Published in 1994, Built to Last, is billed as one of the most influential books in our era. It is the outline and explanation of a 6 year research project by Jim Collins and Jerry Porras, both professors of Stanford University’s Graduate School of Business. Their research had two primary objects. The first was to identify which characteristics were common to highly visionary companies and the second was to communicate their findings in such a way that it would be useful and influential to management across the business world.
In order to figure out what companies are identified as “visionary,” 1,000 CEOs across the country were surveyed. Also, along with the survey, there were criteria set out for what could be considered a visionary company. It defined a visionary company as one that is a distinguished institution within the industry it is in, admired by a wide range of credible businesspeople, has had multiple generations of CEOs, founded prior to 1950, and has had an impact in the world along with multiple life cycles of products or services.
From this, Collins and Porras extracted a list of 18 visionary companies. Some examples include, 3M, American Express, Boeing, Citicorp/Citigroup, Disney, Ford, HP, Johnson & Johnson, Merck, and General Electric. These companies and the others listed, were considered leaders in their industries, and to show how and what these companies did differently to help establish themselves as visionary, Collins and Porras compared and contrasted them to equally established competitors in their respective industries. Some of the factors that were used to compare the visionary companies to their successful competitors included how they performed in the stock market between the 1920s and 1990s. While the competitors did well, outperforming the general market by 2 times, the visionary companies listed outperformed the rest of the market by as much as 15 times. Impressive indeed.
The brilliance of Built to Last is that it brought together qualitative data from companies and how they were run to be successful with clear and understandable quantitative data.