What Makes a Company Great?

The book, Built to Last; The Successful Habits of Visionary Companies, attempts to answer this question. Published in 1994, Built to Last has been read by many in our office. If you have not had the chance to read it, I highly recommend it.

Collins summarizes his findings this way: Though the visionary companies are diverse - Merck's in the healthcare business, Philip Morris sells cigarettes - they all have strong, sometimes fanatical, corporate cultures that are jealously preserved, even as the companies adapt to rapidly changing times. The companies heavily promote executives from within, constantly set lofty goals, and surprisingly, are rarely led by charismatic CEOs. Moreover, the visionary companies are driven to make an impact on society, not just to make a profit.

Following are excerpts from an interview with Collins done by Performance Magazine.
Performance: What is a visionary company?
Collins: It's one that has sustained performance over long periods of time, and is a premier institution in its industry. Any industry will have successful companies, but every once in a while, you'll find a company to which everybody will look and say, "That is a very special company." The visionary companies have had a significant impact on the world. For better of worse, they've affected our lives.
Performance: Why do you think that the core culture has to be preserved?
Collins: One of the strongest findings of our research is that visionary companies have these underlying core ideologies, these core values, and they've preserved them over time - almost fanatically - while also stimulating change and progress.
Performance: You observe that the best corporations have cult-like cultures. What do you mean?
Collins: There are certain social characteristics of cults
that appear in visionary companies; heavy indoctrination, fervently held beliefs. What visionary companies are really cult-like about are their basic values. Take Merck.  It has one of the best records of affirmative action of a company of its size and age. Merck has a cult-like belief that it's in the business of preserving and improving human life.
Performance: Are great companies arrogant?
Collins: They can be. Visionary companies have this deep self-confidence that they can do these amazing things. They set what I call big, hairy, audacious goals. It was pretty arrogant for Boeing to bet the company on the 747. But the visionary companies are also humble. They know they can always do better.
Performance: Built to Last is devoted to companies that have already made it. Who's to say what worked in the past will work in the future?
Collins: I honestly believe there are timeless fundamentals we can put our fingers on, like the way enduring companies stimulate progress while preserving strong, well-defined core cultures. Any company can learn from that. If you can't learn from the past, then let's close down all of our universities.
Performance: You talk a lot about other people's visions and purposes. What's your purpose?
Collins: I want to challenge executives, personally and professionally. Why settle for less than trying to create something truly superb? I mean, sure, you can get into business, get rich, and retire. But so what? What are you gonna leave behind? Look at the great companies, and what they've contributed. The world is a much different place because of Boeing's jets, and Motorola's telecommunications products, and H-P's technical contributions. It's certainly a better place because we've got 3M Post-It Notes. I'm asking business people to pursue the highest possible standard. Why should they settle for less than that?