Built to last.....what makes an enduring business?

I read up on this book "Built to last" long time ago and find it a good read. It talks about what makes certain businesses last for a long time. I cannot remember details of the reading but some parts of the book are still vivid in my mind. I guess remembering and internalising the essence in any reading is more important than trying to recall all details of the read.

In my sharing below, I shall present the information I got from the reading together with my own reflections.

What makes an enduring business last for long?

1. A strongly cherished vision that does not change and is not easily changed through time.
2. A great succession plan ensuring vision of the company is passed on from predecessors to successors.
3. Focus on getting the right people onto the train (company) and getting the wrong people off the train quickly.
4. Ability to allow each employee to discover what they are best at and let them do what they are best at.
5. Keeping to the core business that the company is best at and most suitable for.


1. A strongly cherished vision that serves a great meaningful purpose

Every great company has a strongly cherished vision that does not change through time. To be able to achieve this, the vision must be a great one that can endure the test of time. Everyone in the company owns the vision and it is clearly communicated from top to bottom in the company. The success of an enduring company depends on how much ownership the employees of the company have of it's vision. For example, a great pharmaceutical company has the vision of "we seek to save lives by offering the best possible drugs at affordable prices so that no one will suffer poor health or die because he cannot afford to pay for drugs." The vision must be strongly cherished by every employees in the company and all the routine business activities revolve around fulfiling the vision. Whenever anyone speaks about the company, they tell of it's vision. Whenever anyone acts in the course of the business, they act in the interest of fulfiling the vision. The vision is why the company existed from start and it is the only reason the company will continue to exist.

Every great enduring company grows out from it's vision. It feeds from it's vision just as a green plant depends on sunlight to exist, because it is that strongly cherished vision by all employees that allows the company to even exist. A great enduring vision ensures the company endures. The vision creates value for all it's employees from top to bottom. Every employee enjoys their work because they enjoy fulfiling the meaning of the vision in every little detail of their work. For the great pharmaceutical company example above, the top management enjoy coming out with strategies to keep the company researching on the best possible drugs to cure deadly diseases. The management seeks ways to sell the drug directly as far as possible to the patients so as to minimise distribution costs so that any cost savings can be passed on to the patients and the drugs can be bought at affordable prices. The researchers work hard at coming out with the best possible drugs to save lives. The sales and marketing team enjoy helping to bring the drugs to sell at places where it is most needed and not because it is most lucrative.

Therefore, from top to bottom in a company, everyone believes strongly in the same vision and they know they must live out the vision in the way they work. Anyone who deviates from the vision cannot belong to the company. The vision serves a great purpose and the purpose is not always the case of profitability for the business. In the example of the great pharmaceutical company, it's vision serves the purpose of cherishing and helping to save lives.


2. A great succession plan ensuring vision of the company is passed on from predecessors to successors

A great vision must stand the test of time. Thus, enduring companies always ensure they have a great succession plan to groom talents from within the company who will rise up to steer and lead the company to continue to grow on it's vision. As such, successors of CEOs most often come from within the company since these capable people have long embraced the vision of the company and now they will rise up to take on the most important responsibility to lead the company to grow on it's vision.


3. Focus on getting the right people onto the train (company) and getting the wrong people off the train quickly

Great enduring companies take pains to hire the right people who will embrace their vision. Hiring is a very important process as the right people hired will help the company to continue it's growth. Hiring the wrong people who do not believe in the vision of the company will slowly erode away the vision and corrupts the rest of the employees who believes in the vision. So, it may not be always a matter of hiring based on talents alone. The right talented people must be hired so that there is a good fit with the vision of the company. So, hiring is a very important process that must be done with upmost care as it is always easy to get people onto the train (company) but hard to get the wrong people off the train (company). However, when a wrong hire has been done, the company must quickly dismiss the wrong people to avoid the wrong people corrupting the rest of the employees to deviate from their cherished vision. Thus, hire slowly with careful consideration for a good fit into the vision of the company (apart from considering needed talents) and quickly dismiss any wrong hire to ensure the vision of the company can be preserved. Anyway, the wrong hire will function at their best eventually in another company that they can be of good fit to it's vision.


4. Ability to allow each employee to discover what they are best at and let them do what they are best at

Great enduring companies after hiring the right talented people, ensure their employees enjoy what they do best in the company. Every person is unique having their unique personality, beliefs, strengths and weaknesses. So, not everyone is made for the same job. The worker that functions the best functions out of the best job that he enjoys doing. So, care must be taken not only to ensure a good hire that is a good fit into the vision of the company. Care must also be taken to ensure the right hire can function at his best in the job that he enjoys doing his best in. It may take time to find the best fit into a suitable job role in a company. However, it is worth the effort and time to allow every employee to find a suitable job role so that they can function at their best.


5. Keeping to the core business that the company is best at and most suitable for

Just as it is important to ensure every employee does what he is best at, great enduring companies understand they must do what they are best suited at and do it even better than it's competition. Thus, they stick to their core business and continue to grow better at doing their core business. They are usually leaders or aspiring leaders in their market. They are careful not to deviate too far out and become distracted from becoming best at doing it's core business that it is suited at doing. Thus, every acquisition and merger has to be under very careful consideration by the company to ensure a good fit so that the company does not deviate from it's vision and core business that it is best suited at doing.

Conclusion

Be it on a personal level or organisational level, realise a great vision that one truly cherishes and commit to doing one's best at it and even becoming one of the best at doing than others. It may not always be a must to be at the top. Just being able to function at one's best in something one believes passionately in is already a bliss.