We shall not cease from exploration / And the end of all our exploring / Will be to arrive where we started / And know the place for the first time. T.S. Eliot, Four Quartets Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and […]
Summary: Companies that enjoy enduring success have a core purpose and core values that remain fixed while their strategies and practices endlessly adapt to a changing world. The rare ability to balance continuity and change–requiring a consciously practiced discipline–is closely linked to the ability to develop a vision. Vision provides guidance about what to preserve and what to change. A new prescriptive framework adds clarity and rigor to the vague and fuzzy vision concepts at large today. The framework has two principal parts: core ideology and envisioned future. Core ideology combines an organization’s core values and core purpose. It’s the glue that holds a company together as it grows and changes. Core values are an organization’s essential and enduring tenets–the values it would hold even if they became a competitive disadvantage; core purpose is the organization’s fundamental reason for being. The second component of the vision framework is the envisioned future. First, a company must identify bold stretch goals; then it should articulate vivid descriptions of what it will mean to achieve them. Henry Ford set the goal of democratizing the automobile, then told the world, “When I’m through…everyone will have one. The horse will have disappeared from our highways”–an imaginative stretch for the time. Unfortunately, the usual vision statement is fuzzy and inspires only boredom. But managers who master a discovery process to identify core ideology can link their vision statements to the fundamental dynamic that motivates truly visionary companies–that is, the dynamic of preserving the core and stimulating progress.
Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices endlessly adapt to a changing world. The dynamic of preserving the core while stimulating progress is the reason that companies such as Hewlett-Packard, 3M, Johnson & Johnson, Procter & Gamble, Merck, Sony, Motorola, and Nordstrom became elite institutions able to renew themselves and achieve superior long-term performance. Hewlett-Packard employees have long known that radical change in operating practices, cultural norms, and business strategies does not mean losing the spirit of the HP Way—the company’s core principles. Johnson & Johnson continually questions its structure and revamps its processes while preserving the ideals embodied in its credo. In 1996, 3M sold off several of its large mature businesses—a dramatic move that surprised the business press—to refocus on its enduring core purpose of solving unsolved problems innovatively. We studied companies such as these in our research for Built to Last: Successful Habits of Visionary Companies and found that they have outperformed the general stock market by a factor of 12 since 1925.