\n\t\t\t\t
Let’s start by looking at why these companies are so valuable and what makes us so sure…<\/strong><\/p>Jim and Jerry compared visionary companies with comparison companies that were constructed around the same time period and focused on very similar industries. For example, GM vs. Ford, or Texas vs. HM Instruments. Basically, these were companies that were outshining those already on the market.<\/p>
They discovered that if $1 was invested into comparison companies, the return doubled that of the general type of market; but if $1 was invested in a visionary company, then the return was fifteen times <\/i>as much.<\/p>
So, these companies do have something worth knowing about the key factors necessary to being succesful AND staying succesful over a long period of time.<\/p>
But how is it done?<\/strong><\/p>Let’s find out.<\/p>
Building clocks \u2013 not telling the time.<\/strong><\/h3>To begin with, Jim and Jerry highlighted the initial difference between comparison companies and vision companies.<\/p>
They did this by using the metaphor of Clock Building vs. Time Telling. Time Telling equates to being focused on being a charismatic leader of a company or maybe brainstorming a fantastic idea, whereas the focus of the Clock Builder is to create an amazing company that thrives beyond the realms of any leader or product cycle.<\/p>
What is really interesting is that not many of the greatest companies included in their study began as the result of an initial brilliant product or an excellent idea.<\/p>
Some even began as downright failures!<\/div>
\u00a0<\/div>
When Masaru Ibukain founded Sony in 1945, initially no product idea existed. Two possible first products that were considered were bean-paste soup and miniature golf equipment. In the end, they agreed on a rice cooker.<\/p>
The first product \u2013 which was a tape recorder \u2013 was a failure in the marketplace.<\/p>
For many visionary companies, the ultimate goal was never a product designed to be a runaway hit…<\/p>
Instead, it was the creation of an enduring company.<\/p>
The book describes the shift in viewing the products like vehicles for company creation, rather than the company like a vehicle for product development.<\/b><\/p>
The visionary company creators were prepared to revise or even kill a product that was failing, but were never going to give the company itself, up. When the focus shifts from creating great products to the creation of an enduring company something really extraordinary happens \u2013 the realization hits that, to succeed, a charismatic high-profile leader is not necessary.<\/p>
\u00a0<\/strong>‘OR and the Tyranny of it.’<\/strong><\/p>Interestingly, Jim and Jerry also discovered that visionary companies quite often didn’t make the same trade-offs similar companies were making.<\/p>
Most companies give choices \u2013 either you have stability or change; high quality or low cost \u2013 but visionary companies would always find a compromise and have both.<\/p>
More Than Just Profit<\/strong><\/h3>The existence of visionary companies is not solely to make money \u2013 something which typically doesn’t apply to comparison companies.<\/p>
Business School will highlight that the company’s primary purpose is to ensure profit for its shareholders.<\/p><\/div>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t