SEPTEMBER-OCTOBER 1 9 9 6
by James C. Collins and Jerry I. Porras
We shall not cease from exploration And the end of all our exploring Will he 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 practices endlessly adapt to a changing world. The dynamic of preserving the core while stimulating progress is the reason that companies such as HewlettPackard, 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 quesHARVARD BUSINESS REVIEW September-October 1996
tions its structure and revamps its processes while preserving the ideals embodied in its credo. In 1996, 3M sold off several of its large mature businessesa dramatic move that surprised the business pressto 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. fames C. Collins is a management educator and writer hased in Boulder, Colorado, where he operates a management learning laboratory for conducting research and working with executives. He is also a visiting professor of husiness administration at the University of Virginia in Charlottesville. Jerry I. Porras is the Lane Professor of Organizational Behavior and Change at Stanford University's Graduate School of Business in Stanford, California, where he is also the director of the Executive Program in Leading and Managing Change. Collins and Porras are coauthors o/Built to Last: Successful Habits of Visionary Companies (HarperBusiness, 1994). 65
Truly great companies understand the difference between what should never change and what should he open for change, hetween what is genuinely sacred and what is not. This rare ahility to manage continuity and change - requiring a consciously practiced discipline - is closely linked to the ahility to develop a vision. Vision provides guidance ahout what core to preserve and what future to stimulate progress toward. But vision has hecome one of the most overused and least understood words in the language, conjuring up different images for different people: of deeply held values, outstanding achievement, societal honds, exhilarating goals, motivating forces, or raisons d'etre. We recommend a conceptual framework to define vision, add clarity and rigor to the vague and fuzzy concepts swirling around that trendy term, and give practical guidance for articulating a coherent vision within an organization. It is a prescriptive framework rooted in six years of research and refined and tested hy our ongoing work with executives from a great variety of organizations around the world. A well-conceived vision consists of two major components: core ideology and envisioned future. [See the exhihit "Articulating a Vision.") Core ideology, the yin in our scheme, defines what we stand for and why we exist. Yin is unchanging and complements yang, the envisioned future. The envisioned future is what we aspire to hecome, to achieve, to create-something that will require significant change and progress to attain.
company exists to make technical contrihutions for tbe advancement and welfare of humanity. Company huilders such as David Packard, Masaru Ibuka of Sony, George Merck of Merck, William McKnight of 3M, and Paul Galvin of Motorola understood tbat it is more important to know who you are tban wbere you are going, for...
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