and expresses it in all that it does. Visionary companies do not ask, "What should we value?" They ask, "What do we actually value deep down to our toes?"
Myth 5: The only constant is change.
Reality: A visionary company almost religiously preserves its core ideology, changing it seldom, if ever. Core values in a visionary company form a rock-solid foundation and do not drift with the trends and fashions of the day; in some cases, the core values have remained intact for well over one hundred years. And the basic purpose of a visionary company - its reason for being - can serve as a guiding beacon for centuries, like an enduring star on the horizon. Yet, while keeping their core ideologies tightly fixed, visionary companies display a powerful drive for progress that enables them to change and adapt without compromising their cherished core ideals.
Myth 6: Blue chip companies play it safe.
Reality: Visionary companies may appear straitlaced and conservative to outsiders, but they're not afraid to make bold commitments to Big Hairy Audacious Goals (BHAGs). Like climbing a big mountain or going to the moon, a BHAG may be daunting and perhaps risky, but the adventure, excitement, and challenge of it grabs people in the gut, gets their juices flowing, and creates immense forward momentum. Visionary companies have judiciously used BHAGs to stimulate progress and blast past the comparison companies at crucial points in history.
Myth 7: Visionary companies are great places to work, for everyone.
Reality: Only those who fit extremely well with the core ideology and demanding standards of a visionary company will find it a great place to work. If you go to work at a visionary company, you will either fit and flourish or you will likely be expunged like an antibody. There's no middle ground. Visionary companies are so clear about what they stand for and what they're trying to achieve that they simply don't have room for those unwilling or unable to fit their exacting standards.
Myth 8: Highly successful companies make their best moves by brilliant and complex strategic planning.
Reality: Visionary companies make some of their best moves by experimentation, trial and error, opportunism, and - quite literally - accident. What looks in retrospect like brilliant foresight and planning was often the result of "Let's just try a lot of stuff and keep what works." In this sense, visionary companies mimic the biological evolution of species. We found the concepts in Charles Darwin's Origin of Species to be more helpful for replicating the success of certain visionary companies than any textbook on corporate strategic planning.
Myth 9: Companies should hire outside CEOs to stimulate fundamental change.
Reality: In 1,700 years of combined lifespans across the visionary companies, we found only four individual incidents of going outside for a CEO - and those in only two companies. Homegrown management rules at the visionary companies to a far greater degree than at the comparison companies. Time and again, they have dashed to bits the conventional wisdom that significant change and fresh ideas cannot come from insiders.
Myth 10: The most successful companies focus primarily on beating the competition.
Reality: Visionary companies focus primarily on beating themselves. Beating competitors comes to the visionary companies not so much as the end goal, but as a residual result of relentlessly asking the question "How can we improve ourselves and do better tomorrow than we did today?" In some cases they have asked this question day in and day out for more than 150 years. No matter how much they achieve - no matter how far in front of their competitors they pull - good is not good enough.
Myth 11: You can't have your cake and eat it too.
Reality: Visionary companies do not brutalize themselves with the "tyranny of the or ": the purely rational view that says you can have either A or B, but not both. They reject having to choose stability or progress; cult-like cultures or individual autonomy; homegrown managers or fundamental change; conservative practices or Big Hairy Audacious Goals; making money or living with values and purpose; and so on. Instead, they embrace the genius of the and - the paradoxical view that allows them to pursue both A and B at the same time.
Myth 12: Companies become visionary primarily through vision statements.
Reality: The visionary companies attained their stature not so much because they made visionary pronouncements (although they often did make such pronouncements). Nor did they rise to greatness because they wrote one of the vision, values, purpose, mission, or aspiration statements that have become popular in management today (although they wrote such statements more frequently than the comparison companies and decades before it became fashionable). Creating a statement can be a helpful step in building a visionary company, but it is only one of thousands of steps in a never-ending process of expressing the fundamental characteristics we identified across the visionary companies.
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