SHOW OUTLINE

INTRO 

• Build the right organisation

  • Origin of the book and HP

  • https://www.hpalumni.org/HPWayBooklet1980.pdf

CONTEXT AND INSIGHTS

• Drucker

  • How Collins and Drucker (and Sinek) all go beyond what you do (how and why) culture

• Have Strong Values 

  • Context and performance of built to last companies 

VISION

• Jerry Porras What's wrong?

  • The lack of vision in companies

• Jerry Porras The role vision plays

  • To endure, you must have a vision

    • Performance

    • Continuing To Make Difference

• Jerry Porras Common factors of vision

  • Vision guides strategy

  • Vision determines individual behaviour/culture

  • Vision should inspire

CLOSING CLIP

• First Who, Then What

  • Want to build a company that last? Here's where you start.

ABOUT THE BOOK

You can pick up Jim’s ‘Built to Last’ at all good outlets.

Drawing upon a six-year research project at the Stanford University Graduate School of Business, James C. Collins and Jerry I. Porras took eighteen truly exceptional and long-lasting companies and studied each in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day -- as start-ups, as midsize companies, and as large corporations. Throughout, the authors asked: "What makes the truly exceptional companies different from the comparison companies and what were the common practices these enduringly great companies followed throughout their history?"

Filled with hundreds of specific examples and organized into a coherent framework of practical concepts that can be applied by managers and entrepreneurs at all levels, Built to Last provides a master blueprint for building organizations that will prosper long into the 21st century and beyond.

TRANSCRIPT

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mike parsons 0:10

Hello, and welcome to the moon shots podcast. It's Episode 65. I'm your co host Mike Parsons. And as always, I'm joined by the man from Texas today. None other than Mr. Chad Owen Happy New Year.

Chad Owen 0:27

Happy New Year man I am recording in my home state of Texas. I've left Brooklyn, the cold of Brooklyn for the warmth and sunshine of Texas cannot say I'm missing that cold wintry weather one bit. I'm more excited to to be diving into another author series with you, Mike. Yeah, and

mike parsons 0:50

this week, we just wrapped up brand, a brand which was really a bit of a jump from the normal authors, topics and themes that we cover. And I thoroughly enjoyed that. So if any of our listeners are wondering what we're talking about with Brittany brown and didn't get a chance to listen to those shows, jump up on moonshots.io and go have a listen to her. But just when you thought we had done all the good authors, but could not possibly be another author to blow our mind. Well, you're all sadly wrong, Chad, because who do we meet? I

Chad Owen 1:28

have one for you, Mike, you have one. Chad. Come on. Tell us. If you have not read something by Jim Collins before you're in for a treat here because we've got three episodes coming at you, starting with today's which is profiling, his injury porous his book built to last. And I don't know about you, Mike. But the case studies in lessons learned from these books have informed so much of work and strategy and just even concept of what makes a good business. Since I first read it, probably, I want to say 1012 years ago.

mike parsons 2:10

Yeah, it is. The body of work from Jim is pretty amazing. Is it and Chad, do you notice how many people you've met through our work that have actually not only read Jim Collins, but the topics that he talks about? Come up continuously. He's almost Drucker esque in having coined, you know, the hedgehog concept. You know, Good to Great. Built to Last, like all of these ideas, come back to his really deep analytical academic work. I think he you know, he is sort of, he's right up there with the Drucker's the Christian since the cynics for me when I had a chance to read his book Good to Great many years ago. It was such a light bulb moment for me. How about you, Chad? What's been your experience with his work?

Chad Owen 3:06

What I love about his and Jerry and his whole team's approach to this work is if you've been a listener of this show for any amount of time, you know how Mike and I love to geek out about mental models, frameworks, etc. And my favourite part of Jim's work is it is so deeply rooted in the research that he doesn't just have a Eureka lightbulb moment in the shower. He pours through hundreds of years of data from these companies to identify the common factors that makes a company What's his phrase? extraordinary. I'm forgetting exactly what how he characterises the the bill to last companies but everything is rooted in the data for what makes a great company versus what makes a company that's not going to be around for very long Hmm.

mike parsons 4:01

And interestingly, was covering different topics both to Cal Newport and Brene Brown. All three of them, Jim included, have a bias towards this rigour to go research and understand the subject. So we have in this show we're going to cover built to last but subsequently, in the next two shows, we're going to cover Good to Great, perhaps his most famous work and great by choice. And it's our hope that for all of you who are listening, that you can take some huge, huge aha moments away. Now, if you're familiar with some of the work, then hopefully, it's a great recap.

But what we what we really want to do is remind people that there is so many powerful ideas that you can action, thoughts that can change your approach to building a company building a product or anything in between. And I just can't wait to dig into built to last because if you were to characterise the three books we're going to cover, you know, built to last is very much about what's the philosophy, what's, what's the culture of your organisation, great by choice is a book that's really all about the rigour and the practices, and the discipline to be great and good to great. It really deals with the human, the people and the culture side of what it takes to shift a business from just merely being good to being great. I can't wait to get stuck in Chad. I think this is just essential reading. Essential thinking for anyone who has to work with more than one person every day. Like if by proxy of your work. If you've got two people in the room, then you gotta read Jim Collins because it's going to help you

Chad Owen 5:54

Yeah, yeah, in. I think one of one of the things you can expect from from Mike and I is we profile these three books is whether you're an investor, an employee, that's, you know, vetting a potential company you want to work with if you're a founding team, and anyone and everyone in between all of the principles learned across these books will serve you very well. And it's Mike's and my job is to bring to the surface of some of the more interesting insights from these books. Before we dive in, to build to last, just wanted to remind everyone that this and all future episodes and all of our previous episodes can be found@moonshots.io. And Mike and I love getting the feedback from everyone through the forum on the website or emailing us at hello@moonshots.io. And just want to give a shout out to all of our new and first time listeners here in the fantastic year of 2020. We're excited to have you as a part of our audience here on moonshots.

mike parsons 7:00

Yeah, and I really want to point out to folks that if you if you see anything that you like in the world of book, an author, a visionary and entrepreneur and innovator, please reach out to us and tell us, give us your recommendations, your suggestions, your ideas and inspiration. But we have some listeners who are so committed to these adventures in innovation. I just want to thank Kerry, who actually was, you know, checking out moonshots.io and she even found buried away in an old episode, there was a typo one of the Shona and she took the time to give us a chance to carry Happy New Year to you, thank you for helping us clean up our act a little bit. And we encourage anyone and everyone to reach out to us give us feedback because it really makes us closer to you gives us a good sense of what everyone's after what everyone would like and gives us a little bit of inspiration along the way.

Chad Owen 8:04

We have a great introduction clip here where we get to learn not only the origins of the book, but one of the companies that was also part of the inspiration to start this long research and publishing career of gems. That's that's been so fruitful since I believe 1994, which was 25 going on 26 years ago. So here, here is how to build the right organisation. My own

Unknown Speaker 8:35

first encounter with Drucker's contribution. It really came through a research lens and my colleague Jerry porous and I were engaged in a research project at Stanford where we were trying to understand what separated truly enduring great companies from others over long periods of time and we were going back into historical archives. So for example of companies like Hewlett Packard and Merck and motor Roland Johnson and Johnson and General Electric and we were studying these companies over the long course of their evolution. And so you'd be going through boxes of archive material at places like HP and you actually have David Packard's original type written notes. From the very, very first meeting on August 23 1937, at 2pm.

In the afternoon, when he and Bill Hewlett got together to form Hewlett Packard By the way, there's a very interesting little side note on that very fun. They didn't know what they were going to make. I've always just loved they, they get together. So we decided to form a company in the radio electronics and electrical engineering field very broadly defined. And then it goes on to say the question of what we will design manufacture and sell however, was postponed. And this is the founding of the company, but if you think of it, it's it was a very Drucker like approach because what they essentially were saying is, our ultimate contribution or ultimate product is not going to be a calculator or oscillator.

It's going to be an organisation that has values and if we build the right organisation with values, it will do remarkable things but that is our creation, not a product, not a specific all that stuff changes. And as we started looking inside these organisations, we were studying them and I, I was not particularly familiar with Drucker's work as in depth I kept coming across these notes. And I kept picture like david packard standing up in the early form of the days of HP, waving your practice of management and giving a sermon to all of the people about what you're going to do if you go back and you look at the original statement of Hewlett Packard objectives, written by david packard, in 1957, before they went public, because he said we're going to have pressures of the markets if we go public. So what we have to do is we have to be very clear what we are before we hit that pressure, writes down what later became the basis of the HP way but was really What do you call these 10? objectives, objectives? Where's the word objectives come from? Right from Drucker, right? He writes them down. And if you read those 10 points

Unknown Speaker 11:09

they are straight out of the practice of management.

Unknown Speaker 11:13

Wow, I

mike parsons 11:14

don't you love one of the the greatest companies of the last century, the founders got together. And they said to themselves, we're going to build a great company together. And by the way, these two guys created something called the HP way. And I'm going to put a link in the show notes to this. This is all total Jim Collins, Simon Sinek kind of stuff. It's all about behaviour and culture. But Chad, Don't you just love the fact that like one of the greatest technology companies got together, founded the company and then they're like, Oh, and by the way, what's the product or who knows we'll defer that. We'll cover that in another meeting. Like that is so perfectly sums up built to last

Chad Owen 12:00

Yeah, it will. And it's interesting to you know, even just my interactions with you and how you're always speaking about the importance of teams when it comes to building great products and great cultures. Here we have an example in a company like HP that's it goes back, would you say to 1937, where they knew they wanted to make some electronics, but they had no idea exactly what we're going to hear even more about the importance of people over product in in further Eclipse here on on the show.

mike parsons 12:34

And let's let's just break this down a little bit. Because Chad and Mike love building a good product, don't get us wrong. But what we understand is, the way to build a great product is to build a great company, which comes down to the people the culture, how you behave with each other.

Chad Owen 12:56

Is everything right? The Interesting kind of metaphor for me is it's the founding team that's creating a company that will be the engine of innovation and creation of new products that in some ways it's not the founding teams primary goal to come up with the idea of the iPhone No, it's it's Steven Steve's job. Sorry for the pun there is there is the Steve's his jobs to come up with a company that can create not just a product like the iPhone, but the iMac, the iPod, the, you know, the countless innovations that have spun out of Apple since its inception in the 70s. And there's so many other examples of, of of companies that have had similar philosophies where, yes, they were maybe capitalising on a market opportunity and idea but the companies that have stood the test of time have proven that they can come out with continuous innovation and products that continue to delight customers.

mike parsons 13:59

Yes. So so let's zoom out a little bit and ask ourselves. So how does this built to last? philosophy fit in? How can we understand it? How can we decode it? It's essentially saying, Don't obsess about today, if you want to be great today, have an idea about what you want to do tomorrow. And tomorrow. And the future is about legacy and an engineering contribution to the world. If you have those things and those desires, that vision and and that commitment, you can build a great team and you can of course, then you could go off and build great products. That's what we're saying. So where this sort of integrates with other frameworks and thoughts is cynic is was really powerful. And don't forget to go to moonshots.io and check out all our scenic shows. But cynics says, look, people don't buy what you do. It's have the how and the why that matters so much. And that's dovetailing perfectly into this bill to last idea, focusing on why are we doing the things we do and how are we going to do them is such a big piece of success. And even if you go to Drucker Drucker has a lot of stuff around being rigorous, and being disciplined. But he also touches heavily upon what it takes to be a good manager, how to help others around you. And I think the great thing about Jim Collins is working in particular, what we're getting today is He is such a powerful, related thought leader in a similar space. I think what he's challenging us on with this book is, it is all going to come down if you want to have an engineering company built to last. It's all going to come down to how and why what is your culture because if you have those things in place, your get great people, you get great products and I think that's the gift, isn't it, Chad?

Chad Owen 16:04

Yeah. And, and, and Jim Collins and and Jerry horses in the Stanford teams work is in some ways a validation of the the framework and management practices of Peter Drucker. And he's saying it was because of Drucker's influence on the HP founders that they came up with their 10 objectives that would then transform into the HP way which forms the bedrock of that company's culture.

mike parsons 16:31

Mm hmm. So we've actually got this great clip of Colin speaking at the Drucker Institute, and he's sort of riffing here. So when he's referring to Drucker so much, he's he's actually drawing connectivity and connection and relationships between his work and jack. So let's have a listen to Jim Collins talking at the Drucker Institute.

Unknown Speaker 16:56

We tossed aside 225 titles and frustration our publisher was going nuts because we just kept vetoing all of our titles. Finally, I just blurted out one day, why don't we just name it Drucker was right. And we're done. We ended up calling it built to last, which of course,

Unknown Speaker 17:14

he wants.

Unknown Speaker 17:15

The interesting thing we're talking about this question of Drucker now more than ever. I don't believe that that is just a slogan in any way. It is an empirical fact from our research. This is not a perspective, it's not a philosophy. It is an empirical fact that if you look systematically at those that became great in contrast to those that do not and you look at those that were great that last at that fell, and you ask the question, two choices. Those that get those get in those that fall for a because they fail to learn the new stuff as it comes along. Or be Because they fail to implement with excellence the timeless principles we already know to be true.

Unknown Speaker 18:09

The answer is very clearly be.

Unknown Speaker 18:14

It is very hard to argue that the financial crisis we went through is because all of the financial institutions were adhering to fundamental style and

Unknown Speaker 18:25

disciplined management.

Chad Owen 18:27

I, I love the alternate title of director is right about you.

mike parsons 18:35

And I love his little dig there. Like you can't possibly tell us 2008 and Lehman Brothers, and all of that was because these guys were practising sound management approaches where I

Chad Owen 18:49

yeah, it's, it sounds too simple or too good to be true. But as he said, it's an empirical fact, you know, across the 1820 companies that are profiled In the book, most of them are around for 100 years. So they looked at 2000 years of business history and Drucker's principles were proven to be true. And so I'd be remiss if I didn't plug our episode on on Peter, but that's an addition to Simon. And then everyone asked her mentioning, you've got to go back and listen to our episode on on Peter Drucker. Yeah, and I think you can get much of the relationship to Jim Collins's work through the principles of management, which is kind of you know, Drucker's tome of management knowledge.

mike parsons 19:36

Mm hmm. And I think the way this all takes us is a timely reminder that a lot of these things may sound a little self evident. But if you've really and I'm going to borrow from Bernie brown here, but if you've been in the arena, you know how hard it is to consistently come back to them and do them in a discipline and rigour Way, and we can just get lost in the fog of war. And that's why revisiting this book together is so much fun for me, Chad. And I really hope that this is really starting to inspire some of our listeners. And coming up later in the show, we're going to go deep on what it takes to have the vision of an engineering company. And we'll actually get the chance to hear from Jerry porous, which is Jim's co author on built to last. And we have an absolute doozy of a clip, a highly caffeinated, Jim Collins, who's absolutely on fire. So that's all to come. But what I want to do right now together with you, Chad and our listeners is really put this into context. You actually mentioned the the companies that are on the built to last list these are companies that are like engineering top performing World Class. Some of them on the list include three m American Express, Disney, ge j&j, Philip Morris, Procter gamble, Sony, Walmart and a bunch of others. If you look at the list, Chad, who do you? Is there one there that stands above the moon? That is you're like,

Unknown Speaker 21:19

Wow,

mike parsons 21:20

that is the best example of an engineering built to last company.

Chad Owen 21:25

There's like the professional in me and then there's the outcome of the kid in me, it's really hard to overlook Disney, especially given what I think is huge wins on the part of getting Bob Iger into position to run the company and steward I think a whole new, you know, entrance into competing with the likes of Amazon and Netflix and, and others in terms of, you know, content production, streaming platforms, etc. And in the context of the clip, we just listened to, what is Disney do best and what is its core strength It is it's creating that delightful content that, you know, reminds us and takes us back to our childhood. They've continued to do that. But there's a blip in the in the 80s, early 90s. But they've done that and they have sustained. Yes, they've come out with new innovations in Disney plus being the most recent of them acquisition of of Lucasfilm and Marvel, etc. But as long as they can continue to create that content, like According to drecker, and Collins, they're going to be around

mike parsons 22:30

forever. Mm hmm. What's interesting is there's another company I mean, I love Disney for so many, both personal and professional reasons. I think Bob Bob Iger is great. I think where the company's at right now is pretty amazing. When you consider how displaced other studios have become Disney is way out in front. And you mentioned somebody that they've had their ups and downs. I think another interesting one on this list is Walmart. If you'd said to me 10 years ago, Walmart would be having a resurgence, like it is at this moment, it would have been hard to imagine everyone thought, oh, Amazon is displacing it. It's too big and clunky. But, you know, these guys, they have shown us that they are built to last

Unknown Speaker 23:23

company.

mike parsons 23:25

So I think it's really fascinating. If you look at all these companies, some of them are enjoying peaks, like Walmart and Disney. Others show signs of hope. I would say if I look at this, perhaps Ford p&g, but on the other hand, Boeing looks like it's in big trouble at the moment. IBM has been struggling for a while. But if you look at these principles, you wouldn't count them out. Would you know and you you'd be like, they could come back. They've been around. They've done

Chad Owen 23:56

this trick before, but what we should be looking for is maybe Not how are they taking best advantage of new innovations and trying to disrupt themselves? But are they executing on their core? on their core competencies and in business? In what made them so successful?

mike parsons 24:14

Yes. And I'm sure you'll probably Yeah. And I'm sure you'll find that they got off track and really got themselves in a bit of a bind. And I think what's what's, what's a really, really good opportunity now to do is to sort of wrap up on the sort of the context of built to last by Jim Collins. And let's, let's have a listen to him. Now talking about really about the role that strong values play in companies that really perform and are built to last.

Unknown Speaker 24:51

I mentioned earlier the work built to last. It was very interesting we were studying in during great companies, in contrast to others went back recently in real We selected the study set for that study in 1989. Two decades ago, all eight of the built last companies are still standalone, independent, and almost all of them very successful companies today. If you took a random sample of large publicly traded companies 20 years ago, what are the probabilities that all 18 and your random sample would be standalone independent and largely successful today? The number is less that the percentage is about point oh 2% probability. Not only that 15 of the 18 built to last companies lived through the 1930s depression.

Unknown Speaker 25:40

What did they teach us?

Unknown Speaker 25:42

What has enabled them to have that what did we find that separated them? And what we found is that what really separates them was not necessarily that they had smarter strategies, although they often did. Or that they were sort of more financially savvy, although they often were It was because they were founded first and foremost and built always on a rock solid set of core values that are not open for negotiation. And if you look at what gave them the reason to struggle, the reason to fight the reason to endure

Unknown Speaker 26:18

it wasn't strategic it was values.

Chad Owen 26:22

You know who I heard speaking just then it wasn't Jim Collins it was Simon Sinek you could almost replace his entire Golden Circle and why frame or Yeah, so interesting to me because Jim Collins owes Peter Drucker assignments and echoes Jim Collins and Peter Drucker it's it's a very interesting continuous line of thinking here. You're

mike parsons 26:49

going on a tangent for a second, can you believe that 15 of those companies survived the depression, like you and I and an almost all our listeners Were not even born in and these companies were surviving a depression that makes 2008 look like a walk in apoc.

Chad Owen 27:05

Well, yeah, and all these companies had had whether 2008 as well. There's there's only a couple on this list that you could say are no longer successful or wildly successful. businesses and maybe some are, are teetering. But again, these were picked 30 years ago. And so I'm sure that probability goes from point O two percentage point 00 something percent.

mike parsons 27:36

I think like, what what we can establish here before we get into how to how to really make vision work within an organisation is what we're seeing is they went and looked at thousands and thousands of years of data and found 18 companies that were built to last and as Jim Collins just sent it, came to values came down to culture. That's

Chad Owen 28:06

why they lasted because they had something worth fighting for. And again Said another way, people did business with them. Employees dedicated their work lives to them because they knew what their why and their purpose was not because they were making the best widgets.

mike parsons 28:25

Bingo. Bingo. That's so true.

Unknown Speaker 28:29

That's so true.

mike parsons 28:32

Okay, Chad. So I think we've whet our appetite, get a little bit into like how this looks and this is big mention of vision, because vision is the thing that drives culture. I think we might be ready to do a Segway in here, for the first time from Jerry porous, who is Jim's a co author on built to last. It's really interesting because we're going to hear a number of clips around vision. But what's really fascinating is how much you hear the word vision mentioned. But actually, my sense of it is, so many companies just don't really know. or believe in a vision. It's it's like a strap line and nothing, nothing more. And I think what we're going to hear here is that Jerry's gonna set that vision for us, so we can understand its true potential and its true. Meaning, are you Chad, are you ready to go deep in a world of vision?

Chad Owen 29:39

Yeah, it's, it's, we're gonna hear, you know, how things can go wrong inside of companies, not only if they don't have a vision, but the Okay, well, now what? We've got the vision, so how does that help us and what I love about these next three clips from Jerry's, he can take this esoteric idea of a company's vision And he boils it down into much more practical terms that you can enact and in measure inside of the company, which they had to do, because they were looking at these companies on paper, and how do you take this vision statement and see it in the financial statements in the business performance and the products they created, etc, etc. And so that's why I'm so excited about these insights that we get from Jim and Jerry as it as it pertains to vision. So we'll start with him about what's wrong today and companies losing are not using their vision properly.

Unknown Speaker 30:37

So what's happening? What's going on your managers develop visions for their organisations, they go to mountain top resorts or beachfront areas, and they spend a week developing a vision for their company. And then they come back and they have something You know, only satisfies a portion of all the things we wanted to do for us. So what's wrong? Are they done? I don't think so. They they not try hard. They try hard. Why don't they really know what's going on? And my answer is that they don't know what vision is. And that's what we discovered in the companies that we studied because I got tired of doing my song and dance because it wasn't very successful when managers would ask me what vision was. But if we went back to organisations and the data that we generated in our research, and we use this list, and we asked of our data, what were these companies doing that satisfied these components? one or more of these components on this list, and out of that analysis, Came chapter 11, which was the chapter we added to our book to describe what we think vision is.

mike parsons 32:10

Hmm. When you when you hear him talking about what's wrong with the world of business when we talk about vision, Chad, what examples come to mind when you when you hear him talking about that? Do you? How do you relate to that?

Chad Owen 32:26

I mean, I'll be honest, I struggle with it and myself, when it has come to businesses that I've been a part of, or been a leader in, I honestly struggle with the importance of the exercise, how to do it, how you know, you have something good. And, again, how do you when you have it, how do you follow it? And how do you know that you're living up to, to that vision? Yeah, and I think it's it's an interesting dilemma, because in some ways, I think it's the you know, the board and CEOs sole role and responsibility or accountability to be sure that the company is living up to that vision. But it can often be hard to measure the progress against that. Exactly.

mike parsons 33:13

And I think that's because it's just like a strap line on the bottom of a logo or something in an annual report. I think it's so detached from what they do and how they think. I think that's the great challenge of how vision has been treated. What's really cool is this next clip, Jerry talks about, well, what role should having a vision playing an organisation if you want to endure if you want to have legacy? So let's have a listen to Jerry Perez talking about the role of vision.

Unknown Speaker 33:48

Vision is really the core driver of enduring organisational greatness. That it's it's really difficult to become an during the Great Great over a long time period without having a clear vision of what it is that you're trying to do. So this is the driver of it. Now I keep using these words enduring greatness. And I'd like to define them more clearly for you, for me, and during greatness consists of two parts. One, its performance, and its long term performance. And its outstanding long term performance. So it's not just great performance for short periods of time. But for great performance for a long time period, when I say long time period, I'm talking 10, not 10 years, but 20 years, 30 years, 50 years. The companies we study were on average, 100 years old on the they didn't always perform at a great level for that hundred years, but they did for a vast majority of that period of time. So it's not just being a flash in the pan. It's being an enduring company that performs great over a long time period. So this is an important thing if you don't perform well, it's difficult to call you a great organisation. You know, you can be really jazzy and have all this appeal to it, etc, etc. But unless you perform well, you first of all, you're not gonna last all that long, but you don't really deserve in my opinion to be called an inherently great organisation. So performance is the first factor. The second factor is that the organisation has made a significant and I'd like to add in continuing contribution to the world. So you make a difference in the world. You help the world be a better, more effective place for people to live. So organisations that just make a lot of money, for example, but don't do the second part. Don't really qualify, in my opinion, to be called enduringly great organisations. And of the companies we studied, we studied 36 of them 18 them we call visionary companies in the other 18 were comparison set a matched comparison set, we found that the matched comparison performed quite well, financially. They performed very well over a very long time period. They lived, they lasted just as long as the visionary companies an average of 100 years. But they didn't make a substantial difference in the world, the way the visionary companies did, the visionary companies or companies, which you will all recognise today, we study them from the time they were created, and studied what they did throughout their entire history. So needless to say, we collected a lot of data on these companies. But we wanted to understand what did they do from the very time they were small and just beginning and what did they continue doing until today, where they're very large company, so they're Companies like three m, like IBM, Walt Disney, Hewlett Packard, Merck, Johnson, and Johnson. These are all companies whose names you recognise, and companies that have really made a difference in the world. As a final note about the differences in these companies, by the way, is it the visionary companies outperformed the marketplace by a factor of about 16 to one over 70 or 80. year period.

Unknown Speaker 37:33

Hmm,

Chad Owen 37:35

Chad Allen Dan, he really lays it down. Now we have to say one thing. We know that the clips Oh Jerry, they're a little bit longer than usual. But he Chad is laying down some serious wisdom right there. He's me. If I had to summarise it all, to be an endearingly great organisation that was that was the word I was looking For earlier in the show, in order to do that, I think it could be summed up by do good for the world and do well financially in the process, and that's, those are the two attributes that make you an enduringly great organisation. Now, that's easier said than done. But it's interesting that the do good for the world. They put as the primary and differentiating factor between the the control group of companies that fell off of the list and look in the 18 companies that made the bill to ask list.

mike parsons 38:39

Yeah, and and I'm going to steal a little motto that I've, I've heard a number of times, which is do well by doing good. I like that. Yeah. Doing well, by doing good. And I think the big thing that Jerry and Jim say is continuously

Unknown Speaker 39:00

Doing well

mike parsons 39:01

by performing at a high level and continually doing good not just once every now and then or when you've got a bit of extra profit continually doing well, by doing good. And Jerry is like,

Chad Owen 39:18

that's, that's what your vision has to support, inspire, bring alive. That's what it's all about how you going to do well, by doing good. And if you look at the list of 18 companies, I think where they're faulting or faltering it's, it's because they're not or they've lost the focus on the vision and the doing good.

mike parsons 39:42

I totally agree. Yeah,

Chad Owen 39:44

I totally. I'm not going to name names here. But you look at the list and I'm sure that you can see some of the list you're like, Oh, yeah, I've seen them in the news or Oh, yeah, I've heard about something that's been not going so well. And and I think it can be linked to their losing sight of the continually doing Good, and knowing that the doing well follows from that as a result of

mike parsons 40:07

doing good. And so I think, companies, what we've learned so far from Jerry, as it relates to vision inside of the book built to last, what we're learning is often vision doesn't play any really meaningful role in the company. It's, it's there, it's on the annual report. That's it. But what he's saying, is it that the vision really must, the vision can play a massive role in supporting you becoming an enduring long term company with a massive legacy. And it says that there is a direct correlation between the vision, supporting and enabling doing well, by performing and doing good I continue to making a difference. And we don't have to like get to airy fairy Doing good. Doing good can be making good honest products that work well that get a job done that a fair and equitable in how they deal with customers, and that do every think, and then means to do the right thing. So it's not like, Hey, you have to be a certified B Corp. But it's the intention between like taking care of a customer when they've got a challenge.

Chad Owen 41:27

I think it's as simple as just delivering on the promise that you're making. That's how much better way Yeah, that's much better, you know, saying, yeah, it can, it can be a marketing statement, it can be a conversation you're having with a customer can be a brand promise and whatever it is, just simply live up to that. And I think that's kind of the bare minimum of doing good. You know, sure you and I and many others are interested in, in maybe being a little more helpful to Mother Earth or, you know, social causes, but at the very least, just live up to the promise that you're making. The customer and

mike parsons 41:59

thing That has come our way several times. Easy to say hard to do. But the good thing is, this last clip we've got coming up from Jerry starts to give us a hint, a suggestion, a nod towards, well, what's a good vision? How does it behave? What does it do? So, let's listen to Jerry porras, talking about some of the common factors of a vision from a company that is built to last.

Unknown Speaker 42:30

Over time, I started looking at what were the common terms are the common factors that existed across these various lists. And I came up with this list, which is a consolidated version of what it is that I heard from these managers. So they would tell me Well, look, vision should be a framework for strategy. That's what it do for an organisation. It ought to guide the way we develop our strategy and what our straight adeje contains, that sounded reasonable. But then another common theme was well vision should be a guide for individual behaviour without a help tell our employees and our managers what they ought to do and what they shouldn't do. So it guides them through time and through very complicated environments. Vision should be a source of inspiration for people. You don't want to make them want to be a part of our organisation, because we're doing stuff that they really are excited about so inspires them to join us in that quest. Vision should be the basis for the culture of our organisation. It ought to help form the norms that exist in our organisation and guide individuals in what they do. Vision should guide the organization's a compass to guide the organisation over a long time period. It ought to help us kind of know which direction we're going, but not just today, not just tomorrow or a year from now, but other Long time period. So it's the compass that kind of keeps us going in the right direction. Vision should be the glue that holds our organisation together, we're all held together by this common vision that we all want to accomplish the same thing together. Vision should be a source of our identity. Who are we? What makes us special? What makes us unique vision should help us play that role. Vision should motivate action on the part of our employees and on the part of the whole organisation.

Unknown Speaker 44:34

It ought to get help us get things done.

Unknown Speaker 44:38

Well, you look look at this list.

Unknown Speaker 44:41

Look at this list. It's kind of an overwhelming list. Especially if some of you are in organisation or an organisation that has a vision. Let me ask you that question. How many of you are part of an organisation that you think has a vision that you understand Can you raise your hand

Unknown Speaker 45:00

Okay, okay, a goodly number of you.

Unknown Speaker 45:04

Now look at this list.

Unknown Speaker 45:08

And be honest with yourself, you don't have to share your information. But be honest with yourself and ask yourself, how many of these requirements for vision does your organization's vision satisfy?

Chad Owen 45:23

Yeah, it's probably not many is it? Hmm.

mike parsons 45:27

He's offering a bit of a bit of a challenge in that. So while that seems in, what I find really interesting is from a top down approach, Jerry saying your vision should drive strategy, but from a very bottom up perspective, it should drive individual behaviour. Now, once you just get into that thought, like, okay, our vision for the kind of company that we want to be, should give us inspiration for how to think about strategically where we're going, but also how I behave in this very meeting. Hi That as soon as you put that into context, that's where you finally go. Oh, now I get how a vision should work.

Chad Owen 46:08

I thought it was just you know, like a statement that I spent my week on the beach writing and then plastering on all the walls right like that's that's the vision right a vision statement It's like my one sentence visions team. Yes, Chad if that's if that's what you want it to be. He might have a bad face face some challenges, but hey, you're paradoxical. Yeah, you're paradoxical perspective. It was the first and second things he said. It's like it is not only driving all the strategy inside of the organisation, it's, it's determining how you interact with your colleagues in the hallways and in meetings. And I think that's precisely why it's such a vexing concept for so many people. And we think we have done it right when we craft our perfectly wordsmith flowery poetic vision statement, but That's not everything that a vision should be.

mike parsons 47:04

Yeah. And I think the the call to arms now is everyone listening to the show right now should ask themselves Oh damn, let's go back and check out company's vision, if we know where it is.

Chad Owen 47:20

How does this support us doing well by doing good? How is this inspiring our strategy and our individual behaviour and if there's any gaps there, go fill them in people. And I love this idea, or I don't know if it's really been explicitly stated but in take HP as an example, Hewlett and Packard they wrote the 10 objectives at the very founding of the company, and it became the HP way which you can google and find the current 2020 iteration of that. Probably with few too little change If we compare the two, yes, and yeah, and I think that card and stone commitment that you're making is the company that drives both the strategy and the behaviour that's important. So it's not just that it's driving the strategy and behaviour it's also that this is something that does not change over time. And it is the the crown jewels, if you will, of the entire organisation that will be protected at all costs, you know, when the nuclear fallout hits it's it's it's been dropped down into the iron vault to be encased forever in security sort of thing.

mike parsons 48:39

Yeah. I yeah, yeah. So so so, Chad, I think we've got step number one of building a build to last company, you know, a company that's culture first starts with having a vision that helps us do well by doing good before we Take our last clip, I just want to remind our audience, anything and everything about the show, you can find it moonshots.io. And in particular, I want to send a big thank you. Actually, both Chad and I really grateful for all the people that have been reviewing the show and writing the show in iTunes in Google Play. We're literally I think 30 or 40 people now have done it. It's so important. Jump into your little pod catcher. podcast app, give us a rating. If you want us to improve anything, just send us a note Hello adventures.io really helpful for us because other people can discover us the more people that give us a thumbs up. So big thank you to one and all

Chad Owen 49:45

here and I've been playing around with some of the tracking statistics, everything for the show. Just some fun things. We've been rising the ranks of some of the International charts, becoming a The sixth most popular business podcast in Iceland. So thank you to our listeners in Iceland. And jumping up to number number 39 in Panama. So those are just some some fun statistics to see and knowing that we have listeners all across the world, Philippines, Colombia, Ghana, and Tunisia and everywhere in between.

mike parsons 50:23

That's, that's crazy. That is the that is so so cool. Chad. So come on you ghanians tell us who you want us to cover in the next series on the moon shots. podcast. Alright, so Chad, we need to head to the world of Jim Collins and it's a little bit of a Segway clip but we have I think potentially left the best to last. You want to set up this this closing clip.

Chad Owen 50:57

It is a rallying cry and And it goes all the way back to one of the, I think even the first clip that we played here, when it went back into to talk about Hewlett and Packard as they were founding the company, they just knew that they wanted to work together to work in this industry and space, they didn't even have a product idea. And the very that interesting insight is repeated in many of the other foundings of these other companies. And what we'll hear from Jim is the importance of not the business idea, but the people that are committing themselves to start this business. And this great principle that he's going to reiterate over and over again until it's seared in our brains of Think, think first who and then what,

Unknown Speaker 51:52

when did Cooley became chief executive of Wells Fargo in the late 1970s. He knew he would be facing the storm of deregulation. He knew that the entire banking industry would be upended when deregulation swept through the board understandably concerned, asked coolly, what is your vision? What is your strategy? Where will you lead us? How will you get us through the storm of deregulation? And Cooley had a wonderful answer. I don't know. Not only that, it's the wrong question. See, I am not going to first figure out where to drive this bus and then get people on the bus. No, I'm going to do it completely opposite. I am not going to figure out where to drive the bus until I've got the right people on the bus. And only once I've got the right people on the bus, the wrong people off the bus and the right people on the key seats. Then and only then will I turn my attention to the question of where we will drive this bus. The best executives we've studied. Always think first, about who and then about what it's not about. Just getting a great team. It's not about finding talent. It's not about getting great people. No, the key word is first. First get right people. First get the people on the bus. first think about who put who have the head of strategy, who ahead of tactics, who ahead of technology, who hit a business ideas, who ahead of everything. First, who, first. Who, first, who then what

Unknown Speaker 53:27

do you reckon we should

Unknown Speaker 53:29

do? What comes first, first or

Unknown Speaker 53:32

second first ad.

mike parsons 53:37

My gosh, he was just on fire right there. And I

Unknown Speaker 53:43

just, I love it.

mike parsons 53:46

I love it. It's so clear. It's so clear. And you can hear the conviction that he has from all the research. It's all if you really want to make that vision, rock and roll. Don't sit in ivory tower, get the right people around the table. I mean, that is the call to action, isn't it?

Chad Owen 54:05

admonition of first, who then what? If you can't remember that? Then just think of the visual metaphor of the right people on the bus first, then you choose the destination. I think it makes it very clear. Yeah. Yeah, too. If you believe that you're not on track to to be an enduring, great company, that you have to turn inwards. Look at your team and figure out yet do I have the right people on this bus? And if not, you should make some changes.

mike parsons 54:37

Yeah, yeah. And get the right people in the room and ask yourselves together. Why are we here? Like, why are we all here? And how do we want to get the job done? You know, how do we want to talk to each other? How do we want to support each other? inspiring stuff, right? It's so inspiring. Like when you crack this open? Oh my gosh,

Chad Owen 54:56

yeah. I'm really excited in how all of the learning And insights from this book and this, this show, go right into the next one, which is good to great, I think built to last sent a million or 2 million copies good grades, I don't know it's probably sold 30 4050 million. So go out, buy the book, read it before the show. And and you can meet us on the next show. And when we break down a different list of companies that had kind of had some middling performance and then broke out relative to their peers, and again, we will see the determining factors for what made them different. So we saw that it wasn't just long term financial performance that made companies built to last but it was making a difference in the world that doing good.

mike parsons 55:49

Such a Yeah, such a good summary Chad that is so what we can take from this book. And the good news is we got two more coming The next one is going to be good to great. So Get ready for like a get ready for more bus analogies is probably the best way to talk about Good to Great and hedgehogs. And then after that we're going to go into into the choice episode. And that's all going to be about what incredible discipline books like inside of a company. And I can't tell you what joy it brings me to talk about these things. I'm just so into this stuff, Chad. It's so great. And I think we've kicked off another great, another great series, and it's just amazes me how each author has that we're picking just has so much to offer.

Chad Owen 56:37

Yeah, I always say this mic, but I feel like we could record this show in perpetuity to infinity. There's no lack of inspiring and interesting and insightful people for us to profile. So yeah, I'm really glad that we're diving into yet another author providing far too many insights for us to pack into just an hour long episodes. That's why we're not bringing you one episode on Jim Collins. But three

mike parsons 57:05

Yeah, great stuff. Well, Chad thank you to you. It's such a great new turn in the moonshots journey. Our adventures in innovation this Jim Collins series is awesome I'm totally fired up and can't wait for the next show on Good to Great I believe your your after we stopped recording the show you you might be putting on those running shoes. Is this true?

Chad Owen 57:30

Yeah, May May 2020 resolution is to complete a half Iron Man with my brother. So I've got over a mile swim 55 mile bike ride and 13.2 miles in my future Come come late June this year. So I've got to get my my my miles of running in if I'm going to be able to keep up with the likes of my eight years younger brother, so I'll be hitting the trails.

mike parsons 58:00

Yeah, well, I'll be travelling with my elastic resistance bands as I head off to Europe in a couple of days. So like you I'm full of New Year's vigour. Let's let's keep each other accountable. Let's keep it going. Thank you to you, Chad. Thank you to our listeners for joining us on this adventure into the world of Jim Collins. I hope you're enjoying it as much as Chad and I, and a whole brand new year of 2020 for the moonshots podcast, everything it has to bring. I know I know. So, thank you to everyone. That's a wrap of the main shots podcast.

Transcribed by https://otter.ai