Yoon Jung Barbé

1. Introduction

This essay will consist of an analysis of the first five chapters of Jim Collins and Jerry I.

Porras' best seller book Built to Last: Successful Habits of Visionary Companies. I will begin

with a brief summary and then continue with a critique, which will include debatable questions

and personal comments.

2. Summary

In their book Built to Last, Jim Collins and Jerry Porras identified eighteen companies

as 'visionary', which are best in their industry, widely admired by their peers, made an imprint

on the world, had several CEOs and product life cycles and were founded before 1950. These

visionary companies were described and compared to others that don't match visionary

status.

The main ideas in the five first chapters of the book are an emphasis on clock building instead

of time telling, how the core ideology alone does not make a visionary company, forgetting

about the tyranny of the 'or' and embracing the genius of the 'and', preventing the core while

stimulating progress, and Big Hairy Audacious Goals (BHAG).

Time telling is “having a great idea or being a charismatic visionary leader” and clock building

is “building a company that can prosper far beyond the presence of any singer leader and

through multiple product life cycles”. They denounce the myths of the great idea and the

charismatic leader and emphasize he importance of building an organization’s “core value

system”.

According to Porras and Collins, visionary companies do not make a choice between

contradictory ideas but embrace them and try to find a way to acquire both to the maximum.

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Moreover, over time, competencies, strategies, and goals change but the core ideology must

remain intact.

Finally, the authors affirm that visionary companies take risk and set super goals. They

introduce the “BHAG” concept as a way for companies to enhance team spirit and shooting

for goals to become visionary as it stresses high commitment and working outside of a

comfort zone. BHAGs are nearly impossible, but possible with confidence and a bit of

arrogance on behalf of the company.

3. Critique

3.1. The myth of the great idea: Is it really a myth?

The authors argue that fifteen out of the eighteen visionary companies did not have a

great idea when they began their business and figure out and decide what to make after the

business was established. As an example, after he started Sony, Masaru Ibuka joined in a

meeting with his seven first employees to decide what to make. The first products they came

with was a rice cooker that didn’t work and a tape recorder that completely failed on the

market. They mention that starting with a great idea might actually be a bad idea and that the

company itself is the ultimate creation.

However, taking a look at courses on strategic management and entrepreneurship teaches us

that business schools teach the importance of starting first and foremost with a good idea and

well-developed product and market strategies before jumping through the window of

opportunity.

Does it mean that the myth of the great idea is not always a myth and that beginning a

business with a great idea can also lead some companies to become visionary?

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3.1.1. The myth of the great idea: pros

Some argue that the myth of the great idea leads to the phenomenon of paralysis, meaning

that many potential entrepreneurs would love to have their own business but cannot seem to

think of any good ideas, as they are waiting for the 'light' that would launch a great business

(Navarro, 2011).

Others add that an idea is a great core-essence of passion, but the real simple truth is how it

is being mold over time that really matters. Success never comes from a miraculous idea as

great success simply comes from a basic idea that is executed incredibly well. Lastly, great

ideas just come while trying to develop other simple ideas, which as a result, produce the

ingenious and later successful product or service of the company.(Altman, 2011).

3.1.2. The myth of the great idea: cons

In objection to the myth of the great idea, it is also believed that a great idea is the starting

point for everything and certainly essential to begin a business. A strong idea is needed for

every business venture and a flawed one will doom all further business development to

failure.

Good ideas launch world-class companies and it is just important to capture the great one at

the right moment. A great idea needs to satisfy a need, propose a solution to a problem or

meet a challenge. The key is to make that idea work by bringing it to market at the right time

and with the most appropriate method. “Does my idea fulfill an otherwise unmet customer

need in the marketplace or significantly improve upon an existing business model? The

founders of Pinterest, E-Bay and Amazon are all great examples of forward thinkers who

validate this model.” (www.russgottesman.com)

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3.1.3. My opinion

I am split between both points of view as nowadays opening a startup does not require as

much capital as in the past due to the considerable evolution of information technology and

the digital era we are living in, which as a direct consequence, allows wannabe entrepreneurs

to just give it a try without being too concerned about direct costs as the only real costs they

might bump into are their opportunity costs.

However, I tend to agree more with the statement that a great idea is essential to success and

that the problem lies in how that idea is being put into practice and being introduced into the

market. The authors argue that almost all their visionary companies were not founded based

on a great idea, however, I also believe that the leaders of these companies were also very

wise people as well as excellent leaders with a great understanding of the market and the

environment. These qualities allowed them to anticipate the needs and the wants of their

future customers.

Moreover, I also believe that luck must also be taken into account. I am not saying that these

companies' successes are due to the catch of lucky breaks, but I think chance and luck have

also played a small contribution to their achievements.

3.2. The genius of the and: trying embracing contradictory ideas and trying to acquire

both to the maximum instead of finding a balance? Sometimes incoherent?

As mentioned in the book, the tyranny of the “or”, finding its roots in the Chinese

dualistic philosophy, pushes people to believe that things must be either A or B but not both.

However, visionary companies liberate themselves with the genius of the “and” , which

consists of embracing both extremes of a number of dimensions at the same time. As a result,

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they figure out how to have both A and B at the same time while retaining the ability to

function.

However, are there any drawbacks of seeking two contradictory ideas at the same time? Is it

always the best alternative?

3.2.1. Advantages of embracing contradictory ideas

As the authors mentioned, visionary companies do not oppress themselves with the rational

view that cannot easily accept paradox, which cannot live with two seemingly contradictory

forces or ideas at the same time. They do not seek a balance between short-term and long-

term, they seek to do very well in both short and long-terms. They preserve their core

ideology and stimulate vigorous change and they seek to be highly-idealistic and highly

profitable.

As a result, embracing the contradiction unleashes the power of possibility, vision, creativity,

yet is grounded in practical business principles that can help any leader and organization, in

any situation improve its performance (Balinski, 2004).

3.2.2. Incoherence found in embracing contradictory ideas

Some argue that embracing contradictory ideas sometimes lead to incoherence as

companies are confronted to trade-offs such as 'quality vs cost' and 'risk vs return'. 'Risk vs

return' for example implies that the tendency for potential risk to vary directly with potential

return, so that the more risk involved, the greater the potential return. Trying to obtain the

maximum return with the lowest risk possible is nearly impossible and the most coherent

decision would be to try to find a balance between those two.

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3.2.3. My opinion

I don't disagree with the idea of seeking to embrace two contradictory ideas in business,

which obviously leads to a better performance. However, I am not totally convinced with the

idea of acquiring two extreme at the same time to a maximum. Breaking trade-offs is not self-

evident and very challenging, and I tend to believe that it might be better to find a balance

while embracing contradictions, rather than seeking to gain them to the maximum.

3.3. Persistence in business: pros and cons?

The authors affirm that a company should never be given up on, but is it worth

attempting desperately to grow a company?

3.3.1. Pros of persistence

Successful entrepreneurs possess that vital characteristic which is called persistence. They

never give up on their dream of building a viable business. Persistence is the key attribute

that allows them to face frustration and catastrophic situations. They are driven by the belief

that they have the ability to overcome and that they can survive the rude moments and

continue to prosper (Hall, 2012)

3.3.2. Cons of persistence

However, in many cases, the best decision is to turn out the lights and close the doors. Not

being able to make payroll, pain after betrayal, failure of a product and loss after fire are

common examples in business that imply severe shocks that require a powerful mental state

of mind and a sense of persistence that everybody does not possess.

Moreover, “given the wrong circumstances, running into a brick wall, over and over, is simply

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not useful. Many owners reach a point in the life of their businesses where they hit a wall, a

point beyond which they are either unable or unwilling to go.” (T. Berry, 2012)

Dealing with failure or difficulties must also inquire questions about the real value that the

company has to offer and if it is really worth persisting in establishing or growing the business.

Otherwise, the attribute of persistence rapidly turns into desperation.

3.3.3. My opinion

I believe that persistence is a key characteristic that is essential for entrepreneurs in order to

overcome difficulties and failures that they might face while managing their organizations.

However, I also believe that persistence is also a myth, as it is not always the best alternative

and that entrepreneurs must also consider the alternative of giving up, rather than trying the

impossible.

4. Conclusion

Jim Collins and Jerry I. Porras offer us an interesting analysis of attributes that have

allowed companies to be identified as visionary. Some of their main ideas: the myth of the

great idea, the genius of the and, and persistence, even though intensively brought up in

debates, still represent essential characteristics that give us a critical overview

5. References

J. Collins and J. Porras

1994, “Built to Last: Successful Habits of Visionary Companies” Harper Collins
Publishers, pp 1-113.
A. Wooldridge
2011, “Built to Last - Jim Collins has stayed at the top by practising what he preaches.”
Electronic document. http://www.economist.com. Accessed on April 3, 2013.
J. Reingold
2004, “Was "Built To Last" Built To Last?” Electronic document.
http://www.fastcompany.com. Accessed on April 3, 2013.

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E. Navarro
2011, “Entrepreneurship: The Myth of the Great Idea” Electronic document.
http://www.bmasi.net. Accessed on April 3, 2013.
R. Altman
2011, “Brilliant Business Ideas – The Myth of the Great Idea.” Electronic document.
http://www.teamaltman.com. Accessed on April 3, 2013.
R. Gottesman
2013, “Entrepreneurship”. Website. http://www.russgottesman.com. Accessed on April
3, 2013.
E. Balinski
2004, “The Power of And”. Electronic Document. http://www.leadershiponthefly.com.
Accessed on April 3, 2013.
T. Gonser
2013, “Persistence is the key to success.” Electronic Document.
http://business.financialpost.com. Accessed on April 3, 2013.
A. Hall
2012, “From Idea to Business: Persistence is Critical.” Electronic Document.
http://business.financialpost.com. Accessed on April 3, 2013.
T. Berry
2012, “The Problem With the Myth of Persistence.” Electronic Document.
http://timberry.bplans.com. Accessed on April 3, 2013.
B. Taylor
2012, “Business Stories.” Electronic Document. http://www.nytimes.com. Accessed on
April 3, 2013.