HBR SEPTEMBER-OCTOBER 1996
by James C. Collins and Jerry I. Porras
tions its structure and revamps its processes while preserving the ideals embodied in its credo. In 1996, 3M sold off several of its large mature businesses – a dramatic move that surprised the business press – to refocus on its enduring core purpose of solving unsolved problems innovatively. We studied com- panies such as these in our research for Built to Last: Successful Habits of Visionary Companies and found that they have outperformed the general stock market by a factor of 12 since 1925. James C. Collins is a management educator and writer based in Boulder, Colorado, where he operates a man- agement learning laboratory for conducting research and working with executives. He is also a visiting profes- sor of business administration at the University of Vir- ginia in Charlottesville. Jerry I. Porras is the Lane Profes- sor of Organizational Behavior and Change at Stanford University’s Graduate School of Business in Stanford, California, where he is also the director of the Executive Program in Leading and Managing Change. Collins and Porras are coauthors of Built to Last: Successful Habits of Visionary Companies (HarperBusiness, 1994).
We shall not cease from exploration And the end of all our exploring Will be to arrive where we started And know the place for the first time.
T.S. Eliot, Four Quartets
Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices end- lessly adapt to a changing world. The dynamic of preserving the core while stimulating progress is the reason that companies such as Hewlett- Packard, 3M, Johnson & Johnson, Procter & Gam- ble, Merck, Sony, Motorola, and Nordstrom be- came elite institutions able to renew themselves and achieve superior long-term performance. Hewlett-Packard employees have long known that radical change in operating practices, cultural norms, and business strategies does not mean los- ing the spirit of the HP Way – the company’s core principles. Johnson & Johnson continually ques-
Copyright © 1996 by James C. Collins and Jerry I. Porras. All rights reserved.
HARVARD BUSINESS REVIEW September-October 1996
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