successful habits of visionary companies

8/14/2019 Successful Habits of Visionary Companies

1/8

Successful Habits of Visionary Companies

For This Guru, No Question Is Too Big

A lifelong climber, Jim Collins brings the same doggedness to his research, exploringmysteries like why some companies succeed and, in his latest book, how successfulcompanies can implode.

By ADAM BRYANTPublished: May 23, 2009

Jim Collins times himself and tries to stick to his goal of spending half his workday oncreative pursuits like his research. To keep the other category small, he keeps hiscompany small.

JIM COLLINS calls his third-floor offices in the heart of this mountain-ringed city amanagement lab. But little distinguishes his workspace from most others, save for afew things.

There is, for example, the small sign outside the door: ChimpWorks. In case anybodydoesnt get the point, a large Curious George doll sits in a leather chair, delivering thewe-ask-a-lot-of-questions-here punch line. And in a corner of the white board at the endof his long conference room, Mr. Collins keeps this short list:

Creative 53%

Teaching 28%

Other 19%

That, he explains, is a running tally of how hes spending his time, and whether hessticking to a big goal he set for himself years ago: to spend 50 percent of his workdays oncreative pursuits like research and writing books, 30 percent on teaching-relatedactivities, and 20 percent on all the other things he has to do.

These arent ballpark guesstimates. Mr. Collins, who is 51, keeps a stopwatch with threeseparate timers in his pocket at all times, stopping and starting them as he switches

activities. Then he regularly logs the times into a spreadsheet.

He has a good jump, too, on another overarching goal hes set for himself: to produce alasting and distinctive body of work.

Within the sprawling and overpopulated world of self-styled gurus dispensing advice onmanagement and leadership, Mr. Collins is in rare company. His last two books Built
http://topics.nytimes.com/top/reference/timestopics/people/b/adam_bryant/index.html?inline=nyt-perhttp://topics.nytimes.com/top/reference/timestopics/people/b/adam_bryant/index.html?inline=nyt-per


2/8

to Last and Good to Great were breakout hits, selling about seven million copiescombined.

Rather than presenting silver-bullet formulas that are easily forgotten, Mr. Collinss booksoffer tangible frameworks for understanding why organizations succeed. His winning

streak is about to be tested with his just-released book, which takes a turn, as he says, tothe dark side, focusing on why companies fail. At any other time, it would seem a longshot, in that it lacks the upbeat message of his previous books. But his timing, given thenumber of once-great companies now in ruin, couldnt have been better.

It seems that Mr. Collins, for all his exacting approaches to time management andresearch, has been blessed with something he cannot control: repeated bouts of flat-outluck.

He started researching his new book, titled How the Mighty Fall: And Why SomeCompanies Never Give In, in 2005. Back then, the Dow Jonesindex had passed 10,000

and was still climbing, eventually to more than 14,000, andBear Stearns,LehmanBrothers,General Motors and Fannie Maestill had bright futures.

Now the stages of decline that he maps out in the book hubris born of success;undisciplined pursuit of more; denial of risk and peril; grasping for salvation with aquick, big solution; and capitulation to irrelevance or death offer a kind of instantautopsy for an economy on the stretcher.

He writes that hes come to see institutional decline as a staged disease harder todetect but easier to cure in the early stages which is likely to foster a sense ofcorporate hypochondria in many readers.

He started working on his previous book, Good to Great: Why Some Companies Makethe Leap ... and Others Dont, in the mid-1990s, smack in the middle of New Economyfever.

Good to Great was finally published in late 2001 not long after the dot-com bubbleburst, the pixie dust surrounding visionary leaders had fallen away, and the 9/11 terroristattacks shook the country to its core. The book struck a chord with its back-to-basicsmessage: Quiet but determined leaders who remained focused on clear and simple goalswere the real success stories of corporate America.

It won a following, about four million copies worth, that extended well beyond thebusiness world and included football coaches, pastors and school principals.

We were really slow, and so it comes out right after everything is falling apart, Mr.Collins recalls. If we had come out in 1998, I dont think anyone would have read it.

His first best seller, Built to Last: Successful Habits of Visionary Companies, anotherfive-year project, which he co-wrote with Jerry I. Porras, came out in 1994, on the heels
http://topics.nytimes.com/top/news/business/companies/dow_jones_and_company_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/dow_jones_and_company_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/bear_stearns_companies/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/bear_stearns_companies/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/fannie_mae/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/fannie_mae/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/dow_jones_and_company_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/bear_stearns_companies/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/fannie_mae/index.html?inline=nyt-org


3/8

of the re-engineering craze in corporate America; it also went on to sell millions ofcopies.

And his next book, which he is writing with Morten T. Hansen and is due out in two orthree years, is about why certain companies manage to thrive through tumultuous times.

(Page 2 of 4)

I think its just pure luck, says Mr. Collins, parsing his track record in an interviewhere. You flip a coin and it comes up heads, and you flip a coin and it comes up heads,and you flip a coin and it comes up heads, and one day you have four heads in a row. Youcant really say you made it come up heads.

But its not all luck, of course.

PART of the Jim Collins method borrows from other hypersuccessful people. Heapproaches every aspect of his life with purpose and intensity.

Consider a few examples.

Four days after his first date with Joanne Ernst in the spring of 1980 an eight-mile runwhen both were students at Stanford they were engaged, and married later that year.

When she announced over breakfast one day that she thought she could win an IronmanTriathlon, Mr. Collins gave up his job atHewlett-Packardto help her train, be her roadieand negotiate her sponsorships with companies likeNike and Budweiser. Joanne won the1985 Hawaiian Ironman Triathlon.

Back then, he says, his wife was the better-known half of the couple, and everyoneassumed that his name was Jim Ernst.

For his 50th birthday his gift to myself, as he put it Mr. Collins, a lifelongclimber, trained for 18 months to try a climb El Capitan, the 3,000-foot vertical rockformation in Yosemite National Park.

Most climbers take a few days for the ascent. He wanted to do it in less than 24 hours. Sohe trained with a younger, stronger partner. He studied weather patterns at Yosemitegoing back almost 100 years to figure out the best window for an attempt. They climbedthe first 1,400 feet in the dark, and completed the ascent in 19 hours.

Oh, he sleeps with vigor, too. He figures that he needs to get 70 to 75 hours of sleepevery 10 days, and once went to a sleep lab to learn more about his own patterns. Now surprise, surprise he logs his time spent on a pillow, naps included, and monitors arolling average.
http://topics.nytimes.com/top/news/business/companies/hewlett_packard_corporation/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/hewlett_packard_corporation/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/hewlett_packard_corporation/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/nike_inc/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/hewlett_packard_corporation/index.html?inline=nyt-orghttp://topics.nytimes.com/top/news/business/companies/nike_inc/index.html?inline=nyt-org


4/8

If I start falling below that, he says, pointing to the short list on his whiteboard, I canstill teach and do other, but I cant create.

Mr. Hansen, his co-author on the current turbulence project, occasionally teases Mr.Collins about his relentless self-improvement.

I always laugh about the sleep log, he says.

Mr. Collins also is quite practiced at saying no. Requests pour in every week for him togive speeches to corporations and trade associations. It could be a bustling sideline, giventhat he commands a top-tier fee of $65,000 to dispense his wisdom. But he will give only18 speeches this year, and about a third of them will be pro bono for nonprofit groups.

Companies also ask him to consult. But he mostly declines, agreeing only if the companyintrigues him and if its executives come to Boulder to meet him. Over two half-daysessions, for $60,000, he will ask pointed questions and provide very few answers.

I am completely Socratic, he said, and I challenge and push; they come up with theirown answers. I couldnt come up with peoples answers.

Book tours? No. Splurging with the millions hes earned from his books? No, too.

He and his wife still live in the 2,500-square-foot Craftsman-style house they boughtwhen they moved back from California 14 years ago to Boulder, their hometown. Hekeeps his overhead low, with a staff of five people, and adds students for research workas needed.

This orientation a willingness to say no and focus on what not to do as much as whatto do stems from a conversation that Mr. Collins had with one of his mentors, the latePeter F. Drucker, the pioneer in social and management theories.

Do you want to build ideas first and foremost? he recalls Mr. Drucker asking him,trying to capture his mentors Austrian accent. Zen you must not build a bigorganization, because zen you will end up managing zat organization.

Therefore, in Jim Collinss world, small is beautiful.

We could have had a big consulting firm and training firm and it would have been a

huge lucrative machine, he says. But I want to answer the questions.

THOSE questions have a certain good-dumb flavor. Why do certain companies enjoyenduring success? How did some companies make the transition from good to great?Why do certain companies thrive in turbulent times?

(Page 3 of 4)


5/8

Whenever an intriguing question arises, usually spawned by a good conversation, Mr.Collins becomes obsessed with it. Like a wolf, it grabs me around the throat and it wontlet go, he says.

His new book, How the Mighty Fall, grew out of a discussion he led in the fall of 2004

at West Point, with 12 Army generals, 12 chief executives and 12 leaders of nonprofitorganizations.

Mr. Collins put this question on the table: Is America renewing its greatness, or isAmerica dangerously on the cusp of falling from great to good?

At a break, one C.E.O. pulled him aside and asked him a question that boiled down to,How would you know if your successful company is on a path to decline?

An article trying to answer that question grew into his current book. He looked for usefulmatched pairs similar companies whose performance clearly diverged at a certain

point.

Once he narrowed the field, he compiled decades of data and articles on each company tohelp explain what led to an inflection point, then kept sifting the data for patterns,divining theories from the data, and seeking out arguments to tell him why the theorieswere flawed.

Its roughly the same method hes used for all of his books.

Jim is a very interesting combination of things, said Mr. Porras, his co-author on Builtto Last who taught Mr. Collins many of the research techniques he uses today. Hes

amazingly creative, amazingly disciplined, amazingly thorough. He has strong opinionsabout things, but after a lot of arguments, he certainly would change his mind. A lot ofpeople who have strong opinions never really let go of them.

For each book, he hires a research team of university students, up to a dozen at a time, tohelp him during long summers of work. He is picky about whom he hires, typically fromStanford and the University of Colorado. Theyre not always business students; theymight be studying law or engineering or biochemistry.

He prefers to learn as much as he can about them before he meets them. Because if Imeet them, I may like them, and then all the assessment of the person is going to be

filtered by the fact that I like them, and what I really want to see is the quality of theirwork, he says.

So he will look at their transcripts. If they even have a small glitch in their academicrecord over the last year, they dont really get considered, he says. I need people whohave that just weird need to get everything right.
http://topics.nytimes.com/top/reference/timestopics/organizations/u/united_states_military_academy/index.html?inline=nyt-orghttp://topics.nytimes.com/top/reference/timestopics/organizations/u/university_of_colorado/index.html?inline=nyt-orghttp://topics.nytimes.com/top/reference/timestopics/organizations/u/united_states_military_academy/index.html?inline=nyt-orghttp://topics.nytimes.com/top/reference/timestopics/organizations/u/university_of_colorado/index.html?inline=nyt-org


6/8

He gives the candidates a list of different academic activities, including field work andlab work, and makes them rank the activities in order of preference, to give him a clearidea of their interests.

If they clear other hurdles, he will finally meet them in person. Hes looking for four

intangibles: smart, curious, willing to death-march (there has to be something in theirbackground that indicates that they just will die before they would fail to completesomething to perfection) and some spark of irreverence (because its in that fertileconversation of disagreement where the best ideas come, or at least the best ideas gettested).

So I look for somebody who on the one hand was an Eagle Scout, because thats death-marching, he explained. And, on the other hand, somebody who took time off to travelto 14 third-world countries on no money. One of his researchers, an M.B.A. student, hadstudied medieval literature at Princeton and served in the Marines.

The research on his books can cost up to $500,000. (For the first two, he was writingpersonal checks out of his and his wifes personal savings.) With the research complete,Mr. Collins retreats into cave mode for months and months, seven days a week aperiod when his wife says he is there, but not there.

He will read through every page of every binder thats been assembled, making notes thathe will then use for a first draft.

I call it monk mode, and I love monk mode, he says.

Writing is not so much fun painful, excruciating and brutal is how he describes

the process. Its not that hes after a certain lyricism. His writing is clear and unadorned.But it does feel as if every sentence has been pressure-tested and carefully calibrated sothat it doesnt go beyond what he can back with evidence from one of his binders.

It is slow going.

If Im going really, really fast, I can do a page of finished text a day, on average, hesays. A 36-page monograph he published, Good to Great and the Social Sectors, tookhim the better part of two years to write. It sold 400,000 copies.

(Page 4 of 4)

He then gets feedback from a large circle of people. To make sure they dont hold back,he refers to them as his critical readers, and types in large letters atop the manuscript,Bad First Draft.

That gives them the freedom to say, Jim already knows its bad, so let me tell him howits bad, he says.
http://topics.nytimes.com/top/reference/timestopics/organizations/m/us_marine_corps/index.html?inline=nyt-orghttp://topics.nytimes.com/top/reference/timestopics/organizations/m/us_marine_corps/index.html?inline=nyt-org


7/8

THE findings are by no means pure science everything does get filtered through Mr.Collinss brain, after all. And there are plenty of critics, taking issue with what they sayare generic and obvious points, based on research methods that are not as ironclad as theyappear.

Others have pointed out that some of the companies he held up as models in Good toGreat, including Fannie Mae and Circuit City, no longer look so good or great or, inthe case of Circuit City, are even in business.

On his Freakonomics blog, Steven D. Levitt wrote last year that the message of a booklike Good to Great is that the principles that these companies use not only have madethem good in the past, but position them for continued success. He added, To the extentthat this doesnt actually turn out to be true, it calls into question the basic premise ofthese books, doesnt it?

Mr. Collins takes issue with the criticism, even devoting a long passage in his new book

to defending Good to Great in light of the subsequent failures of some companies itpraised.

Just because a company falls doesnt invalidate what we can learn by studying thatcompany when it was at its historical best, he writes.

He says the merits of analyzing the reasons for a companys long winning streak or,for that matter, a sports teams are just as valid even if the company or team cantmaintain the winning formula. If people eat right and exercise, then stop doing so, itdoesnt make those habits any less valid, he writes.

Still, anyone looking for code-cracking formulas for success in business is going to bedisappointed by Mr. Collinss books and every other book, for that matter. What heoffers are provocative models for assessing why companies succeed and fail, supportedby research that fills dozens of boxes now stored in his basement.

He also has a deft touch with metaphors that enliven what might otherwise read like drycase studies flywheels and doom loops, hedgehogs and foxes, and a bus analogyborrowed from The Electric Kool-Aid Acid Test by Tom Wolfe.

VIGOROUS debates continue on blogs about the merits of Mr. Collinss books. One ofthe more thoughtful comments, on Business Pundit, says, The points in the Good to

Great book may seem very general, however youll be amazed that not many peopleunderstand general concepts like that things dont happen overnight or the importanceof facing facts.

Given that every company and industry is different, the books real value may be not somuch in the answers they provide, but in the questions they raise the kind that everycompany and manager should be asking.
http://freakonomics.blogs.nytimes.com/2008/07/28/from-good-to-great-to-below-average/http://topics.nytimes.com/top/reference/timestopics/people/w/tom_wolfe/index.html?inline=nyt-perhttp://www.businesspundit.com/why-good-to-great-isnt-very-good/http://freakonomics.blogs.nytimes.com/2008/07/28/from-good-to-great-to-below-average/http://topics.nytimes.com/top/reference/timestopics/people/w/tom_wolfe/index.html?inline=nyt-perhttp://www.businesspundit.com/why-good-to-great-isnt-very-good/


8/8

Mr. Collinss success has provided him with a financial cushion that allows him to searcharound, without worry, hoping to stumble upon more of those throat-grabbing wolves.Now, fortunately, I can probably spend the rest of my life picking any question I want to,regardless of whether it will be profitable, he says. I can just let my curiosity wanderunleashed.

END

successful habits of visionary companies

Documents