Built to Last (Collins and Porras)

Collins and Porras began by identifying exceptional companies, those they called “visionary.” The main criteria was longevity combined with sustained superior performance. Then, they compared each of these companies with a direct competitor that had not reached the same level. From there, they identified systematic differences between the two groups and presented these differences as the causes of the visionaries’ success.

The problem is in the path used to reach the conclusion. The study begins by choosing companies that have already worked and, only then, looks for common traits in them. There is no adequate control group. There is no independent verification that the identified practices preceded success. And there is no analysis of companies that adopted identical practices and failed.

A substantial part of the data came from retrospective sources: published articles, interviews with executives, case studies. These sources are not neutral. When a company prospers for decades, journalists and analysts describe it positively. Its culture is “strong”, its leadership is “visionary”, its goals are “audacious”. When facing difficulties, the same observers invert the adjectives. A strong culture becomes “rigid”. The vision becomes “stubbornness”.

What changes is not necessarily the company. What changes is how people describe it after knowing the result. When researchers collect data from these descriptions, they end up capturing not the true causes of performance, but the attributions made based on already known performance. Visionary companies are described a certain way because they are successful. But the study presents these descriptions as causes of success. It’s circular reasoning.

As Phil Rosenzweig noted, accumulating huge amounts of data doesn’t help if the data is already biased by the success halo effect. The book runs the risk of presenting correlations instead of true causalities.

In any large population of companies, some will inevitably perform exceptionally well over prolonged periods, even if their success depends partly on random factors. Identifying these companies after the fact and looking for common characteristics does not prove that these characteristics caused longevity. It may just mean that we are observing patterns in a small set of survivors.

Daniel Kahneman, in “Thinking Fast and Slow”, criticizes this type of approach for giving excessive weight to good practices instead of recognizing the luck factor. When comparing very successful companies with average companies, we are likely comparing more fortunate companies with less fortunate ones. Highly consistent patterns extracted from these comparisons tend to be statistical mirages, the result of regression to the mean: after an exceptional period, performance naturally tends to return to more modest levels.

To test causality, it would be necessary to identify companies that adopted identical practices at the beginning of the period and track them over time. Some would have prospered. Others would have failed. Only then could we assess whether the practices make a difference. But that’s not what Collins and Porras did. How many companies have tried to create strong ideological cultures and become inflexible? How many have set audacious goals and failed? These companies do not appear in the study.

Even more revealing is observing what happened to the visionary companies after publication. In 2004, ten years after the book’s release, Fast Company revisited the 18 visionary companies. At least seven of them had faced serious difficulties during the period, a failure rate close to that of any random group of companies. Motorola, celebrated as an example of continuous innovation, saw its leadership in mobile telephony disappear. Sony lost critical technology battles. Circuit City went bankrupt. Ford, Walt Disney, Boeing, Nordstrom and Merck faced serious difficulties in the 2000s.

An analysis by Mary Pat Campbell of the Society of Actuaries updated the data through 2024. While all 18 visionary companies still exist, most have failed to surpass the S&P 500 in shareholder value. They lasted, but did not always remain financially exceptional. The companies themselves presented as proofs of concept have demonstrated that exceptional longevity is difficult to maintain, even when you supposedly know the secrets to achieving it.

Business performance is always relative. A company competes against rivals in specific markets. You can improve operations, strengthen culture and continually innovate, but if competitors improve faster, your relative performance will worsen. The book treats success as achievable by following certain steps, regardless of what others do. This ignores the essentially competitive nature of markets.

Some companies studied operated in naturally stable sectors, with high entry barriers and slow technological changes. Others faced intense competition and constant disruption. Comparing longevity between them without adjusting for the characteristics of the sectors is problematic. Some of the observed durability may simply reflect the luck of operating in less turbulent environments.

Should we discard “Built to Last” altogether? No. There are genuinely valuable concepts. The idea of ​​preserving core values ​​while adapting operational practices is useful. The concept of audacious goals can stimulate ambition. An emphasis on internal leader development makes sense in many contexts.

The problem is treating these ideas as proven causal explanations of sustainable success. They work better as guiding principles, subject to revision according to context, rather than as universal formulas. And we need to recognize that business success depends on factors beyond managers’ control: market timing, unpredictable technological changes, competitors’ decisions, external shocks.

Perhaps the right question is not “what do visionary companies do differently?” This question already assumes that the answer lies in the internal practices of these companies. A more productive question would be: “How do we make better strategic decisions in environments where we cannot control all relevant factors and where competitors are also trying to win?”

This redesign changes everything. Instead of looking for blueprints, we started thinking in probabilities. Instead of believing that certain practices guarantee superior results, we recognize that they may increase the chances of success, but they never eliminate risk. Instead of studying just survivors, we included companies that failed by trying similar things. Instead of relying on retrospective attribution, we look for independent evidence.

Accepting that there is no magic formula for lasting success is not pessimism. It’s realism. And it can lead to better decisions. When we recognize the fundamental uncertainty of the business environment, we become more attentive to context, more willing to review assumptions, and more aware of risks. When we stop looking for timeless secrets, we can focus on what really matters: making choices that improve our chances of winning the next competitive battle.

“Made to Last” deserves to be read. It’s inspiring, intelligent and raises important questions. But it should be read critically, as a source of reflection on strategic dilemmas, not as a manual with proven recipes. The value of strategic thinking is not in following formulas. It lies in developing the ability to analyze complex contexts, separate evidence from attribution, and make difficult decisions without guarantees of success. It is precisely the absence of certainties that makes critical thinking indispensable.