Is your company built to last or are you already at the tipping point of decline?
I’m not here to scare you, but I wanted to ask.
Why, you’re wondering?
Well, based on the study by BAI, they found that the average life span of businesses is 10 years. That applies to any business in every known industry, whether you sell bananas or offer HVAC services. JPMorgan Chase also adds that about a third of new companies exit within the initial two years while half exit within five.
BAI argues that this business mortality rate has nothing to do has nothing do with how long it’s been. The probability of dying in the next year is imminent even if you’re doing just well today. In other words, a company could kick off on a high note and still fizzle out. My point is that not all businesses are built to last and stand the test of time.
How about your business? Are you built to last or are you just another statistic?
Jim Collins, author of “Built To Last,” argues that successfully enduring companies have leaders and people that exhibit certain habits. By practicing his 11 ideas, you maintain your business’s integrity as a force to be reckoned with in your category. The unyielding leader in your community refusing to give in to the passing trends.
Is that the business you want to build? Keep reading because I’ll share with you the 11 successful habits of built-to-last entrepreneurs.
11 Key Ideas on the Successful Habits of Visionary Companies
A renowned author and speaker, Jim Collins is known for his best-selling books “Good to Great”, and “Built to Last.” In “Built to Last,” he collaborated with Jerry Porras to study successful companies and their leadership habits.
Like his previous books, Jim’s focal point in his writing has always been business leaders. He emphasizes the importance of having strong and resolute leadership in companies. Moreover, he also argued that core values should be the guiding principles behind decision-making processes.
For any aspiring entrepreneur and existing business owner, “Built to Last” is a must-read and a valuable source of insights. In it, you’ll learn from visionary companies like Hewlett-Packard, Walt Disney, Procter & Gamble, Sony, and General Electric.
Think about it. What’s the common denominator among the said companies?
Simple. They’ve been around far longer than your company has been but are still knocking sales out of the park. For this reason, make their stories an inspiration and their actions a habit you will devotedly practice.
If you dream of a company that’s future-proofed, and not just built to survive, follow these 11 key ideas:
Build the Clock, Don’t Tell the Time
Time telling and clock building are the two descriptions used by Collins to describe the longevity of a company. Similar to telling the time, you are only dependent and limited by what the hands of the clock dictate. On the other hand, when building a clock, you have full control and autonomy in every element surrounding time.
How does this relate to business?
Time telling is likened to coming up with a great idea or having a charismatic and visionary leader. In other words, survival is dependent on external and uncontrollable factors. The problem is, there won’t always be bright ideas or great leaders to keep your ship at bay. In times of famine (in idea or leadership), how will you survive without having full control of your success?
Clock building is like establishing a company that prospers despite the lack of bright ideas of visionary leaders. Collins explains that building your company’s core value systems outweighs having great ideas or leaders. These values, when engraved in everyone within the organization, will be the north star that guides their every action.
Avoid Saying “OR,” Focus On Saying “AND”
To illustrate their idea, Collins and Porras used the Yin-Yang symbol to represent balance. Two seemingly opposite things can co-exist at the same time. This idea has been the focus of this chapter.
We see many companies make the choice between two extremes, for instance:
- Stability or change
- Low cost or high-quality
- Invest for the future or do well in the short term
There is always a choice, but the authors emphasized that leaders should find ways to satisfy both ends. Surviving means not choosing one or the other, but excelling in both. If you are committed to performing spectacularly in the short term, you must never compromise your long-term goals.
“A built-to-last company seeks both longevity and profitability, not one or the other.”
More Than Profits
Establishing a business that is built to last is not measured by profitability. A business can be profitable but still, ultimately fail in the end. That’s why money should only be one component behind your cluster of objectives. Successful companies pursue both profitability and ideology.
Your core ideology is a combination of both:
- Core values — The company culture and guiding principles
- Purpose — The fundamental reasons for your existence beyond profits
When you put people first and fulfill their internal motivations (identity, purpose, and adventure), profitability natuarlly follows. It’s a rule of business that large companies like Hewlett-Packard, Ford and Sony religiously follows.
Progress and Preservation, Always
A visionary company will always look for ways to improve and progress, especially in fast-paced industries. Adapting and changing your strategies and goals over time in response to conventional market conditions is normal. However, what should remain and be preserved is your core ideology.
The core ideology of your company will become the foundation for building and developing your new goals and strategy. With its preservation, every goal and strategy you create will be in service of those core ideologies. In short, you will never lose sight of the reason why you’re doing business in the first place.
Big Hairy Audacious Goals (BHAGs)
What do you think was the most ambitious goal in human history? Personally, I think it’s the Kennedy Moon Mission. The whimsical plan was the manifestation of America’s insecurity when Russia beat them to space exploration. Despite that, the plan conceived during JFK’s speech eight years prior came to fruition in 1969.
That is one example of a Big Hairy Audacious Goal (BHAG).
Having BHAGs is one key characteristic of a company that’s built to last. BHAGs push boundaries and ignite enthusiasm in employees to strive for something greater than themselves.
BHAGs are like a shot to the stars, get to the moon kind of goals. They vary greatly from SMARTER goals which stand for specific, measurable, achievable, realistic, timely, and end results.
SMARTER goals break down your BHAGs into small actionable steps that your team could follow. Think of it this way. BHAGs are your big overarching vision while SMARTER goals are the step-by-step process to make BHAGs a reality.
This is one touchpoint where the principles of Jim Collins go full circle.
In “Good to Great” Jim emphasized the importance of Who then What. This means choosing the right people for the job first before you head on to the tasks. “Built to Last” builds on this idea because visionary companies are composed of zealous people for the company’s core ideology. When employees religiously live by your core ideology, they will remain steadfast amidst troubles and adversity.
The authors refer to this as “cult-like” because of the four familiar characteristics between cults and built-to-last companies:
- Fervently held ideology – all employees religiously follow and believe the core values and purpose
- Indoctrination – the management baptizes the newly onboarded employees into the work culture
- Tightness of fit – people who don’t abide by the same ideology are fired
- Elitism – each employee is called to a greater calling which they must fulfill as a member of a visionary company
Try a Lot of Stuff and Keep What works
In order to be a built-to-last company, you cannot fall behind the times. Remember progress? You must always strive to be ahead of your competition in every way possible. By becoming a game-changer (not just a trendsetter) you’ll maintain a steady momentum of success and progress.
However, innovating is not that simple. Not all ideas become successful, but that’s where visionary companies come in. They are not afraid of taking calculated risks. Built-to-last companies conduct experiments without compromising their entire business.
In your organization, be bold to try new gimmicks and strategies. If something fails, charge it to experience; if something yields positive results, keep it in your armament of ideas.
Staff that is reared and grown from the inside are more dedicated to preserving the ideology than externally grafted employees. If you want to raise an army of devoted soldiers, train them yourself.
Pick candidates from within the company that lives by your core values and take them under your wing. Show them the ropes, trust them, and let them make their own decisions for the growth of the company. When your team feels important, they become more empowered to fulfill the role. That’s how you breed loyalty.
Hiring externally trained staff will have reservations about your core ideology especially if they’ve already built theirs. You can’t trust them for high-ranking roles and they may even compromise your longevity.
Reject the Finish Line
The finish line represents the end, the final stage, and the last stop. But for built-to-last companies, there is no finish line in sight. The idea of constantly evolving and improving never stops. That’s why Collins and Porras suggest reframing your line of thinking from:
“How well is our company performing?” to “how can we do better tomorrow than our performance today?”
When that becomes your train of thought, you eliminate the idea of finish lines. Your company embraces never-ending progress and improvement. That’s the difference between regular companies and built-to-last ones, there’s no other way than up.
The End of the Beginning
Vision statements are never the true measure of visionary companies. The core ideology is the blueprint that guides the mechanism of a company’s strategy and tactics. Your goal is to translate your core ideology into daily habits, practices, and goals that drive your organization. It’s the execution, passion, and consistency that make them built to last.
Look at Hewlett-Packard and their idea of “core ideology into practice.” All they did was clearly define the objectives for each employee. After this, everyone was given creative and management freedom on how to approach the goal. Engraving your core ideology into each employee means nobody loses their way no matter what they’re doing.
Building The Vision
Every individual is a vital component of your company. Always work out the “who” first before dealing with the organization. Build a team with people who believe in the same ideology, and your company’s vision will naturally come to life.
“Built to Last” along with other Jim Collins books like “Good to Great” are valuable sources of entrepreneurial knowledge. The principles you learn from his writings are useful to help you reorganize your team and reinforce your strategy. However, doing so will take some time, especially without expert guidance to walk you through it.
That’s where Wizard of Sales® comes in. We are committed to helping business owners transform their companies from good to great through:
- Establishing a strong company culture
- Training salespeople to become more effective closers
- Instilling values that make businesses built to last
We have helped countless companies before you. The question is, will you be the next one we help? If so, give us a call and let’s future-proof your business.