Built to Last vs Able to Adapt

There was, oh not so long ago, a book about the search for excellence - in fact it was called In Search of Excellence by Tom Peters et al.  Then, another book came along entitled Built to Last, which looked at the core principles of firms that have succeeded in the market.  Both books look at successful organizations and the management techniques and cultural attitudes that got them to where they are today.

It seems to me that this is interesting but somewhat irrelevant.  As a speaker I heard speak recently said, we as managers are constantly running to the last paradigm.  Just as the US Army has a hard time giving up the idea that it must fight a large land war rather than small guerilla battles, managers often look at firms that are successful now and wonder if they can transfer the thinking of those firms AS IT EXISTS TODAY and implement that thinking and be successful down the road.  This is last paradigm thinking.  By the time you adopt the seemingly successful paradigm, the market has already begun to change.

In Built to Last Jim Collins looked at firms that had been successful for at least 50 years.  The question is - what does success over those 50 years have to do with building a successful firm right now and the conditions we'll face over the next 5 years.  So much has changed in that time frame, as attention spans and market cycles have shortened and the amount of global competition has increased.  So, rather than Built to Last, I'd like to recommend a new mantra - Able to Adapt.

Yes, I know all of you Collins and Peters fans will be hounding me about the fact that neither Collins nor Peters recommends standing still and resting on laurels.  However, rather than study 3M or Proctor&Gamble or TI, we should be looking at YouTube or RedHat and trying to understand why they are successful now, and what the next unexpected new business opportunity will look like.  Today even looking at RedHat and YouTube may be too late if all you are going to do is mimic the business model.  Something else is coming just around the corner - we just haven't seen it yet.

There are some things that all good businesses have in common - a strong corporate culture, a willingness to question the status quo, intimacy with customers and a well-defined strategy.  What most firms need to add is the ability to quickly reconfigure themselves and become very adaptable, and the capability to traverse to a new business model as they arise.  Is it reasonable to say that YouTube's purchase by Google doesn't make economic sense, or is it possible that there is some new value proposition Google has identified we haven't seen yet?  Even if it fails, it's hard to argue with Google's financial success and YouTube's subscriber success.

Recently we've been working with firms that have taken over a year to decide whether or not to start a new initiative.  I'm not sure if in hindsight this will prove to be exceptionally wise or just plain sloth.  In an environment where competition is rapidly increasing and your competitor may be anywhere and everywhere, the ability to Adapt to rapidly changing requirements of the market is what will make a firm last.  A corporate strategy that adopts some of the good thinking from In Search of Excellence and Built to Last, but which embodies the ability to change its business model and organizational structure and adapt to changing business markets and climate will be the one that succeeds in the long run.

Comments

[Charles H. Green]

Good posting. There are many things to be said about this topic, but one is that "Built to Last" is probably not an obviously good criterion.
If the definition of "good" or "great" companies is merely surival, then the door is open to a lot of companies aren't intended. For example, the old McCrory's Five and Dime stores lasted over 100 years, basically by being very locally driven and getting by. By any normal measure of success, they weren't; they paid low wages, were dingy places, werent all that profitable. But by golly, they did last. 100 years in the retail business is impressive. But probably not what is meant by Collins' title.
But the point isn't to pick on Collins, who of course followed it up with a really good book. My point is to suggest that the criterion for "best" is not all that obvious. And among the assumptions that we should challenge is the one that assumes the continued exisence of a particular corporate entity.
What if the "best" companies were those which invented great products, delivered value to consumers, paid great returns to investors, delivered a great workplace to employees--and then disappeared, whether by acquisition or implosion or any other reason. Should disappearance disqualify a company for inclusion? Why should a corporate entity have to continue in a particular form in order to make someone's best list?
I don't think "lasting" is anywhere near the most important criterion for inclusion on a superlatives list.
And if it's not, then what should be further up on the list?

[Jim Voris]

Sloth is a virtue for sloths -- meaning if the niche selects for sloth, then that's what will survive. In a market niche that is not very dynamic, or shielded from competition, a company can survive for a long time -- making it look like management is doing a good job. The company is 'built to last' because it occupies a backwater market segment that no one else wants (or it has some kind of monopoly protection from the government (the old At&T for example)). For companies in more dynamic markets, they can survive in the long term only by embracing change as one of their core values. I think Kevin Kelly summarized it simply in a different context in his "Out of Control" book -- evolution selects for those that are good at evolving.