This is a summary of four books by Jim Collins .. “BUILT TO LAST”, “GOOD TO GREAT”, “HOW THE MIGHTY FALL” and “GREAT BY CHOICE” ..

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LESSONS LEARNED FROM
VISIONARY COMPANIES
Riri Satria
CEO – Value Alignment Advisory
http://about.me/ririsatria

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What are we going to discuss?
• What are the principles of visionary companies?
• How to lead the company towards visionary one?
• How to lead sustainable visionary company?
• What is the leadership style of visionary companies?

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Part 1 : Lessons from
visionary companies
This first part is adopted from the book “BUILT TO
LAST” by Jim Collins and Jerry Porras.
This is a result of years of empirical research. They took
a look at 18 well known, well established and healthy
companies ('visionaries'), and analyzed all the
information they could get their hands on, compiled it,
and looked at it to try to find patterns of the visionary
companies.
The result of all of this is a set of guidelines and
principles that all companies, large or growing, can use
to keep themselves growing, strong, and ahead of the
competition.

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Lessons from visionary companies
(lesson #1)
Empirical research from visionary companies teach us that
it doesn’t take a great idea to start a great company. Only
few of the visionary companies began life with a great
idea. In fact, some began life without any specific idea
and a few even began with outright failures.
Great ideas are important, but EXECUTION is the key.

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Lessons from visionary companies
(lesson #2)
Some of the most significant CEO in the history of visionary
companies did not fit the model of high profile and charismatic
leader.
But empirical research from visionary companies teach us that
great leaders sought to be clock builders, not time tellers.
Great leaders BUILT OTHER PEOPLE, not built themselves.

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Lessons from visionary companies
(lesson #3)
Empirical research from visionary companies teach us that
they pursue profit as one of the cluster of objectives, not
the only one, and not the primary one. Yes, they seek
profits, but they are equally guided by a core ideology.
Built CORPORATE IDEOLOGY / CORE VALUES first,
and this will lead us to profit.

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Lessons from visionary companies
(lesson #4)
Empirical research from visionary companies teach us that here is
no “right” set of core values for being a visionary company. Indeed,
companies that have radically different ideologies can be visionary.
The crucial variable is not the content of the company’s ideology,
but how deeply it believes its ideology, and how consistent it is.
Whatever your corporate ideology / core values are, make sure that
the people INTERNALIZE THE IDEOLOGY / VALUE.

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Lessons from visionary companies
(lesson #5)
Empirical research from visionary companies teach us that they
manage yin-yang. They preserve the core, yet drive for progress.
They almost religiously preserves its core ideology, and changing
it seldom, if ever.
Change is necessary for business sustainable, but DON’T
CHANGE IDEOLOGY / CORE VALUES quite often. This is the
spirit of your company, or maybe your life.

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Lessons from visionary companies
(lesson #6)
Empirical research from visionary companies teach us that they set
big, hairy, and, audacious goals (BHAGs). Like climbing a big
mountain or going to the moon, a BHAG may be daunting or
perhaps risky, but the adventure, excitement, and challenge of it
grabs people in the gut, create immense forward momentum.
Business needs PASSIONS and CALCULATED-RISK
PLAYERS, not safety players.

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Lessons from visionary companies
(lesson #7)
Empirical research from visionary companies teach us that they are not
great places to work for everyone. Only those who “fit” extremely well
with the core ideology and demanding standards of a visionary company
will find a great place to work.
Visionary companies are so clear about what they stand for and what they
are trying to achieve that they simply don’t have room for those unwilling
or unable to fit their exacting standards.
Business needs HIGHT TALENTED PEOPLE.

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Lessons from visionary companies
(lesson #8)
Empirical research from visionary companies teach us
that they make some of their moves by trial and error,
opportunism, and quite literally - accidents.
Don’t be afraid to INNOVATE, failure is just a
learning process. If your never fail, it means that your
never did something big.

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Lessons from visionary companies
(lesson #9)
Empirical research from visionary companies teach us that that
home-grown management rules at the visionary companies to a
far greater degree. In 1700 years of combined life spans across
the visionary companies, research found only 4 individual
incidents of going outside for a CEO – and those in only 2
companies!
INTERNAL PEOPLE DEVELOPMENT and EMPOWERENT
is the key.

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Lessons from visionary companies
(lesson #10)
Empirical research from visionary companies teach us that
they focus primarily on beating themselves, not the
competition! No matter how much they achieve, no matter
how far in front of their competitors they pull, they never think
they have done “good enough”.
CONTINUOUS IMPROVEMENT is a must, although you
already become market / industry leader.

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Lessons from visionary companies
(lesson #11)
Empirical research from visionary companies teach us that
they reject themselves trapped in choices. They reject
having to make a choice between stability or progress,
making money or living with values, etc.
They GENIUSLY EMBRACE THE PARADOXIAL
VIEW that allows them pursue both choices and gain
benefits at the same time.

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Lessons from visionary companies
(lesson #12)
Empirical research from visionary companies teach us that they attained
their stature not so much because they made visionary pronouncements
(although the often did make such pronouncements).
Nor did they rise to greatness because they wrote one of the vision, values,
purpose, mission, or aspiration statements that have become popular in
management today. It is only one of thousands steps in a never ending
process of expressing the fundamental characteristics.
Vision and mission are important, but EXECUTION is the key.

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12 lessons from visionary companies (summary)
1. They think ideas are important, but belief that execution is the key.
2. Their leaders built other people, not built themselves (the leaders’ image).
3. They have a strong corporate ideology / core values.
4. Their people internalize the ideology / core values.
5. They don’t change ideology / core values quite often.
6. They have calculated-risk players with passions.
7. They have high talented people.
8. They set a wide space for innovation and failure is a learning process.
9. They promote, empower, and develop people internally.
10. The always do continuous improvements although already become market leader.
11. They do not trap in paradoxial thinking.
12. They think vision and mission are important, but belief that execution is the key.

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Part 2 : How to lead
company to become
visionary one?
This second part is adopted from the book “GOOD TO
GREAT” the second book by Jim Collins, following the
first one “BUILT TO LAST”.
This book is an empirical research that describe how
companies transition from being average companies to
great or visionary companies. "Greatness" is defined as
financial performance several multiples better than the
market average over a sustained period of time.
Collins finds the main factor for achieving the transition
to be a narrow focusing of the company’s resources on
their field of competence.

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What is inside
this black box
?Good results
Great results
From GOOD results to GREAT results …
Some companies could make a quantum leap. The could
transform themselves radically to achieve high performance in
their business. What are they doing anyway?

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Build up
Breakthrough
Discipline People Discipline Though Discipline Actions
Level 5
Leadeship
First Who …
Then What
Confront the
brutal facts,
never lost faith
Hedgehog
Concept
Culture of
discipline
Technology
accelerators
The wheel of execution
From GOOD results to GREAT results …

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Breakthrough action #1 : Level 5 Leadership
LEVEL 5 : Builds enduring greatness through a paradoxial blend of
PERSONAL HUMILITY and PROFESSIONAL WILL.
LEVEL 4 : Effective leader : catalyzes commitment to and vigorous pursuit
of a clear and compelling vision, stimulating higher performance standards.
LEVEL 3 : Competent manager : organizes people and resources toward the
effective and efficient pursuit of predetermined objectives.
LEVEL 2 : Contributing team member : contributes individual capabilities
to the achievement of group objectives and works effectively with others in a
group setting.
LEVEL 1 : Highly capable individual : make productive contributions
through talent, knowledge, skills, and good work habits.

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Breakthrough action #2 : First Who … Then What
Empirical research shows that only talented people could
create and execute strategy and gain excellent result.
They PUT-OFF YOUR LOW PERFORMERS AND PUT
ON THE TALENTED PEOPLE (WHO). If you keep your
low performers, then it means you keep problems in the
company. After that, you can think about the BUSINESS
(WHAT)

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Breakthrough action #3 : Confront the brutal facts
…
• Brutal facts are PROBEMS.
• They should be FIXED and SOLVED.
• Find reasons for problems do not solved anything.
So, confront the brutal facts by focusing on
PROBLEM SOLVING rather than finding the
reasons for any legitimation.

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What you are deeply
passionate about ?
What drives
your economic
engine ?
What you can be
the best in the
world at ?
BHAG
Breakthrough action #4 : Hedgehog Concept
Great companies only run
business where they can
be the nest in that field, it is
an economic engine, and
they have passion for that.
It doesn’t mean you should
focus on a single business,
but please make sure that
you have big, hairy, and
audacious goals (BHAG) in
every business that you are
in.

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ETHICS OF ENTREPRENEURSHIP
CULTUREOFDISCIPLINE
Low High
Low
High
Hierarchical
organization
Bureaucratic
organization
Great
organization
Start-up
organization
Breakthrough action #5 : Culture of Discipline
Culture of discipline means that organization should discipline with their
own business strategy, and they become a strategy-focused
organization, each movement should be in the strategy corridor.

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Breakthrough action #6 : Technology
accelerators
BUSINESS STRATEGYBUSINESS STRATEGY
TECHNOLOGY
INVESTMENT
TECHNOLOGY
INVESTMENT
Technology investment guided
by business needs and aligned
to business strategy of the firm.
Use technology to accelerate
your business development and
operation.

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Breakthrough action #7 : Wheel of execution
- Focus on execution.
- Always do continuous improvements.
- Evaluate the performance periodically.
- Fixed the problems as soon as
possible.

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Part 3 : How to lead a
sustainable visionary
company?
This third part is adopted from the book “HOW THE
MIGHTY FALL” the third book by Jim Collins, following
the first one “BUILT TO LAST” and the second one
“GOOD TO GREAT”.
In contrast to Jim Collins' previous books, Good to
Great and Built to Last, which examined corporate
ascent, the newly published How The Mighty Fall
focuses on corporate decline.
Data about the 11 "fallen" companies came from the
Good to Great and Built to Last archives as well as from
updated research.

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Five steps to the death of mighty companies

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Death step # 1 : hubris born of success
The company’s people become ARROGANT,
regarding success as virtually an entitlement.
Are they really success?
What are the indicators of success?
Real success vs virtual success?

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Death step # 2 : undiscipline pursuit of more …
… more scale, more growth, more acclaim.
Companies stray from the disciplined creativity that
led them to greatness in the first place, making
undisciplined leaps into areas where they cannot be
great or growing faster than they can achieve with
excellence, or both.
GREEDY STRATEGY

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Death step # 3 : denial of risk and peril
Leaders of the company discount negative data,
amplify positive data and put a positive spin on
ambiguous data  DATA MANIPULATION
Those in power start to blame external factors for
setbacks rather than accept responsibility.
 BLAMING OTHERS

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Death step # 4 : grasping for salvation
Common “saviors” include a charismatic visionary
leader, a bold but untested strategy, a radical
transformation, a “game changing” acquisition or
any number of other silver-bullet solutions.
PANIC MOVEMENTS

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Death step # 5 : capitulation to irrelevant of death
Accumulative setbacks and expensive false starts
erode financial strength and individual spirits to such
an extent that leaders abandon all hope of building a
great future.
In some cases their leaders just sell out. In other cases
the institution atrophies to utter insignificance.
LOST STRENGTH AND SPIRIT

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Summary : things to remember to lead
sustainable visionary company
• Never be an arrogant company.
• Never develop a greedy strategy / expansion.
• Never do any data manipulations for pragmatic issues.
• Never blaming on external factors.
• Never do panic movements
• Never lost strength and spirits.

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Part 4 : What is the
leadership style of a
visionary company?
This fourth part is adopted from the book “GREAT BY
CHOICE” the fourth book by Jim Collins, following the
first one “BUILT TO LAST”, the second one “GOOD TO
GREAT”, and the third one “HOW THE MIGHTY FALL”.
In contrast to Jim Collins' previous books, Good to
Great and Built to Last, which examined corporate
ascent, the newly published How The Mighty Fall
focuses on corporate decline.
Data about the 11 "fallen" companies came from the
Good to Great and Built to Last archives as well as from
updated research.

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The Leadership Style

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Level 5 ambition : “incredibly ambitious, but
their ambition is first and foremost for the
institution and its greatness, not for
themselves“
Level 5 Ambition

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Closing Remarks

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Closing Remarks
• Jim Collins teach us that :
– There are 12 principles of visionary company.
– There are 7 breakthrough actions towards visionary company.
– There are 6 things to avoid to lead sustainable visionary company.
– There are 4 leadership style of visionary company.

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THANK YOU