Thursday, October 10, 2013

Built to Last (4): More Than Profits

Had read "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
Part 2: Clock Building, Not Time Telling
Part 3: No "Tyranny of The OR" (Embrace The "Genius of The AND")
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"We distinguish between core values and practices; the core values don't change, but the practices might." - John Young, Former CEO, Hewlett-Packard, 1992
  • Our research show that a fundamental element in the "ticking clock" of a visionary company is a core ideology - core values and sense of purpose beyond just making money - that guides and inspires people throughout the organization and remains relatively fixed for long periods of time.
  • Profitability is a necessary condition for existence and a means to more important ends, but it is not the end in itself for many of the visionary companies. Profit is like oxygen, food, water, and blood for the body; they are not the point of life, but without them, there is no life.
  • We did not find any specific ideological content essential to being a visionary company. Our research indicates that the authenticity of the ideology and the extent to which a company attains consistent alignment with the ideology counts more than the content of the ideology. 
  •  A key step in building a visionary company is to articulate a core ideology. Drawing upon what we saw in the visionary companies, we've created a practical two-part definition of core ideology. 
Core Ideology = Core Values + Purpose
Core Values = The organization's essential and enduring tenets - a small set of general guiding principals; not to be confused with specific culture or operating practising; not to be compromised for financial gain or short-term expediency.

Purpose = The organization's fundamental reason for existence beyond just making money - a perpetual guiding star on the horizon; not to be confused with specific goals or business strategies. 
  • Not all of the visionary companies began life with a well-articulated core ideology. So, if you haven't yet articulate a core ideology because you've been in the throes of launching a company, that's okay. But the earlier, the better.  

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