Table of Contents
‘Built to Last: Successful Habits of Visionary Companies’ is written by Jim Collins and Jerry I. Porras. It outlines the results of a six-year research project exploring what leads to enduringly great companies. It is said to be “one of the most influential business books of our era”.
Visionary Companies
Visionary companies are premier institutions—the crown jewels—in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them. The key point is that a visionary company is an organization—an institution. All individual leaders, no matter how charismatic or visionary, eventually die; and all visionary products and services—all “great ideas”—eventually become obsolete. Indeed, entire markets can become obsolete and disappear. Yet visionary companies prosper over long periods of time, through multiple product life cycles and multiple generations of active leaders.
Pause for a moment and compose your own mental list of visionary companies; try to think of five to ten organizations that meet the following criteria:
- Premier institution in its industry
- Widely admired by knowledgeable businesspeople
- Made an indelible imprint on the world in which we live
- Had multiple generations of chief executives
- Been through multiple product (or service) life cycles
- Founded before 1950
Story of 3M Company
Founded on June 13, 1902; 119 years ago (as Minnesota Mining and Manufacturing Company). The 3M Company is an American multinational conglomerate corporation operating in the fields of industry, worker safety, US health care, and consumer goods. The company produces over 60,000 products under several brands, including adhesives, abrasives, laminates, passive fire protection, personal protective equipment, window films, paint protection films, dental and orthodontic products, electrical and electronic connecting and insulating materials, medical products, car-care products, electronic circuits, healthcare software, and optical films.
3M made $32.8 billion in total sales in 2018 and ranked number 95 in the Fortune 500 list of the largest United States corporations by total revenue. As of 2018, the company had approximately 93,500 employees and had operations in more than 70 countries.
Using 3M as a blueprint for evolutionary progress at its best, here are six basic lessons for stimulating evolutionary progress from a visionary company.
1. Give it a try – and quick!
For 3M the modus operandi became: When in doubt, vary, change, solve the problem, seize the opportunity, experiment, try something new (consistent, of course, with the core ideology)—even if you can’t predict precisely how things will turn out. Do something. If one thing fails, try another. Fix. Try. Do. Adjust. Move. Act. No matter what, don’t sit still. Vigorous action—especially in response to unexpected opportunities or specific customer problems—creates variation.
2. Accept that mistakes will be made
Since you can’t tell ahead of time which variations will prove to be favorable, you have to accept mistakes and failures as an integral part of the evolutionary process. Had 3M nailed Francis Okie and Dick Drew to the wall (or fired them) for the failed car wax business, then 3M probably wouldn’t have invented Scotch tape. Remember Darwin’s key phrase: “Multiply, vary, let the strongest live, and the weakest die.” In order to have healthy evolution, you have to try enough experiments (multiply) of different types (vary), keep the ones that work (let the strongest live), and discard the ones that don’t (let the weakest die). In other words, you cannot have a vibrant self-mutating system—you cannot have a 3M—without lots of failed experiments.
As former 3M CEO Lewis Lehr put it: “The secret, if there is one, is to dump the flops as soon as they are recognized. . . . But even the flops are valuable in certain ways. . . . You can learn from success, but you have to work at it; it’s a lot easier to learn from a failure.”
3. Take small steps
Of course, it’s easier to tolerate failed experiments when they are just that—experiments, not massive corporate failures. Keep in mind that small incremental steps can form the basis of significant strategic shifts. William McKnight’s simple answer to Francis Okie led to waterproof sandpaper, opening a large market in the auto industry, leading to Dick Drew’s masking tape and then to Scotch cellophane tape, which spawned recording tape, and so on. If you want to create a major strategic shift in a company, you might try becoming an “incremental revolutionary” and harnessing the power of small, visible successes to influence overall corporate strategy. Indeed, if you really want to do something revolutionary, it might be best to ask simply for permission to “do an experiment.”
4. Give people the room they need
3M provided greater operational autonomy and maintained a more decentralized structure—a key step that enabled unplanned variation. When you give people a lot of room to act, you can’t predict precisely what they’ll do—and this is good. 3M had no idea what Spencer Silver, Art Fry, and Geoff Nicholson would do with their 15 percent “discretionary time.” In fact, the visionary companies decentralized more and provided greater operational autonomy than the comparison companies. To this lesson, we have a corollary: Allow people to be persistent. Although the Post-it clan had trouble convincing other 3Mers that their weird sticky little notes had merit, no one ever told them to stop working on it.
5. Mechanisms—build that ticking clock!
The beauty of the 3M story is that William McKnight, Richard Carlton, and others translated the previous four points into tangible mechanisms working in alignment to stimulate evolutionary progress. Look back at the list of mechanisms at 3M. Notice how concrete they are. Notice how they send a consistent set of reinforcing signals. And notice how they have teeth.
If you’re a division manager, you damned well better meet the 30 percent new product goal. If you want to become a technical hero at 3M, you’d better share your technology around the company. And if you want to receive a Golden Foot Award and become an entrepreneurial hero, you’ve got to create a successful new venture with actual products, satisfied customers, and profitable sales. Good intentions alone simply won’t cut it. 3M doesn’t just throw a bunch of smart people in a pot and hope that something will happen. 3M lights a hot fire under the pot and stirs vigorously!
We find that managers often underestimate the importance of this fifth lesson and fail to translate their intentions into tangible mechanisms. They mistakenly think that if they just set the right “leadership tone,” people will experiment and try new things. No! It takes more than that. It requires putting in place items that will continually stimulate and reinforce evolutionary behavior.
6. Preserve the core/stimulate progress
Never forget to preserve the core while stimulating evolutionary progress. Keep in mind that evolution involves both variation and selection. In a visionary company, like 3M, selection involves two key questions. The first is simply practical: Does it work? But just as important is the second question: Does it fit with our core ideology?
Since the time of McKnight, 3M has sought to create innovative solutions to real human problems—that’s what the company is all about. Variations at 3M must be new, useful, and reliable (key elements of 3M’s core ideology) in order to stand a good chance of being selected. Certainly, no one at 3M would stop Spencer Silver from spending his 15 percent experimental doodling time on his bizarre glue that didn’t glue. But, equally important, 3M didn’t select the mutant adhesive until Silver married it to Art Fry’s church choir problem*, demonstrated to other 3Mers that the weird little Post-it notes were useful, and proved that they could be produced with 3M quality and reliability.
You can’t win a “Genesis Grant” to develop a me-too product at 3M. You don’t become a member of the Carlton Society without an original technical contribution. You’ll never survive as a division manager if your products prove consistently unreliable in customers’ hands.
(‘*’3M employee Art Fry had a problem: When he sang with his church choir, his paper bookmarks were forever falling out of his hymnal. Thankfully for Fry, his coworker Spencer Silver had a new adhesive in the works.)
“Creativity is thinking up new things. Innovation is doing new things.” —Theodore Levitt
