Built to Last: The True Test of Timeless Companies

Collins: We did an interesting analysis in the book, where we analyzed, just picking who would have been the best performing companies over say certain period. And it wasn't the same list. In fact if we were just selecting on performance we would have picked a different list. And we put that list in the appendix. Not only did we say the book wasn't about performance, we went so far as to say, not only that, if you would have picked on performance, you would have picked a different list. Only one of those top 18 performers actually made it in to our study. And most of the companies there, you wouldn't look at today as really meet the BTL test. That is, how many of them meet that test of having an impact on society, that truly visionary standard of the companies? How many of them brought the 747 to the world? How many of them invented Disneyland? How many of them brought the IBM 360? How many of them changed the entire retailing landscape by redefining service? Or invented product management? The companies that are on this list, the best-performers over 10 years, they didn't have that stature. So I think that we were very, very clear, with our readers.

FC: What companies would be on the BTL list today and which ones would be off?

Collins: It's really an irrelevant question. Let me ask you a question. What is BTL about? BTL is not about these companies. Let me repeat that. That's a really important point and if you don't get that point, you don't understand the work. BTL is not about these companies. Good to Great is not about the GTG companies. The new research I'm doing now, here's the question I'm answering: How do you endure brutally turbulent events and still become great? Now let me ask you a question: Do you need to know who my companies are to be interested in that question? How to endure brutally turbulent events, big bad scary things out of your control, inherently unpredictable that can rip away control of your own destiny. And yet how can you survive those things and still end up being a great company or building something great or having a great life? Of course it's an interesting question. Now if I write a book on that question, are you going to come back and say that that book is about the companies? No, you're going to say it's about the question. It's pure theory, derived by empirical data.

What is BTL about? It's about discovering the timeless principles that make iconic companies that weave themselves into the fabric of the world. How did we discover those timeless principles? By discovering a set of companies that met that test at some point in their history and comparing them to what? To others that did not. So it doesn't matter if you picked a different list today so long as the companies met that test and you did rigorous paired comparisons. You would get the same timeless principles. The companies would be different.

Do the laws of physics change? Does f=ma change if you derive it by looking at billiard balls or whether you derive it by dropping pens from the leaning tower of Pisa? You don't go back and say f=ma no longer applies.

FC: Does it bother you when people focus on the list?

Collins: Somebody who focuses on the list, that's kind of like saying that physics is about billiard balls. No, physics is about physics.

I think for the most part, my experience has been that people haven't gotten hung up on the list of companies. I'll put it this way: At least, intelligent, practicing leaders haven't gotten hung up on it. If I'm sitting there with the CEO of a major hospital chain or a major corporation or a startup company, they don't look at me and say, "So, gosh do you think that Disney kind of negates any of this today?" I never get that question. What I get is, "We're really trying to preserve the core and stimulate progress here and I'm really struggling with how best to bring about that idea." I almost never get questions about the companies from people who are really trying to use the ideas.

It's like if you studied what makes good health. Let's suppose you and I want to do a study. We want to know what makes for leading a healthy life. And we take 50 people who have outstanding health at a certain stage of their life. And let's suppose we matched those against people who are chronically sick but came from similar demographics. We match-paired them all. We do a nice controlled match-paired study. Now let's suppose we discover that exercise, diet, and sleep are three principles of health. Now let's suppose 10 years later, somebody calls you and says we're doing a retrospective on your study on health and we found that five of your original subjects, two of them took up smoking, one of them became obese, and all of them gave up exercise. We'd like to ask whether that questions the important of diet, sleep, and exercise. No. Would you question that? No you'd say five of our study sets stopped sleeping well, eating well, and getting enough exercise. And if you were to do the study today, would those five make it into the study? Maybe not.