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Like Peters and Waterman a decade earlier, James Collinsand Jerry Porrasspent years conducting empirical research on what makes great companies. Six years of research uncovered a key underlying principle behind the 19 successful companies that they studied: They all encourage and preserve a core ideologythat nurtures the company. Even though strategy and tactics change daily, the companies, nevertheless, were able to maintain a core set of values. These core values encourage employees to build an organization that lasts. In Built To Last(1994) they claim that short term profit goals, cost cutting, and restructuring will not stimulate dedicated employees to build a great company that will endure.In 2000 Collins coined the term “built to flip” to describe the prevailing business attitudes in Silicon Valley. It describes a business culture where technological change inhibits a long term focus. He also popularized the concept of the BHAG(Big Hairy Audacious Goal).Arie de Geus(1997) undertook a similar study and obtained similar results. He identified four key traits of companies that had prospered for 50 years or more. They are:•Sensitivity to the business environment — the ability to learn and adjust •Cohesion and identity — the ability to build a community with personality, vision, and purpose •Tolerance and decentralization — the ability to build relationships •Conservative financing
16A company with these key characteristics he called a living companybecause it is able to perpetuate itself. If a company emphasizes knowledge rather than finance, and sees itself as an ongoing community of human being, it has the potential to become great and endure for decades. Such an organization is an organic entity capable of learning (he called it a “learning organization”) and capable of creating its own processes, goals, and persona.Jordan Lewisfinds competitive advantage in alliance strategies.Rather than seeing distributors, suppliers, firms in related industries, and even competitors as potential threats or targets for vertical integration, they should be seen as potential assistants or partners. He explains how mutual respect and trust is the cornerstone of this approach and describes how this can be fostered at the interpersonal relationship level. The military theoristsIn the 1980s some business strategists realized that there was a vast knowledge basestretching back thousands of years that they had barely examined. They turned to military strategyfor guidance. Military strategy books such as The Art of Warby SunTzu, On Warby von Clausewitz, and The Red Bookby Mao Tse Tungbecame instant business classics. From Sun Tzu they learned the tactical side of military strategy and specific tactical prescriptions. From Von Clausewitz they learned the dynamic and unpredictable nature of military strategy. From Mao Tse Tung they learned the principles of guerrilla warfare. The main marketing warfarebooks were:•Business War Gamesby Barrie James, 1984 •Marketing Warfareby Al Ries