Thoughtful people crave time-tested fundamentals; they're tired of the 'fad of the year' boom-and-bust cycle of management thinking

Executives at companies in transition find the concepts in Build to Last to be helpful in bringing about productive change without destroying the bedrock foundation of a great company

'What do we stand for and why do we exist?'

Visionary companies distinguish their timeless core values and enduring purpose (which should never change) from their operating practices and business strategies (which should be changing constantly in response to a changing world)

Preserve core values and core purposes, change cultural and operating practices and specific goals and strategies

One 'secret' to an enduring great company, it is the ability to manage continuity and change

Solid, paying attention to the fundamentals, shunning the limelight, creating jobs, generating wealth, and making a contribution to society

'Try a lot of stuff and keep what works'

The best organizations everywhere pay close attention to consistency and alignment

A global visionary company separates operating practices and business strategies from care values and purpose

A visionary company exports its core values and purpose to all of its operations in every country, but tailors its practices and strategies to local cultural norms and market conditions

In everything we do, we take the long view. Always

The concept of 'clock building' an organization with a strong cult-like culture that transcends dependence on the original visionary founders has aided a number of social-cause organizations

Looking for a deeper more enduring purpose that goes beyond the original founding concept therefore becomes vitally important to building a lasting organization

The only truly reliable source of stability is a strong inner core and the willingness to change and adapt everything except that core

It is better to understand who you are than where you are going

'Above all, there was the ability to build and build and build—never stopping, never looking back, never finishing' - Richard Schickel

'I have concentrated all along on building the finest retailing company that we possibly could. Period. Creating a huge personal fortune was never particularly a goal of mine' - Sam Walton

Having a great idea or being a charismatic visionary leader is 'time telling'; building a company that can prosper far beyond the presence of any single leader and through multiple product life cycles is 'clock building'

Their greatest creation is the company itself and what it stands for

Creating a building a visionary company absolutely does not require either a great idea or a great and charismatic leader

'We didn't have any plans when we started—we were just opportunistic' - Bill Hewlett

'I had no vision of the scope of what I would start, but I always had confidence that as long as we did our work well and were good to our customers, there would be no limit to us' - Sam Walton

We found a negative correlation between early entrprenurial success and becoming a highly visionary company

If you are a prospective entrepreneur with the desire to start and build a visionary company but have not yet taken the plunge because you don't have a 'great idea,' we encourage you to lift from your shoulders the burden of the great-idea myth. The evidence suggests that it might be better to not obsess on finding a great idea before launching a company. The great-idea approach shifts your attention away from seeing the company as your ultimate creation

The company itself is the ultimate creation

Shift from seeing the company as a vehicle for the products to seeing the products as a vehicle for the company

Luck favors the persistent

Never, never, never give up

Be prepared to kill, revise, or evolve an idea, but never give up on the company. If you equate the success of your company with the success of a specific idea then you're more likely to give up on the company if that idea fails; and if that idea happens to succeed, you're more likely to have an emotional love affair with that idea and stick with it too long, when the company should be moving vigorously on to other things. If you see the ultimate creation as the company, not the execution of a specific idea or capitalizing on a timely market opportunity, then you can persist beyond any specific idea and move toward becoming an enduring great institution

'Engineers are creative people, so before we hired an engineer we made sure he would be operating in a stable and secure climate. We also made sure that each of our engineers had a long range opportunity with the company and suitable projects on which to work. We made certainn that we had adequate supervision so that our engineers would be happy and would be productive to the maximum extend. Engineering is one of our most important products' - Bill Hewlett

'The problem is, how do you develop an environment in which individuals can be creative?' - Dave Packard

Spending less of your time thinking about specific product lines and market strategies, and spending more of your time thinking about organization designn

Spending less of your time being a time teller, and spending more of your time being a clock builder

These companies don't exist just to 'be a company'; they exist to do something useful. The continual stream of great products and services from highly visionary companies stems from their being outstanding organizations, not the other way around

Psychological evidence indicates that personality traits get set relatively early in life through a combination of genetics and experience, and there is little evidence to suggest that by the time you're in the managerial role you can do much to change your basic personality style

Charismatic style is clearly not required for building a visionary company

'We were really trying from the beginning to become the very best operators—the most professional managers—that we could. Underneath that personality, I have always had the soul of an operator, somebody who wants to make things work well, then better, then the best they possibly can... I was never in anything for the short haul; I always wanted to build as fine a retailing organizatioon as I could' - Sam Walton

Walton valued change, experimentation, and constant improvement

Motorola's founder, Paul Galvin, hired excellent engineers. He encouraged dissent, discussion, and disagreement, and give individuals 'the latitude to show what they could do largely on their own' He set challenges and gave people immense responsibility so as to stimulate the organization and its people to grow and learn, often by failures and mistakes

Think more in terms of being an organizational visionary and building the characteristics of a visionary company

It's a clock based on human ideals and values. It's a clock built on human needs and aspirations. It's a clock with a spirit

The important thing to keep in mind is that once you make the shift from time telling to clock building, most of what's required to build a visionary company can be learned. You don't have to sit around waiting until you're lucky enough to have a great idea. You don't have to accept the false view that until your company has a charismatic visionary leader, it cannot become a visionary company

'The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function' - F. Scott Fitzgerald

'We are in the business of preserving and improving human life. All of our actions must be measured by our success in achieving this goal'

'Putting profits after people and products was magical at Ford' - Don Peterson

A fundamental element in the 'ticking clock' of a visionary company is a core ideology—core values and sense of purpose beyond just making money—that guides and inspires people throughout the organization and remains that guides and inspires people throughout the organization and remains relatively fixed for long periods of time

Core ideology in a visionary company is a set of basic precepts that plant a fixed stake in the ground: 'This is who we are; this is what we stand for; this is what we're all about'

We did not find maximizing shareholder wealth or profit maximization as the dominant driving force or primary objective through the history of most of the visionary coompanies

Visionary companies have generally been more ideologically driven and less purely profit-driven than the comparison companies

Profitability is a necessary condition for existence and a means to more important ends, but it is not the end in itself for many of the visionary companies. Profit is like oxygen, food, water, and blood for the bodyl they are not the point of life, but without then, there is no life

A group of people get together and exist as aninstitution that we call a company so they are able to accomplish something collectively that they could nnot accomplish separately—they make a contribution to society

'Anyone who cannot accept profit as one of the most important objectives of this company has no place either now or in the future on the management team of this company' - David Packard

'Profit is a cornerstone of what we do—it is a measure of our contribution and a means of self-financed growth—but it has never been the point in and of itself. The point, in fact, is to win, and winning is judged in the eyes of the customer and by doing something you can be proud of. If we provide real satisfaction to real customers—we will be profitable' - John Young

'Enlightened self-interest service to customers comes first... service to employees and management second, and service to stockholders last' - Robert W. Johnson Jr.

'Boeing is always reaching out to tomorrow. This can only be accomplished by people who live, breathe, eat and sleep what they are doing. Mann's objective should be opportunity for greater accomplishment and greater service. The greatest pleasure life has to offer is the satisfaction that flows from participating in a diffifult and constructive undertaking' - Bill Allen

'Tell them the truth first because it is the right thing to do and second they'll find out anyway' - Paul Galvin

Social psychology research strongly indicates that when people publicly espouse a particular point of view, they become much more likely to behave consistent with that point of view even if they did not previously hold that point of view

The very act of stating a core ideology influences behavior toward consistency with that ideology

Purpose = the organization's fundamental reasons for existence beyond just making money

Core values are the organization's essential and enduring tenets, not to be compromised for financial gain or short-term expediency

'The real difference between success and failure in a corporation can very often be traced to the question of how well the organization brings out the great energies and talents of its people' - Thomas J. Walson, Jr.

'Beliefs must always come before policies, practices, and goals. The latter must always be altered if they are seen to violate fundamental beliefs' - Thomas J. Walson, Jr

'We put the customer ahead of everything else... If you're not serving the customer, or supporting the folks who do, then we don't need you' - Sam Walton

'The HP Way basically means respect and concern for the individual; it says 'Do unto others as you would have them do unto you.' That's really what it's all about.' - John Young

Visionary companies tend to have only a few core values, usually between three and six. Only a few values can be truly core

Core ideology exists as an internal element, largely independent of the external environment

The primary role of purpose is to guide and inspire, not necessarily to differentiate

Purpose is broad, fundamental, and enduring a good purpose should serve to guide and inspire the organization for years, perhaps a century or more

A company can have the world's most deeply cherished and meaningful core ideology, but if it just sits still or refuses to change, the world will pass it by

'You can't just keep doing what works one time, because everything around you is always changing. To succeed, you have to stay out in front of that change' - Sam Walton

'If an organization is to meet the challenges of a changing world, it must be prepared to change everything about itself except its basic beliefs as it moves through corporate life. The only sacred cow in an organization should be its basic philosophy of doing business' - Thomas J. Watson, Jr.

The drive for progress arises from a deep human urge—to explore, to create, to discover, to achieve, to change, to improve

'It behooves no-one to dismiss any novel idea with the statement that it can't be done' - William E. Boeing

'We can always do better; we can always go further; we can always find new possibilities. You have got to keep doing and going' - Henry Ford

The drive for progress is an internal force

By being clear about what is core a company can more easily seek variation and movement in all that is not core

The builders of visionary companies seek alignment in strategies, in tactics, in organization systems, in structure, in incentive systems, in building layout, in job design—in everything

Big Hairy Audacious Goals (BHAGs): Commitment to challenging, audacious—and often risky—goals and projects toward which a visionary company channels its efforts

Cult-like Cultures: Great places to work only for those who buy in to the core ideology; those who don't fit with the ideology are ejected like a virus

Try a lot of stuff and keep what works: high levels of action and experimentation—often unplanned and undirected—that produce new and unexpected paths of progress and enables visionary companies to mimic the biological evolution of species

Home-grown Management: promotion from within, bringing to senior levels only those who've spent significant time steeped in the core ideology of the company

Good is never enough: a continual process of relentless self-improvement with the aim of doing better and better, forever into the future

'Far better to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much because they live in the gray twilight that knows not victory, nor defeat' - Theodore Roosevelt

All companies have goals. But there is a difference between merely having a goal and becoming committed to a huge, daunting challenge

A true BHAG is clear and compelling and serves as a unifying focal point of effort. It has a clear finish line, so the organization can know when it has achieved the goal; people like to shoot for finish lines

The first step is for the company to 'define its destiny in broad but clear terms. You need an overarching message, something big, but simple and understandable' - Jack Welsh

A BHAG only helps an organization as long as it has not yet been achieved

The BHAGs looked more audacious to outsiders than to insiders. It simply never occurred to them that they couldn't do what they set out to do

We find an aim, a real and clear target and then establish the necessary task forces to get the job done. Once the commitment to go ahead is made, never give up

An organization can have any number of BHAGs

A BHAG should be so clear and compelling that it requires little or no explanation

A BHAG should fall well outside the comfort zone. People in the organization should have reason to believe they can pull it off, yet it should require heroic effort and perhaps even a little luck

'From this day forward, I solemnly promise and declare that every time a customer comes within ten feet of me, I will smile, look him in the eye, and greet him.' - Sam Walton

Because the visionary companies clarity about who they are, what they're all about, and what they're trying to achieve, they tend to not have much room for people unwilling or unsuited to their demanding standards

'Time lost is time gone forever. We must never feel satisfied. We sell service. A company is known by the men it keeps' - Thoman J. Watson

'At Disneyland we get tired, but never bored, and even if it's a rough day, we appear happy. You've got to have an honest smile. It's got to come from within... If nothing else helps, remember that you get paid for smiling'

Cultism around an individual personality is time telling; creating an environment that reinforces dedication to an enduring core ideology is clock building

'We want to give each clerk a lot of latitude in figuring out what to do. We view our people as sales professionals. They don't need rules. They need basic guideposts, but no rules. You can do anything you need to at Nordstrom to get the job done, just so long as you live up to our basic values and standards' - Jim Nordstrom

Companies seeking an 'empowered' or decentralized work environment should first and foremost impose a tight ideology, screen and indoctrinate people into that ideology, eject the viruses, and give those who remain the tremendous sense of responsibility that comes with membership in an elite organization. Getting the right actors on the stage, putting them in the right frame of mind, and then giving them the freedom to ad lib as they see fit

'To my imagination it is far more satisfactory to look at well-adapted species not as specially endowed or created instincts, but as small consequences of one general law leading to the advancement of all organic beings—namely, multiply, vary, let the strongest live and the weakest die.' - Charles Darwin

'Our company has, indeed, stumbled onto some of its new products. But never forget that you can only stumble if you're moving' - Richard P. Carlton

'Failure is our most important product' - R. W. Johnson, Jr.

Visionary companies often made some of their best moves not by detailed strategic planning, but rather by experimentation, trial, and error, opportunism, and accident

'Do it. Fix it. Try it.' If you try something and it works, you keep it. If it doesn't work, you fix it or try something else

'Listen to anyone with an original idea, no matter how absurd it might sound at first'

'Encourage; don't nitpick. Let people run with an idea'

'Hire good people, and leave them alone'

'If you put fences around people, you get sheep. Give people the room they need'

'Encourage experimental doodling'

'Give it a try—and quick!'

'Mistakes will be made by giving people the freedom and encouragement to act autonomously, but the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it is dictatorial and undertakes to tell those under its authority exactly how they must do their job. Management that is destructively critical when mistakes are made kills initiative and it's essential that we have many people with initiative if we are to continue to grow'

When in doubt, vary, change, solve the problem, seize the opportunity, experiment, try something new—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

'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'

'Take small steps' Of course, it's easier to tolerate failed experiments when they are just that—experiments, not massive corporate failures

'To continue our progress and service to America and the world, we need a healthy appreciation for those who exercise... the option for excellence, permitting the creation of something for all of us, enriching lives with new ideas and products. The best and hardest work is done in the spirit of adventure and challenge' - William McKnight

Across seventeen hundred years of combined history in the visionary companies, we found only four individual cases of an outsider coming directly into the role of chief executive

P&G understood the importance of constantly developing managerial talent so as to never face gaps in succession at any level, and therefore to preserve its core throughout the company

Do not fall into the trap of thinking that the only way to bring about change and progress at the top is to bring in outsiders, who might dilute or destroy the core. The key is to develop and promote insiders who are highly capable of stimulating healthy change and progress, while preserving the core

From the perspective of building a visionary company, the issue is not only how well the company will do during the current generation. The crucial question is, how well will the company perform in the next generation, and the next generation after that, and the next generation after that? All individual leaders eventually die. But a visionary company can tick along for centuries, pursuing its purpose and expressing its core values long beyond the tenure of any individual leader

'Don't bother just to be better than your contemporaries or predecessors. Try to be better than yourself' - William Faulkner

'People would always say to my father, 'Gee whiz, you've done really well. Now you can rest.' And he would reply, 'Oh, no. Got to keep going annd do it better.'' - J. Willard Marriott, Jr.

'How can we do better tomorrow than we did today?'

Superb execution and performance naturally come to the visionary companies not so much as an end goal, but as the residual result of a never-ending cycle of self-stimulated improvement and investment for the future

Visionary companies attain their extraordinary position because of the simple fact that they are so terribly demanding of themselves. Becoming and remaining a visionary company requires oodles of plain old-fashioned discipline, hard work, and a visceral revulsion to any tendency toward smug self-satisfaction

'Discipline is the greatest thing in the world. Where there is no discipline, there is no character. And without character, there is no progress. Adversity gives us opportunity to grow. And we usually get what we work for. If we have problems and overcome them, we grow tall in character, and the qualities that bring success.' - J. Williard Marriott, Sr.

Continuous improvement means doing everything possible to make the company stronger tomorrow than it is today

Comfort is not the object in a vision company. Indeed, visionary companies install powerful mechanisms to create discomfort—to obliterate complacency—and thereby stimulate change and improvement before the external world demands it

Contentment leads to complacency, which inevitably leads to decline

'If you really listen to your customers, they're never happy—they'll let you know what you're doing wrong—and it just forces you to get better. Fat headedness is what bothers me most. I think we get so much press about our service and all this stuff and we start believing it and then we think we're better than the customer. And then we're dead right there' - Bruce Nordstrom

If you want to innovate, you must bootstrap

Just because a company has a vision statement in no way guarantees that it will become a visionary company

The essence of a visionary company comes in the translation of its core ideology and its own unique drive for progress into the very fabric of the organization—into goals, strategies, tactics, policies, processes, cultural practices, management behaviors, building layouts, pay systems, accounting systems, job design—into everything that the company does

HP's 'Four Musts': The company must attain profitable growth; the company must make its profit through technological contribution; the company must recognize and respect the personal worth of employees and allow them to share in the success of the company; and the company must operate as a responsible citizen of the general community

To promote an entrepreneurial culture provide a well-defined objective, give the person as much freedom as possible in working toward that objective, and finally, provide motivation by seeing that the contribution of the individual is recognized throughout the organization

If you grow too fast, you can lose your values

Taking care of his or her people is the most important part of every management job. In no case is the personnel department expected to handle the manager's personnel problems—he or she must accept and handle the personnel responsibility to be a good manager

It's the little things that make a big impression, that send powerful signals

Alignment means being guided first and foremost by one's own internal compass, not the standards, practices, conventions, forces, trends, fads, fashions, and buzzwords of the outer world

You should be working to implement as many methods as you can think of to preserve a cherished core ideology that guides and inspires people at all levels. You should be working to invent mechanisms that create dissatisfaction with the status quo and stimulate change, improvement, innovation, and renewal

Be a clock builder—an architect—not a time teller

Embrace the 'Genius of the AND'

Preserve the core/stimulate progress

Seek consistent alignment

It is through the power of human organization that the bulk of the world's best work gets done

The most enduring and successful corporations distinguish their timeless core values and enduring core purpose from their operating practices and business strategies. In truly great companies, change is a constant, but not the only constant

A good vision defines what we stand for and why we exist that does not change and sets significant change and progress to attain

It is far more important to know who you are than where you are going, for where you are going will certainly change as the world about you changes

Core values are the organization's essential and enduring tenets—a small set of timeless guiding principles that require no external justification; they have intrinsic value and importance to those inside the organization

The key is to work from the individual to the organization

What core values do you personally bring to your work—core values you hold to be so fundamental that you would keep them regardless of whether they are rewarded?

Whereas you might achieve a goal or complete a strategy, you cannot fulfill a purpose

You do not 'create' or 'set' core ideology. You discover core ideology. You get at it by looking inside

You cannot 'install' new core values or purpose into people. Core values and purpose are not something people 'buy in' to

Envisioned future consists of two parts: a ten-to thirty-year 'Big Hairy Audacious Goal' and vivid descriptions of what it will be like when the organization achieves the BHAG

Setting the BHAG ten to thirty years into the future requires thinking beyond the current capabilities of the organization and current capabilities of the organization and current environmental trends, forces, and conditions. Inventing such a goal forces an executive team to be visionary, rather than just strategic or tactical

Vivid descriptions, the second component of envisioned future, is a vibrant, engaging, and specific description of what it will be like to achieve the BHAG. Think of it as translating the vision from words into practices, of creating an image that people can carry around in their heads

Purpose is the organization's fundamental reason for existence, which like a star on the horizon can never be reached; it guides and inspires forever. A BHAG, on the other hand, is a specific goal which has a specific time frame and can be achieved. Whereas identifying core ideology is a discovery process, setting the envisioned future is a creative process