Great Companies Know Bad Times Lead To Opportunities

IN an earthquake, the normal reaction would be to run fast to solid ground or clutch at a strong pillar. Similarly, as the shock waves of economic and political change rock the Philippines, business urgently searches for secure avenues of profit; people look for pillars of inner strength to meet life’s challenges and the country seeks stable fundamentals for development.

In these circumstances, Jim Collins; author and educator, offers hope to businesses, people and nations shaken by rapid change.

After six years of research on 18 long-lasting, successful companies, Collins, together with Jerry Porras, published the book “Built to Last,” which reveals “successful habits of visionary companies.” And what they discovered about success and how to make this last has made a great impact on businesses and people worldwide. This book, which has been on the business best seller list of both The New York Times and Business Week, has earned for them acclaim as the emerging “management gurus for the 21st century and beyond.

In his talk, Collins presented the secrets of why companies endure. He explained that preserving the core and stimulate progress. He explained that preserving the core and stimulate progress. He explained that preserving the core comes out of knowing what the company stands for and why it exists. Based on this core values are developed that “become the anchor for what should change and what should not change.” Preserving the core can be done by having a core ideology, a cult-like culture and homegrown management. While preserving the core, Collins said the company should simultaneously stimulate progress. This can be done by establishing “BHAGs,” or Big Hairing Audacious Goals, trying a lot of stuff, and keeping what works and never saying something is good enough because good never is.

A teacher and a researcher by profession, Collins presents an unorthodox image of academician. He passionately speaks about his book in a fast-paced, concise manner, revealing his substantial academic credentials as a former professor at the prestigious Stanford University Graduate School of Business, where he taught for seven years. While at Stanford, he earned four teaching wards, including the 1992 Distinguished Teaching Award.

During a news conference, he answered varied questions with a disarming openness and straight forwardness that indicated his research orientation.

He is presently running his own research and teaching laboratory in Boulder, Colorado, where he directs major new research projects and works with senior executives. While speaking, he energetically paces the floor. Book- and lab- bound though he may be, it is not hard to believe that he is also an avid rock climber who has already made free ascents of the El Capotan and Washington Column in Yosemite Valley.

Since the press conference provided little opportunity for more detailed questions relevant to the Philippines, he consented to be interviewed by this writer via e-mail after the conference. The following are the responses of Collins to the questions sent to his personal email address.

Q: Your book “Built to Last” is hugely poplar in the Philippines. A CEO of a big manufacturing company in the Philippines bought copies of your book for all his managers. In executive offices, one can see it displayed along with Peter Drucker’s timeless books. You mentioned that the success of the book surprised you. Based on feedback from your readers, why do you think it has created such an impact? It is because in this age of rapid changes, people are looking for anchors not only in the corporate world but also in their personal lives as well? Or to put it another way, what do you think is the extent of your book’s impact on the corporate world as well as in the lives of people in corporations? On the other hand, how has the success of the book affected your own life, personally and professionally?

A: I believe that the book has created its impact and been successful because, first and foremost, the truth is inherently compelling. In our research, Jerry Porras and I strove to the best of our ability to find the truth about enduring great companies and what really is the case, rather than what we hoped would be the case. Second, I think the very notion of trying to build something to last or trying to build something great enduring appeals to people who wonder about what kind of legacy they would like to create. Third, the companies we wrote about companies like Walt Disney, Hewlett Packard, Boeing and Citicorp are such fascinating and inspirational stories, and people like to learn from their stories, and people like to learn from their success.

The book has of course, also had an impact on me and my own thinking. Certainly, the success of the book has allowed me to create my own research institute so that I can pursue new questions. But it has done more than that; it had also given me a personal framework for how to confront many of the challenges of my own life.

Q: If you were a CEO whose company is in the midst of an economic crisis and political uncertainty and you would like to transform your company into a visionary company, what would be the very first thing that you would do, given all the findings in your book, to put your company on the right track towards becoming a visionary company? What would be the single most valuable concept that you would bear in mind?

A: I cannot pick a single concept that I would focus on at the expense of other concepts in the book in an effort to transform a company; they really work together as in integrated package. If I were to focus on a couple of concepts, I would focus on the importance of getting deeply clear about the vision for the organization (defined as core values, plus core purpose plus PHAG) and bringing the vision to life by building mechanisms that would drive the company toward the achievement of its vision.

Q:No one can step in the same river twice” said Heraclitis in 500 B.C. And it has often been said that the only thing that’s permanent is change. Do you think that the “Built to Last” principles can be a guide to companies in the next 100 years? For example, one of your findings is that visionary companies “preserve the core and stimulate progress.” Do you think that companies that would last the next 100 years would still exhibit this same characteristic or that it may be that by then it would be “preserve progress and stimulate the core.”

A: I really like your idea of preserve progress stimulate core; it is a very provocative twist. I go back to the notion of the yin and the yang nothing is all yin and nothing is all yang. One of the elements of a great organization is that it is always doing “change and preservation.” And in the very act of preserving lie the seeds of change and in the very act of change lie the seeds of preserving. I believe that underlying physics of great companies will be as thru 100 years from now as they are today; especially the notion of being clock builders versus time tellers, and the notion of preserve the core and stimulate progress. However, I believe that the types of clock (i.e., the types of organizations and the mechanisms by which they operate) that will be built might be radically different. I also believe that will be built might be radically different. I also believe that the precise mechanisms and methods for preserving the core and stimulate progress will also be radically different. In my own view will likely see large successful organizations that have no employees, for example. But we will see more organization held together by a very tight value system, but operate with radical (by our standards) decentralization and operating autonomy. A good example of a company that is doing that already is Mary Kay Cosmetics.

Q: With the huge success, of your book with Porras, what’s the next step for you? What would you suggest as a logical next step for you? Scanning the world horizon, what do you think is an area of concern in business that would impact globally that needs to be researched on? Did the publication of your book trigger new research work along similar areas?

A: You ask what the next step is. I have to put that in some context. I view myself first and foremost as a teacher, and that my own personal purpose is to contribute through learning and teaching. I have the great good fortune of being only 40 years old, so I have quite a number of decades of productive years in font of me, and I intend to employ those years in the pursuit of new questions that I can learn to answer to, and thereby contribute by teaching what I learn. Right now, I have my own research laboratory in Boulder Colorado, where I am engaged in a new multi-year research project. I anticipate doing roughly two major research projects every decade for the next few decades, and I do not know yet what my follow on project will be from the current one. However, I have a long list of ideas, and I suspect my curiosity will leave me with far too few years and a large number of unanswered questions by the time I am done. As I mentioned at the beginning of this, I do believe that the truth (with small “t”) is inherently powerful and compelling. And I believe that if I apply myself with diligence and the vigilance towards the pursuit of truth and understanding, I will thereby be able to make a contribution to the development of individuals, organizations, societies.

Although I do not know how large those contributions I make are ones that have an inherent integrity of intention and that I can be proud of.

Author: Regina Galang Reyes. First published in the Philippine Daily Inquirer September 7, 1998.

Photo credit: www.sxc.hu

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