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 / Fourth Quarter 2001 / Issue 25(originally published by Booz & Company)


Climbing to Greatness with Jim Collins

In 1989, he returned to Stanford to teach a course on entrepreneurship. He discovered he was a gifted teacher, with a knack for listening to people and helping them recognize the implications of their ideas. He was also noticeably intent on wasting neither his own time nor that of his students. His classes were full of innovations like the “red flag” — each student got one chance per semester to stop the class discussion in its tracks and say something. He took his students seriously — so much so that he was deeply angered with his “built to flip” students, as he called them, those who cheerfully proclaimed they wanted to become entrepreneurs just to sell out and get rich quick.

“I had a mental image of pinning them against a wall, physically, and saying, ‘You have so much talent. You can do better than that,’ ” Mr. Collins says.

By his second year at Stanford, he began to feel he was “feeding my students cyanide.” He taught the Apple Computer case, for instance, as a great success story, when it was already clear that Apple’s luster had faded. What, he wondered, was the real source of Apple’s initial success? And what if that success had come despite its management practices, instead of because of them?

Mr. Collins placed an article that year in the San Jose Mercury business section about how important to a company’s success it is for a leader to clearly articulate his firm’s mission. At that time, Jerry Porras had been engaged in his own exploration of what he called organizational purpose. “I read the article and called Jim to arrange a meeting to discuss what he meant by mission and what I meant by purpose, and whether the two were the same or different,” Professor Porras recalls. Mr. Collins jumped at the chance to work with him, and the research idea evolved from there. Together they framed the original question, but Professor Porras provided the academic cover for the project. Indeed, Professor Porras says he knew of no tenured faculty member who had ever teamed up with a lecturer to pursue a research project of this magnitude. The pair solidified their “Built to Last” partnership, which lasted five years.

They polled CEOs, asking which companies they thought were the most visionary in the world, and then read every article they could find about those companies to cull common factors. The result was a list of built-to-last companies whose performances, with their ups and downs, have stood the test of time: 3M, American Express, Boeing, Citicorp, Ford Motor, General Electric, Hewlett-Packard, IBM, Johnson & Johnson, Marriott, Merck, Motorola, Nordstrom, Philip Morris, Procter & Gamble, Sony, Wal-Mart, and Walt Disney. The authors’ meticulous research revealed themes that have since become well-known catchphrases: “big hairy audacious goals,” the balance between “preserving the core and stimulating progress,” and the idea of “Clock Builders” (leaders who develop innate organizational capacities instead of merely “telling time”).

Perhaps the most significant innovation in Built to Last was the sustained use of comparative analysis. Mr. Collins and Professor Porras did not just investigate Boeing Company and General Electric; they studied and compared them to respectable, but lesser-performing, competitors, like the McDonnell Douglas Corporation and Westinghouse Electric Company — a method Mr. Collins also applied in his new book. This allowed them to eliminate the factors that seem to explain success, but don’t truly distinguish the winners. Or, as Mr. Collins put it, “Every built-to-last and good-to-great company has tall buildings.” The trick is to find factors that mediocre companies don’t have.

The Enemy of Great
During the years of intensive collaboration with Professor Porras to produce Built to Last, Mr. Collins gave up most of his consulting income. He and his wife lived in a small Palo Alto cottage on an annual income of $33,000, living more frugally than many of his students. Meanwhile, he refused to get a Ph.D. (“I thought it would screw up my thinking”) and made no secret of his contempt for the specializations (or, as he called them, the “churches”) of management theory. Unsurprisingly, when the book was done, he no longer felt welcome on Stanford’s campus. He was tempted to launch a consulting career based on the precepts he and Professor Porras had discovered, and he took on a few clients, Starbucks being one. But he knew that consulting, like academic work, would force him into a pigeonhole and make it difficult to keep the open mind
necessary to ask and answer genuine questions. As Built to Last became a bestseller, he gained the means to move back to Boulder and begin to research a new “big hairy audacious” question.

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  1. Jim Collins, Good to Great: Why Some Companies Make the Leap ... and Others Don’t (HarperBusiness, 2001)
  2. James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (HarperBusiness, 1994)
  3. Jim Collins, “Level 5 Leadership: The Triumph of Humility and Fierce Resolve,” Harvard Business Review, January 2001; Click here
  4. Jim Collins’s Web site: Click here
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