This is a study on how to build a company that is resilient and exceptional. It’s one of my favorite books.
The Big Idea: visionary companies have a strong inner core (core purpose, core values) and a willingness to change and adapt everything except that core.
KEY TAKEAWAYS FROM BUILT TO LAST
- 1. Build clocks instead of relying on time tellers.
- Focus on building organizational intelligence and capabilities rather than relying on a charismatic leader coming up with a great strategy or a great idea.
- Founders of these visionary companies are builders and architects, not artists or inventors.
- The company is the creation.
- 2. People, products, and purpose come before profits.
- Built-to-last companies are willing to lose some profit margin to fulfill a purpose, not because it will increase long-term shareholder value more (which it might) but because it’s the right thing to do.
- Profit for the company is like oxygen for the body. The body needs oxygen to survive but consuming oxygen is not the point of life.
- Built-to-last companies have very different purposes, but they all had one.
- These companies indoctrinate new employees into the core ideology and promoted/rewarded based based on employee alignment with the core ideology.
- Sometimes, these companies were founded with a core ideology. Sometimes, the core ideology evolved only after the startup phase.
- 3. Keep the core but be ready to change everything else.
- Core ideology never changes. Culture can change. Strategies usually change. Tactics definitely change.
- Built-to-last companies are constantly improving and are never satisfied with the status quo.
- 4. Make sure everything is aligned.
- Even small processes, decisions, and systems should align with the core.
- People do notice the little things, so definitely sweat the small stuff.
- Everything should reinforce everything else to support the core.
- Decisions that fit the core ideology might often seems crazy from the outside.
HOW TO BECOME A BUILT-TO-LAST COMPANY
- 1. Set Big, Hairy, Audacious Goals (BHAG). Get everyone in the company to buy-in.
- 2. Develop a cult-like culture that some people love and some people dislike. Those that love it stick around for a long-time.
- 3. Try lots of stuff and keep what works. Evolution beats intelligent design. Failure is okay. Detailed plans usually fail because circumstances always change.
- 4. Promote from within. Recruit and develop the next generation of leaders.
- 5. Always be improving. Develop mechanisms to prevent complacency and status quo. Become a self-improvement machine.