Building Your Companys Vision by Collins and Porras - Article Example

Name: xxxxxxxxxxxxx Course: xxxxxxxxxxxxx Institution: xxxxxxxxxxxxx Title: Article Analysis: Collins, J & Porras, J 1996, ‘Building Your Company’s Vision’, Harvard Business Review, September-October, pp 65-77. Date: xxxxxxxxxxxxx Article Analysis: Collins, J & Porras, J 1996, ‘Building Your Company’s Vision’, Harvard Business Review, September-October, pp 65-77. Introduction The article by Collins and Porras (1996) provides an explanation of the two major components of a successful company’s vision as inferred from their study of successful companies such as Nordstrom, Merck, Hewlett Packard, 3M, Sony, Ford, Motorola, Procter and Gamble, Johnson and Johnson and Boeing. Collins and Porras attempt to demonstrate how these companies’ PROGRESS, long term successes and superior performance can be attributed to their ability to adapt to a changing business environment (or world) while maintaining their core ideology in terms of core values or principles and core purpose. Therefore, the underlying implication for managing business growth according to Collins and Porras (1996) is that the dynamic of visionary companies is preserving the core while simultaneously stimulating progress. Summary of Key Points The article has several key points which contain important lessons for entrepreneurs or aspiring entrepreneurs who are contemplating how to identify and articulate their companies’ long term vision which would in turn shape their strategies towards achieving long term goals. Core Ideology A company’s core ideology essentially consists of its core values and core purpose. The core ideology transcends time in terms of changing business environments, changes in technology and even product and economic cycles and articulates the principle on which the company is formed that will guide its vision even when the leaders who articulated the vision are no longer there. Core Values Every successful company has its own core values- timeless, unchanging guiding principles or tenets which are determined independent of the business environment and which precede formulation and implementation business strategy and preclude core competencies. A company should never change its core values in response to the market but change its market to maintain its core values. Core Purpose A company’s core purpose is its reason for existence (raison d’être), not a goal or a business strategy or a simple mission statement. Essentially, a core purpose can never be achieved like a goal and should be framed in a way that will remain relevant despite changing circumstances. Like its core values, a company’s core purpose should endure the passage of time and while the company’s goals and business strategies may change in response to the business environment, they should remain consistent with its purpose for existence. Authenticity A company’s core ideology is discovered and articulated, not determined or created. The core ideology has to be authentic and not necessarily what fits best or what is considered “right”. This is essential if the core values are to be shared and pursued within the organization. Shared ideology For a company to achieve its long term vision, it is necessary for its leaders to ensure that it is staffed with people who share the company’s core values and believe in its core purpose. According to Collins and Porras (1996), this may imply at times bearing the cost of letting go excellent or brilliant people who do not share a company’s core ideology. Envisioned future Most successful companies when starting up have an audacious, 10 to 30 year vision level goal or BHAG (Big Hairy Audacious Goal) and a vivid description of what achievement of that BHAG would entail and look like. The vision level goal and the description are thus the key components of successful companies’ envisioned future. BHAG The vision level goal stimulates progress by outlining audacious goals beyond the company’s current capabilities which stimulate its leaders to be visionary rather than just tactical or strategic. The BHAG may not be entirely feasible or even appear to be realistic. It may also require an unreasonable level of confidence and commitment but it is the pursuit of the BHAG which will spur business growth to greater heights. Vivid Description In addition to the vision-level BHAG, a visionary company needs a vivid and detailed description of what achievement of the vision level goal would look like or an articulation of where it would like to be or what things would look like once the goals have been achieved. A vivid description basically translates a business’ vision from words to pictures and provides the stimulus for progress by identifying what needs to be done. Commitment The distinction between visionary companies that achieve their vision level goals and those that do not is their level of commitment in terms of building the strength of the company as a means of achieving their goals. According to Collins and Porras, the companies compared to those studied in their research did not achieve their goals not because they were harder, or that the visionary companies had easier goals, better strategy or more charismatic and visionary leadership but because they were not committed to their goals in terms of making decisions to strengthen the company and its people. Complacency/Lethargy Collins and Porass conclude by pointing out that an envisioned future is only helpful to a company as long as it has not been achieved. The achievement or realization of a business or company’s goals may invite lethargy or complacency into an organization- the “We’ve Arrived” syndrome- if the leaders of the organization rest on their laurels and do not articulate or seek new goals. Implications for Managing Business Growth Collins and Porass’ article on building a company’s vision has several implications for managing business growth. The article suggests that for a business to grow, its leaders or executives should primarily focus on discovering and articulating its core ideology rather than preoccupation with strategies and goals. The core ideology should be unchanging and timeless and it is in the pursuit of this core ideology that the most effective growth strategies or core competencies will be realized. Secondly, Collins and Porass argue that any for any business to grow it should be ambitious by having an audacious vision level goal which stimulates progress. The goals should be specific and matched with a vivid description of what its achievement looks like and entails. Regardless of whether the goals appear beyond the businesses’ current capabilities, they provide the stimulus that spurs innovation and growth. Another important implication from the article for business growth is that it can only occur if the business as an organization is staffed with the right people who share the business’ core values, core purpose and believe in its envisioned future. Therefore, business executives should ensure that their companies are staffed with people who share and believe in the core ideology which may imply letting go competent, brilliant or even excellent people who do not share this ideology. Only staff that share these core values, core purpose and believe in the realization of an envisioned future would be committed implementing and sustaining growth strategies. The article also implies that the degree of commitment to vision level goals is what differentiates between businesses that achieve their vision level goals and those that do not. Most significantly, Collins and Porass also prescribe that the only way a business can achieve its goals is if its decision makers make decisions that strengthen the business as an organization and its people and not through particular strategies or tactics. Lessons Learned and Implications for Professional Development There are several important lessons which can be drawn from Collins and Porass’ article on building company vision for managing business growth by business entrepreneurs. The first implication is that visionary businesses are independent in articulating their core ideology and setting goals for their envisioned future. There are no “right” values to pursue but businesses’ leaders or decision makers should independently determine what its core values are, articulate its core purpose and commit to upholding ore ideology. Another important lesson regards reacting to or how to manage change. A visionary entrepreneur should never compromise on their core values or purpose. As demonstrated by Collins and Porass, a successful business’ core ideology should be independent and unchanging and that it is from this that all business strategies, tactics and goals are pivoted. Prior to reading the article, I had a perception that successful and visionary companies have clearly defined and specific missions, targets, goals and strategies and that the constant adaptation of these strategies and goals to the changing environment was the basis for long term growth and success. However, I had not been cognizant of the logic presented by Collins and Porass that when facing change, a company should change its market to remain in line with its core ideology. As summarized in the dynamic of visionary companies, the core must be preserved to the maximum extent possible. Therefore, in my professional development and as an aspiring entrepreneur, the article has taught me that I must first discover and articulate my core values and those of the company I intend to start and then commit to the preservation of this core ideology. Change should therefore affect strategy or tactics insofar as they remain relevant and consistent with the core. In addition, I have also learned from the article as a business entrepreneur is that while it is prudent to have SMART (Specific, Measurable, Achievable, Realistic and Timely) goals, growth may necessitate the setting of ambitious or audacious goals. Collins and Porass suggest that at times, these goals may be beyond current capability or suggest overconfidence but they are essential for growth as they stimulate progress in the pursuit of them. Therefore, in my professional development, I have learned from the article that to make progress requires one to be visionary and to set ambitious goals that provide the stimulus for personal development. While these goals may not necessarily be achieved, they would inspire me to achieve greater heights both as a professional and an entrepreneur and stimulate personal and professional growth. The article has also encouraged me to pursue my own development organically and not merely depend on some grand strategy or tactic. To this end, I have learned that in the same way businesses can only achieve their goals by strengthening themselves as organizations, I have to strengthen my own capabilities for personal development and achievement of my professional goals and as an entrepreneur I must also seek to strengthen my business as an organization. In addition, the article has also suggested that as a professional, I should avoid working with businesses or companies whose core ideology I do not share. Another important lesson drawn by business entrepreneurs from the article is the importance of continuous critical self reflection in making critical decisions that affect any company’s strategy or future. As demonstrated by Collins and Porass, continuous critical self evaluation and reflection has helped most companies not only make the right decisions consistent with their vision but has also helped smaller companies better and more accurately identify their core ideologies. Asking questions such as whether the core values identified would still remain relevant in a century or whether a company’s employees would still show up for work even if they had enough money to retire would help in the process of articulating core values and core purpose as well as deciding whether to adopt certain strategies or to implement proposed changes in response to changing market conditions. Conclusion: Key Take-Home Messages for Entrepreneurs The article by Collins and Porass contains five key prescriptions or take-home messages for entrepreneurs. First and foremost, it urges entrepreneurs to engage in a critical and self reflective process of discovering, identifying and articulating their core ideology and to commit to the maximum extent possible to its preservation. Secondly, it urges entrepreneurs to be genuine and authentic about the process of articulating the core values and core purpose. Third, it urges them to be visionary, bold and ambitious in setting vision level goals as a means of stimulating business growth. Fourthly, entrepreneurs are advised to ensure commitment to their vision by ensuring that they only work with people who share their core ideology and future and guard against complacency by continuously setting new goals for their businesses. Lastly, Collins and Porass suggest that the only way a business can achieve its vision is by making decisions which strengthen it as an organization and not through strategies, tactics or goals. they should embrace an organic growth pattern. References Collins, J & Porras, J 1996, ‘Building Your Company’s Vision’, Harvard Business Review, September-October, pp 65-77. Read More