Jornal Do Brasilia - Eric Ries sets out how mission-driven companies can endure

A review of Eric Ries’s Incorruptible examines his practical framework for keeping companies ethical and mission-driven as they grow, compete and answer to investors.

Over the last two decades, Eric Ries’s ideas about innovation and long-term thinking have made companies build new management practices.

As the creator of the Lean Startup: the idea of creating a Long Term Stock Exchange, Ries offers a bracingly practical vision of how companies can stay true and still win, and where the longevity of companies and investments gets measured in years and not weeks.

Full of compelling case studies and careful implementation details, the bookunfolds in three distinct parts: The Shape of the Abyss explores why even well-intentioned companies end-up betraying their promises; Escape Velocity provides the specific tools that make corruption not just difficult but impossible; and finally To Bend the Light shows how the organisations reshape entire industries around their values and paths.The reason to take the book seriously is not that Ries has discovered a pure way out of corruption but has found that durable institutions alter the field around them.

Incorruptible is a must-read for those involved in building durable businesses, or trying to do something good within the capitalist system.It gives a clear account of why companies fail to deliver on the good intentions they had at their founding, and a brilliant toolkit for anyone hoping to build something enduringly positive.It’s extremely well researched, engagingly written and has many examples of mission-driven companies that show how things can be done better.

One recalls the 1959 invention by engineer Nils Bohlin of the three-point safety belt that is the same kind of seat belt we still use today. Volvo could have kept this patented innovation for itself but open-sourced the patent so that other companies could use it for free. Volvo’s seat belt story is often retold in business circles but nobody ever tells it from the investors’ point of view. Did the decision spark a battle? Did financial projections show the company was walking away from millions in licensing fees?

But the Volvo CEO saw something that others couldn’t. When he became CEO in 1956, Volvo sold 31,000 cars annually; by his retirement in 1971, that number had grown to 214,000(nearly four times faster than the auto industry during the same period). The CEO decision was vindicated. Numbers apart, the company ‘gave away’ its most valuable patented innovation. And yet Volvo grew its brand, its influence, and visibility. Studies have shown that three-point belts reduced serious injuries by over 50 percent.

Ries book is not about visionary founders alone but about idealistic cultures. It’s not merely about creative governance structures that holds the majority vote. It’s all of those, integrated and inseparable from what the company offers its non-shareholder stakeholders and its competitive advantage.

Incorruptible is the practical guide to keep a company mission driven as it scales. It shows how leaders create breakthrough business models, cultures and governance to ensure that their mission endures. It offers a compelling vision for a future built by businesses that exist to serve rather than extract. The book is replete with detailed case studies drawn from some of the most commercially successful businesses in the world. It shares stories of companies that are able to resist the temptation to plunder their customers and betray their trust in the name of profit.

Over the last two decades, Reis’s ideas about innovation, long-term thinking, governance and market reform have reshaped company building and management. His idea connects fiduciary duty with human flourishing into a single, convincing argument. More than anything else, it argues how to build a mission-driven company that makes piles of money by staying both humane and ethical.

Book Name: Incorruptible: Why Good companies go Bad and How Great companies stay great

Published: Penguin RandomHouse

You can find the book here.

(Sudhirendar Sharma is a writer, researcher and academic.)

L. Dias--JDB