Is Your Organization Built to Last?
Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry Porras is a book that I read in college, and it changed the way I looked at business. In the book Collins and Porras analyze eighteen visionary and long-standing companies (3M, Disney, and Wal-Mart for example) and compare them against their top competitors.
Their goal was to determine what makes these companies different. Why do some companies fail and why do others last for decades after their founders have left?
Built to Last contains all of their research, analysis, and conclusions and I wanted to discuss some of the points that are highly relevant to what we’ve discussed at Working Smarter.
Don’t Tell Time, Build Clocks – Institutionalize Knowledge and Process within Your Organization
One of the major themes throughout Built to Last is the concept of Time-Telling vs. Clock-Making. A time-teller is a key employee – whenever someone in your organization needs to know what time it is they go and ask the one time-teller in your organization that always produces an accurate time.
But what happens when that key employee leaves your organization? Nobody in your organization will be able to tell time, query the customer database, build a new version of the product, or do any of the other million things that are fully known only to a select handful of experienced, key employees. If a business has to spend all of its time reinventing the wheel instead of innovating its products and services, then it probably won’t be very successful in the long run.
So what do truly exceptional companies do? They don’t tell time, they build clocks. They stop reinventing the wheel and institutionalize knowledge. They develop business processes and document them in a central location such that the organization no longer depends on knowledge being passed down from employee to employee orally – instead that specialized knowledge becomes part of the organization’s inner-workings. That institutionalized knowledge forms a clock that enables every person in the organization to tell time on their own.
Ask yourself: are you a time-teller or a clock builder? If you’re not building clocks already, then you should get started by learning how to document your organization’s processes.
Preserve Your Core Values, But Try New Things
Truly exceptional companies have a set of core values that are fundamentally unalterable – everything in the company can change except for their core values. They can make different products, they can enter different markets, they can be run by different people, but they never waiver from their core principles and values.
Built to Last uses IBM as an example here, showing their three core principles (give full consideration to the individual employee, spend a lot of time making customers happy, and go the last mile to do things right), the success IBM had when they followed them (up until the mid-1980s or so), and the failures after they started adhering to secondary principles, like corporate culture and such. (Source: The Simple Dollar)
Companies should always be trying new things, but they should do so within the parameters of their core principles. So what’s an easy way to try new things and preserve the core? As Fred Nickols explained, the best way to do that is to use a goals grid when planning any new initiative.
A goals grid is a simple way that allows you to balance all of your concerns and goals – it allows you to have a complete landscape over what you want to preserve (core values, successful old initiatives), what you want to eliminate from your organization (waste), what you want to steer your organization away from (extraneous values that contradict the core), and things that you want to achieve (growth, profitability.)
How Else Can You Build Your Company to Last?
The first thing you should do is get a copy of Built to Last! The second thing you should do is look to making some improvements within your company’s culture, operations, and philosophy:
- Determine areas where you have “key employee” problems and try to mitigate them by institutionalizing knowledge with processes, information management systems, and training programs;
- Determine your core values and make sure that every person in the company understands what they are;
- Use goal planning tools, such as the goals grid, to help you get a clearer bearing on your company’s direction; and
- Communicate often and clearly to your team regarding the company’s culture, direction, goals, and bearings. Let everyone see the forest from the trees.
We cover a lot of these topics in our Working Smarter Learning Center, so please check that out if you’d like to read more.
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