Monday, May 6, 2013

Built to Last (2): Clock Building, Not Time Telling

Had started reading "Built to Last" since a while; and realized that it's not just about building a company that would last for couple decades, but also it's about building a "Personality" & a "Nation" that could last for decades as well.

So, I thought I should keep some notes/excerpts

Part 1: The Best of The Best

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Imagine you met a remarkable person who could look at the sun or stars at any time of day or night and state the exact time and date: "it's April 23, 1401, 2:36 AM, and 12 seconds." This person would be an amazing time teller, and we'd probably revere that person for the ability to tell time. But wouldn't that person be even more amazing if, instead of telling time, he or she built a clock that could tell the time forever, even after he or she was dead and gone?

Having a great idea or being a charismatic visionary leader is "time telling"; building a company that can prosper for beyond the presence of any single leader and through multiple product life cycles is "clock building".

The primary output of visionary companies builders efforts is not the tangible implementation of great idea, the expression of a charismatic personality, the gratification of their ego, or the accumulation of personal wealth. Their greatest creation is the company itself and what it stands for.

Waiting for "The Great Idea" Might Be a Bad Idea:
If you are a prospective entrepreneur with the desire to start and build a visionary company but have not yet taken the plunge because you don't have a "great idea," we encourage you to lift from your shoulders the burden of the great-idea myth. Indeed, the evidence suggests that it might be better to not obsess on finding a great idea before launching a company. Why? Because the great-idea approach shifts your attention away from seeing the company as your ultimate creation.

The Company Itself is The Ultimate Creation:
 We had to shift from seeing the company as a vehicle for the product to seeing the products as a vehicle to the company. We had to embrace the crucial difference between time and telling and clock building.

The builders of visionary companies were highly persistent, living to the motto: Never, never, never give up.But what to persist with? Their answer: The company. Be prepared to kill, revise, or evolve an idea, but never give up on the company.

If you're involved in building and managing a company, the shift to seeing the company as the ultimate creation, has significant implications for how you spend your time. It means spending less time thinking about a specific product lines and market strategies, and spending more of your time thinking about organization design. It means spending less of your time being time teller, and spending more of your time being a clock builder.

The continual stream of great products and services from highly visionary companies stems from them being outstanding organizations, not the other way around

The Message For CEOs, Managers, and Entrepreneurs:
 One of the most important steps you can take in building a visionary company is not an action, but a shift in prospective. We're asking you to think less in terms of being a brilliant product visionary or seeking the personality characteristics of charismatic leadership, and to think more in terms of being an organizational visionary and building the characteristics of visionary company.

You don't have to sit around waiting until you're lucky enough to have a great idea. You don't have to accept the false view that until your company has a charismatic visionary leader, it cannot be a visionary company. There is no mysterious quality or elusive magic. Indeed, once you learn the essentials, you -and all those around you- can just get down to the hard work of making your company a visionary company.

No "Tyranny Of The OR" (Embrace The "Genius of The "AND"):
Visionary companies do not oppress themselves with what we call the "Tyranny of the OR" - the rational view that cannot easily accept paradox, that cannot live with two seemingly contradictory forces or ideas at the same time. The "Tyranny of the OR" pushes people to believe that things must be either A OR B, but not both. It makes such proclamations as:
  • "You can have change OR stability."
  • " You can be conservative OR Bold."
  • "You can have low cost OR high quality."
A visionary company doesn't seek balance between short-term and long-term. It seeks to do very well in the short-term and very well in the long-term. 



Sunday, May 5, 2013

Build to Last: The Best of The Best

Had started reading "Built to Last" since a while; and realized that it's not just about building a company that would last for couple decades, but also it's about building a "Personality" & a "Nation" that could last for decades as well.

So, I thought I should keep some notes/excerpts
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What is a visionary company? Visionary companies are premier institutions - the crown jewels - in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around us. The key point is that a visionary company is an organization -an institution. All individual leaders, no matter how charismatic or visionary, eventually die; and all visionary products and services - all "great ideas"- eventually become obsolete.

12 Shattered Myths:
  • Myth 1: It takes a great idea to start a great company.
    Reality: Visionary companies often get off to a slow start, but with the long race.
  • Myth 2: Visionary companies require great and charismatic visionary leaders.
    Reality: They sought to be clock builders, not time tellers.
  • Myth 3: The most successful companies exist first and foremost to maximize profits.
    Reality: Visionary companies pursue a cluster of objectives, of which making money is only one -and not necessarily the primary one. Yes, they seek profits, but they're equally guided by a core ideology -core values and sense of purpose beyond just making money.
  • Myth 4: Visionary companies share a common subset of "correct" core values.
    Reality: The crucial variable is not the content of a company's ideology, but how deeply it believes 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. Yet, while keeping their core ideologues tightly fixed, visionary companies display a powerful drive for progress that enables them to change and adopt without compromising their cherished core ideals.
  • Myth 6: Blue-chip companies play it safe.
    Reality: Visionary companies have judiciously used BHAGs (Big Hairy Audacious Goals) to stimulate progress and blast 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.
  • 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.
  • Myth 9: Companies should hire outside CEOs to stimulate fundamental change.
    Reality: Home-grown management rules at the visionary companies to a far greater degree than at the comparison companies (by a factor of six). Time and again, they have dashed to bits the conventional wisdom that significant change and fresh ideas cannot come from inside.
  • Myth 10: The most successful companies focus primarily on beating the competition.
    Reality: Visionary companies focus primary on beating themselves. Success and 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 to do better tomorrow than we did today?". They never think they've done "good enough".
  • Myth 11: You can't have your cake and eat it too.
    Reality: Visionary companies embrace the "Genius of AND" - the paradoxical view that allows them to pursue both A AND B at the same time.
  • Myth 12: Companies become visionary primary through "vision statement".
    Reality: 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 characteristic we identified across the visionary companies.