In the book "Built to Last," James Collins and Jerry Porras offer philosophical insights that could result in corporate success. Collins examines firms that ceased to operate since they could not compete successfully in the market. Essentially, the author focuses on most successful firms in the United States. Collins & Porras (2011) termed such corporations as "Visionary companies." In his research, the author analyses the tenets that make such businesses successful in the market.
In the first chapter of his book, Collins’ twelve shattered myths that could influence the type of leadership a company embraced. The first myth shows that people need great ideas to launch great firms. Such beliefs have led to increased demand for visionary leaders. Taylor, Cornelius and Colvin (2014) stated, “Visionary leadership has been defined as the ability to create and articulate clear visions providing meaning and purpose to the work of an organization.” Visionary leaders create a personal vision and mold it into a shared vision with respective organizations. Clear communication of the vision is what motivates and empowers employees to act.
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Collins’ second myth also justifies why many companies opt for visionary and charismatic leaders. The myth indicates that visionary firm needs charismatic and visionary leaders (Collins & Porras, 2011). Nevertheless, Collins and Porras suggest that some visionary companies started without any specific ideas. Regarding charismatic leadership, the author stated that leaders should work as clock builders, rather than being time tellers. The third myth shows that most successful companies exist primarily to maximize profits. Notably, this belief has made most companies to opt for transactional leadership. According to Taylor, Cornelius, and Colvin (2014), transactional leadership focuses on outcomes, conforms to the traditional structure of the organization, and measures success based on a firm’s system of penalties and rewards. Often, transformational leaders maintain the routine activities by managing employee performance as well as facilitating team performance.
In chapter two of their book, Collins and Porras explain the concept of clock building. In their work, Collins and Porras (2011) came up with a surprising discovery. Notably, they found out that visionary firms are not platforms for charismatic and visionary leaders to make their mark. Additionally, he stated that such leaders could not use such companies as vehicles to develop and introduce new products to the world. According to Collins and Porras (2011), it is not all about a leader or a product. Instead, the products and leaders were on a quest to make their firms great since a company in itself is an ultimate creation. The author referred to that concept as “clock building, not time telling.” Collins & Porras encourage organizations to develop products that could endure over time. In other words, instead of spending too much time on specific products and marketing strategies, clock-building leader spend a significant amount of time thinking about organizational design. Thus, instead of being over occupied with day-to-day routine activities of a business, they concentrate on aligning their firms with the core goals and core values. They also focus on building great leaders around them instead of only being a renowned leader. By focusing on corporate design instead of a unique market opportunity or idea, firms build institutions that can exist beyond specific product lines.
In chapter three, Collins & Porras use the yin/yang symbol to explain how visionary companies operate. The yin/yang symbol shows the existence of balance. In the research, the author states that visionary leaders are not oppressed by the traditional "tyranny of the OR." Instead, such companies embrace a concept he terms as "Genius of the AND." Under this philosophy, a company can opt for both extremes rather than sticking to traditional norms. According to Collins & Porras (2011), inferior firms tend to hold the idea that leaders can be born or made. Such views imply that a company can opt to go for only one idea. In so doing, its ability to achieve sustainability is limited. In their work, Collins & Porras encourage companies to embrace both ends and to establish a way to have both choices executed. On matters leadership, companies should understand that leaders could both be born as well as be made. A report by Gentry, Deal, Stawiski, & Ruderman (2012) indicated that 28.5% of its respondents believed that leaders are born while 52.4% perceived that leaders could be made. Traditional firms could opt for the later. Visionary companies, on the contrary, often figure out ways to ensure that it has people with both innate and acquired leadership traits instead of sacrificing one for the other. Gentry, Deal, Stawiski, & Ruderman (2012) indicated that born and made leaders have their strengths and weaknesses. Thus, having them both in an organization helps in addressing the deficiencies associated with such leaders while capitalizing on their strengths.
Collins and Porras (2011) also indicated how companies should do business. In particular, the author demonstrates that companies should regularly adapt and change their strategies based on the emerging market conditions. Essentially, companies should ensure that their core ideologies remain intact while doing this (Pant, 2012) . Typically, the market environment is prone to numerous changes. Such changes may force companies to change their competencies and goals among others. The author, however, instructs businesses to maintain their core ideologies regardless of the challenges and changes they have to take from the market. A company that has managed to do this is Southwest Airlines. On September 11, 2001, when terrorists bombed the World Trade Centers, the U.S. government responded by developing strict policies that required airlines to embrace strict security measures (Harumi & Darin, 2005). This forced airlines to purchase and install sophisticated machines to screen travelers for possession of explosives. Many airline industries in the U.S., both domestic and international, suffered financially because of this move by the government. Some responded by raising the price of air tickets while others opted to retrench some of their employees. Southwest Airline, on the contrary, retained its core value of offering affordable air transport to passengers. Besides, the company did not retrench its staff since it values employee welfare. This explains why the company has never experienced strikes since its introduction to the market.
Finally, in the fifth chapter, Collins and Porras explain the concept of risk-taking and how developing big hairy audacious goals (BHAG) is the key to success. BHAGs are potent means of stimulating progress. According to Mulder (2018), ambitious super goals can separate visionary firms fundamentally from inferior companies. The author explained his argument by indicating that the pursuit of bold ideas makes businesses very successful. Excellent BHAGs must be precise and compelling. It should also be aligned with an organization's core ideology. In the 1950s, for instance, Boeing ventured into a new market and opted to divert from building military aircraft to developing commercial airlines. Other players in the market such as Douglas Aircraft hesitated to invest in the commercial market. The risk Boeing took enabled it to make a prototype that is used in the commercial airline market today. The above example shows that BHAGs are long-term goals and focus on daring goals. Mulder (2018) stated that all firms have goals, but BHAG goes ahead to cover goals that are achievable in the future. The major demerit of BHAGs is that it is hard for a company to realize success is there is no high level of commitment. It requires a company to have belief in the developed goals as well as a move outside the comfort zone to pursue them.
References
Collins, C. J. & Porras I. J (2011). Built to last: Successful habits of visionary companies (3 rd Edition). Harper Collins Publishers. ISBN-13: 978-0060516406
Gentry, W., Deal, J. J., Stawiski, S., & Ruderman, M. (2012). Are leaders born or made? Center for Creative Leadership , 1(2), 1-13
Harumi I. & Darin L. (2005) Comparing the impact of the September 11 th Terrorist attacks on international airline demand. International Journal of the Economics of Business , 12 (2), 225-249. doi: 10.1080/13571510500127931
Mulder, P. (2018). Big hairy audacious goal (BHAG) . ToolsHero. Retrieved on 15 September 2018 from https://www.toolshero.com/strategy/big-hairy-audacious-goal-bhag/
Pant, P (2012). Book review: Built to last by Jim Collins. BusinessInsider. Retrieved on 15 September 2018, from https://www.businessinsider.com/book-review-built-to-last-by-jim-collins-2012-5?IR=T
Taylor, C., J. Cornelius, C., & Colvin, K. (2014). Visionary leadership and its relationship to organizational effectiveness. Leadership & Organization Development Journal , 35 (6), 566-583.
