What is a visionary company?
Built to Last by Jim Collins seeks to answer that question. The authors conducted a six-year research project that identified 18 visionary companies and compared them against similar companies in the same industries. They discovered several key differences. These principles can be used to help any company become more visionary.
A visionary company is not only an industry leader, but has stood the test of time and impacted the world around it. Most importantly, it is an organization, not a single charismatic leader. It endures through generations of leaders and many product life cycles. It has timeless core values and an enduring purpose that exist separate from constantly changing business strategies and operating practices.
Many companies have had a strong, charismatic leader who had an answer for everything and led the company to great success. As soon as that leader was gone, the company floundered. Visionary leaders build a corporate environment which allows the company to succeed long after they are gone. Likewise, a single “great idea” may launch a company, but it cannot sustain it. It is great ideals, not ideas, which make a company succeed.
Visionary companies tend to be profitable, leading many to believe that a focus on profits is what makes a company successful. But they have their ups and downs. It is only in the long run that they are consistently strong performers. More importantly, they are willing to engage in activities such as developing products that will never be profitable, or even giving away their products for free, if doing so is in line with their core vision and values. Steadfastly adhering to the core vision and values of the company, even when it makes little financial sense to do so, is a key characteristic of visionary companies.
Visionary companies must be willing to change their operations and procedures to meet with the needs of a constantly changing world. A company that refuses to change with the times is doomed to failure, but it must change only how it operates, not why. Structure, policies, and strategy may all change, but the core vision remains the same.
Big Hairy Audacious Goals, or BHAGs, are one way visionary companies distinguish themselves. These goals are often so large the future of the company rests on their success. Many companies avoid them as being too risky, but most visionary companies embrace them. They have sufficient confidence to say, “We will succeed, no matter the odds.” A clear, compelling goal can foster team spirit and commitment. A BHAG must be ambitious but attainable. Once achieved, it must be replaced with another before complacency sets in.
Visionary companies are not for everyone. They have little room for those who are not suited or willing to adopt their core values. This can even lead to a cult-like environment within the company. While this may sound negative, it can actually benefit the company:those employees who adhere to the core vision stay, those who don’t, leave. This reinforces the vision and maintains it across time.
All companies work through trial and error, introducing products and gauging reaction. However, visionary companies embrace this process. They encourage experimentation and new ideas, and are quick to adapt to unexpected successes. They also realize punishing failure leads to stagnation. They are more willing to dispose of old methods and processes in order to keep up with a changing world.
Visionary companies rarely hire outside CEOs. They rely on managers who have “grown up” within the company. These are leaders who have spent their entire careers with the company, who understand and embrace its core vision and values, and who can instill them in others.
Visionary companies do not ask, “How well are we doing?” They ask, “How can we be better?” Every goal achieved is just one more step towards a better future for the company. At visionary companies, “continuous improvement” is not an empty phrase, it is an essential part of their core values.
A company cannot become visionary merely by writing a vision statement, nor even by identifying and sharing its core values and ideals. It must incorporate that vision into everything it does, even when that means going against conventional wisdom, and remove any misalignment within its structure and people. Only by adopting its core vision into every facet of the company can it become truly visionary.
The book concludes by examining how a company can identify and lay out an effective vision that goes beyond the mission statement to a true set of core values and ideals.