BUILT TO LAST Ideology Every company built to last must have a core ideology.

Core ideology consists of two parts Core values and purpose. Core values are the organisations enduring tenets, not to be compromised for financial gain or short term expediency. Purpose is the organisations fundamental reason for existence beyond just making money a perpetual guiding star on the horizon.

Stimulate progress and Change Operating practices, goals, strategies

Preserve core values and core purposes

Ideology is not in words but in deeds. Declaring an ideology is not enough, concrete steps are required to be taken to make the ideology pervasive throughout the organisation and transcend any individual leader. When people publicly espouse a particular point of view, they become much more likely to behave consistent with that point of view, even if they did not previously hold that point of view. Most conventional managers with their eyes fixed on the fine lines of regulations, irrevocably suffer from deadly myopic vision. They cannot see or comprehend the purpose for which the organisation exists.

A company Built to Last is actually built to change and change is anathema to short sighted managers, they resist change tooth and nail. They cannot visualise a situation of This AND That, for it is either This Or That The key word is AND not OR. Continuity AND Change Core Values AND Big Hairy Audacious Goals Stability AND Discontinuity/change Cult like Cultures AND Idiosyncratic People Consistency AND Innovation Discipline AND Creativity Systematic methods AND Experimental Approaches Autonomy AND consistency and control Invest for the future AND do well in the short term Progress by methodical planning AND by opportunistic groping Be idealistic AND pragmatic Purpose beyond profit AND pragmatic pursuit of profit Philosophical, visionary, futuristic AND superb daily execution. Organisation aligned with a core ideology AND adapted to its environment. Preserve the Core AND Stimulate Progress The secret to an enduring great company is its ability to manage continuity and change a discipline that must be consciously practiced, even by the most visionary of companies.

Clock Building NOT Time telling: I have concentrated all along on building the finest retailing company that we possibly could. Creating a huge personal fortune was never particularly a goal of mine. Sam Waltson, Founder Wal-Mart Success of a visionary company comes more from underlying processes and fundamental dynamics embedded in the organisation than from great ideas or leaders. We are in the business of preserving and improving human life. All our actions must be measured by our success in achieving this goal. Merck and Company, Internal Management Guide, 1989. Merck developed Mectizan, a drug to cure River blindness a disease that infected over a million people in the third world with parasitic worms that swarmed through body tissues, eventually causing painful blindness. A million customers is pretty good market size, except that these were customers who could not afford to buy the product. No government or other agencies came forward to purchase the drug and distribute to the needy. Merck elected to give away the drug free to all who needed it; it also involved itself in direct distribution efforts to ensure that the drug reached the million people at risk. Asked why Merck made the Mectizan decision, Vegelos pointed out that failure to do so would have demoralised the Merck scientists scientists working for a company that explicitly viewed itself as in the business of preserving and improving human life. He also added that after World War II, Merck brought streptomycin to Japan to eliminate tuberculosis and Merck did not make any money in it. But today, Merck is the largest pharmaceutical company in Japan. The long term consequences of such actions are not always clear, but they always pay off.

Boeing is always reaching out to the tomorrow. This can only be accomplished by people who live, breathe, eat and sleep what they are doing. Boeings decision to make 747. It had both economic and non-economic motives. It built Boeing 747 as much because of its self identity as because of its desire for profits. Why do the 747? Because we are Boeing When Boeing director Crawford Greenwalt asked a member of the senior management about the projected return on investment of the proposed 747, the manager told him that they had run some studies, but couldnt recall the result. Greenwalt just put his head down on the table and muttered My god these guys dont even know what the ROI will be on this thing.

Nordstrom Employees Handbook. A single 5x8 inch card and read,

WELCOME TO NORDSTROM We are glad to have you with our company. Our number one goal is to provide Outstanding customer service Set both your personal and professional goals high. We have great confidence in your ability to achieve them. Nordstrom Rules: Rule # 1: Use your good judgement in all situations There will be no additional rules. Please feel free to ask your department manager, operational manager any question at any time.

First Things First Human Needs : to live, to love, to learn, to leave a legacy Cause and effect: The gap between Stimulus and response; the freedom to choose our response, consequences of our choice over which we have no control but principles have. Human Endowments: self awareness, conscience, independent will, creative imagination