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What if there is something visionary companies that are built to last are doing differently? Is there a set of characteristics you can use to create visionary company? This is the subject of this mini series. In this second part, we will discuss the last three characteristics that separate visionary companies from the rest. This is the blueprint you have been looking for. Let’s build a company that will make an impact and change the world.
The first three habits of companies built to last are in part 1.
In the first part of this mini series, we discussed the first three lessons I learned from Built to Last book. These three lessons were following. First, we should focus on building a clock. In other words, building a company that is innovative in its core and that will survive its founder. Founder should never be the most important wheel in the machine. Otherwise, it is very likely that company will not survive when its founder is gone. Read the first part to find out how to avoid this.
The second lesson, I got from Built to Last book, was about establishing core values and ideology and building the company on top of it. Here, we also discussed the difference between core values, ideology, strategy and tactics. Build to last part one will give you all the information you need to build a company on values and ideology that matters to you. The third lesson we discussed was about building a cult-like culture and how to do it.
Today, we will take a look at the last three lessons that will help you create a company built to last. These lessons will be about focusing on your people instead of looking elsewhere, not settling for compromise and seeking continuous improvement. So, let’s explore the last three building block for creating companies built to last.
Promote from the inside
Imagine that you want to find a new manager, or any other executive. Who knows, maybe you are looking for someone who will replace you as a CEO. Whatever the case is, you should first try to find the right person among people already working for you, your employees. And, there is a very good reason for promoting people from the inside, instead of the outside. Your employees know the core values and ideology of your company. And, not only that. They live and breath them.
Think about this. You’ve already invested a lot of time, energy and other resources in their education and training. Why should you know throw all this out the window and hire someone from the outside of your company? Also, why should you then invest all the resources I mentioned in educating and training this person? I think that you will agree that this is not the most effective way of doing things. Then, there is another thing we should keep in mind.
Hiring is just the beginning
When you hire someone for a certain management or executive position, it is not the end of the process. In a fact, this is just the beginning. Then, when you find the right person for the job, you have to invest your resources to train this person. You have to teach her about core values, ideology and culture of your company. And, you have to make sure she understands and embrace these values, ideology and culture. Otherwise, it will never work and your company will suffer.
Think about how long it can take to train a person for some job in your company. Even in the least complicated cases, this training can take a month or even more. And, this may not include full adaptation to the specific culture of your company. Learning a specific procedure or set of steps to get certain job done is one thing. Understanding the core of values and ideology and embracing them is something different. This can require much more time. Or, it may never work.
As you can see, there is always this problem with time. Simply said, people need some time to come to taste of your company. From this point of view, hiring someone is always just the beginning, the first step of the process. It is never the end, or the middle. Fortunately, you can save this time by promoting your employees.
Use promoting from the inside as motivation
Another benefit of promoting from the inside is that it will motivate your employees. It is one thing to repeatedly tell your employees how far they can get if they work hard. However, it is something completely different when you make promoting from the inside your primary strategy for finding the right people for higher positions. Actions speak louder than words. So, show your employees that you really focus on promoting rather than hiring.
Seek continuous improvement
This will probably sound like a no-brainer. The majority of companies studied in Built to Last always seeks continuous improvement. All these visionary companies, listed in the Built to Last book, are constantly asking one specific question: “How can we do better tomorrow than we did today?” On the other hand, companies that were not as successful ask a different question. It is usually something like: “How well are we doing?”.
Another question these less successful companies are asking is: “How well do we have to perform to be better than our competition?” The less successful companies often focus on present moment and on beating the competition. On the other hand, visionary companies built to last focus on the future and beating themselves. Don’t get me wrong. Visionary companies do not ignore their competition. It is just not their main focus.
Companies built to last are not focused on beating everyone else in the industry. Their main focus is to be better than they were yesterday. Visionary companies want to push themselves beyond their limits. And, they want to do the same with the whole industry. It is safe to say that these companies reject the idea of a “finish line”. When you are building this kind of company, there is nothing like a “finish line”. Also, you are never satisfied with results. You can always do better.
Set high standards and pursue excellence
Part of this mindset is also holding to high standards. Visionary companies want to be the best. These companies want to create the best products and services. Companies built to last want to make serious impact not only on their customer, but on the world. In the first part, we talked about the goal of leaving a legacy. If you want to impact the lives of your customers, and the world, you can’t create settle for anything less than excellence. And, having high standards is necessary.
One company that is great example of this is Apple. Unfortunately, Apple was not among the visionary companies listed in the book. The reason for that is that it didn’t meet the criteria of being built before the year 1950. Otherwise, I pretty sure that Apple would not only make the list, it would be on one of the top positions. If you would ask someone what company is pursuing excellence and having high standards today, Apple would be a frequent answer.
Steve Jobs was known for his obsessive focus on making every part of the product perfect. No detail was not too small. He went so far, that he made even those parts, customers were not able to see, perfect. Whether it was design of hardware or materials used inside Apple’s products, it has to meet his high standards. All visionary companies in Built to Last shared this mindset. However, one company I would like to mention specifically was Disney.
The founder of Disney, Walt Disney, was obsessed with creating the best products, just like was Steve Jobs who came after him. Walt Disney was willing to go through many iterations to perfect animations in his movies. People who worked with Walt confirmed how strong work ethic he had. He was always working for long hours until the result was perfect. Otherwise, he would try again and again and again. This relentless pursuit of excellence is necessary if you want to create something that will have an impact on people and the world.
Dare to innovate
Having high standards and pursuing excellence is not everything. There is another difference between companies built to last and the rest. Companies built to last have the courage to innovate, to explore the unknown. These companies know that this is the only way you can survive and thrive. Having just one or two groundbreaking products is not enough. Sooner or later, these products will become obsolete. There is also always a chance someone will make something better.
For anyone wanting to create visionary company, this means one thing. You have to be willing to sacrifice your current products in favor of the new. Innovation is a continuous process. It doesn’t have any finish line. When you release new product, you have to immediately start looking for a way to make it better. Or, you have to start looking for a way to replace it with a better product. In other words, be willing to cannibalize your own products.
A lot of companies are talking about the willingness to pursue innovative ideas. Unfortunately, only few of them really dare to go all-in. If you want to build a visionary company, you can’t do it only partially. The only and proper way to do this is by trying and adapt to newer ideas and technology earlier than others. Be faster than others and do more experiments than others. Don’t wait until some new technology will expose your product or company to danger. Do it by yourself.
Set Big Hairy Audacious Goals
One way to keep this drive for progress alive is by using something authors of Built to Last call BHAGs, or Big Hairy Audacious Goals. It is a common practice that companies set high goals to reach in the future. However, visionary companies go farther. These companies not only set high goals, these companies set big and audacious goals. You can think about these Big Hairy Audacious Goals as super goals. These goals are incredibly challenging to reach, even scary.
However, there is one thing we need to keep in mind. These super goals are not completely out of reach. Yes they are very hard, sometimes close to impossible, to achieve. Still, there is always at least some tiny possibility. A good example of such a goal was John F. Kennedy’s decision to go to the moon. When he announced this goal, many people though it was insane. Back then, only a few believed that something like that is possible. Today, we know it is possible to get man on the moon.
Use this as an example when you decide to use Big Hairy Audacious Goals to stimulate progress in your company. Find something that is incredibly hard, but doable. Make sure your employees believe that the super goal you announced is achievable. It will enhance the team spirit, create strong commitment and push them work hard. This is something you should mention explicitly.
When some people set these super goals, they often try to make it look easier than it is. The problem is that it doesn’t work. People either don’t believe it or lose motivation after running into first bigger obstacle. Instead of trying to make the goal easier, tell the truth. Make it clear that it will be a challenge and that it will require a lot of time and hard work. Instead of making the goal look easier, prepare your team for the worst and make them stronger and tougher.
Don’t settle for compromise
This is the last lesson I learned from Built to Last. Never ever settle for compromise. And, never settle for anything that is below your standards. It is just like with core values and ideology of your company. Your standards and pursuit of excellence is something you never debate about. When you start to make compromise instead of holding to your standards, it is like ignoring some of your values or ideology. It is better to never start with it.
In Built to Last, there is something called “Genuis of the And”. Instead of choosing between two options, this “Or” that, visionary companies are always looking for ways to choose both options. In other words, how can we choose option A “And” option B? These companies are willing to sacrifice one option for the other. And, they are not looking for balance. They believe that you can choose both options, no matter how opposite these options are, even if both choices are on the extremes.
Visionary companies, and companies built to last, embrace both extremes: predictability and chaos, conservatism and progressiveness, stability and revolution, moderation and craziness. It is all just about finding some way to connect these extremes. Visionary companies believe that doing so is possible. And, you have to believe that too. When you have two options to choose from, don’t settle for compromise. Find a way to have both.
You don’t have to choose between creating high quality products and products that are affordable. You don’t have to choose between building profitable business and doing good. And, you don’t have to choose between long-term and short-term thinking. Remember that you can have both if you embrace the genius of the “And” and find some way to make it work.
Closing thoughts on companies built to last
This is it. These are the last three lessons I learned from Built to Last. Well, there was much more I learned, but these were the most striking lessons. I hope that these lessons we discussed in this and previous part will help you build the company you dream about. If I could give you one more tip, it would be that it is possible, that you can do that. Remember that all those companies we admire today started as an idea in someone’s mind. You just have to be willing to put in the effort.
Thank you very much for your time. And, until next time, have a great day!
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