I’d like to close this chapter with an essential caveat about persistence from Built to Last. Of all the paragraphs I’ve authored or co-authored in thirty years, this is one of the most essential for entrepreneurs and leaders of early-stage ventures, reproduced here as a reminder to keep firmly in mind as you build your company:

The builders of visionary companies were highly persistent, living to the motto: Never, never, never give up. But what to persist with? The company. Be prepared to kill, revise, or evolve an idea . . . but never give up on the company. If you equate the success of your company with the success of a specific idea—as many businesspeople do—then you’re more likely to give up on the company if that idea fails; and if that idea happens to succeed, you’re more likely to have an emotional love affair with that idea and stick with it too long, when the company should be moving vigorously on to other things. But if you see the ultimate creation as the company, not the execution of a specific idea . . . then you can persist beyond any specific idea—good or bad— and move toward becoming an enduring great institution.

Practice Productive Paranoia (Avoid the 5 Stages of Decline)

The first step in being built to last is don’t die. The only mistakes you can learn from are the ones you survive. Every company is vulnerable to decline. There’s no law of nature that the most successful companies will inevitably remain at the top. Any can fall and most eventually do. Entrepreneurs who build great companies differ from less successful comparisons in how they maintain hypervigilance in good times and bad. Leaders who navigate turbulence and stave off decline assume that conditions can unexpectedly change, violently and fast. They obsessively ask, “What if? What if? What if?” By preparing ahead of time, building reserves, preserving a margin of safety, bounding risk, and honing their discipline in good times and bad, they handle disruptions from a position of strength and flexibility. Productive paranoia helps inoculate organizations from falling into the 5 Stages of Decline that can stop the flywheel and destroy an organization. Those stages are (1) Hubris Born of Success, (2) Undisciplined Pursuit of More, (3) Denial of Risk and Peril, (4) Grasping for Salvation, and (5) Capitulation to Irrelevance or Death.

Do More Clock Building, Less Time Telling

Leading as a charismatic visionary—a “genius with a thousand helpers” upon whom everything depends—is time telling. Shaping a culture that can thrive far beyond any single leader is clock building. Searching for a single great idea upon which to build success is time telling. Building an organization that can generate many great ideas is clock building. Our research showed that leaders who build enduring great companies make the shift from time telling to clock building. Clock builders create highly replicable recipes, extensive training programs, leadership-development pipelines, and tangible mechanisms to reinforce core values. They get the right people on the bus and then manage the system, not the people. For true clock builders, success comes when the organization proves its greatness not just during one leader’s tenure but also when the next generation of leadership further increases flywheel momentum. To use an analogy, think of writing the U.S. Constitution as a consummate act of clock building, so that the start-up nation might endure beyond the courage and genius of those who won the War of Independence. Similarly, launching a start-up is like winning the War of Independence, but building a company that can last is like writing the Constitution. (Directed reading: Built to Last, Chapter 2; Great by Choice, Chapter 6.)

There are four key principles to keep in mind when setting company strategy.

1. The strategy must descend directly from your vision. Remember, it’s impossible to set strategy unless you have a crystal clear idea of what you’re trying to do in the first place. Vision first, then strategy!

1. The strategy must leverage off the strengths and unique capabilities of your company. Do what you’re good at.

1. The strategy must be realistic. It must therefore take into account internal constraints and external factors. Confront reality, even if reality is unpleasant.

1. Strategy should be set with the participation of those who are going to be on the line to make it happen.

Part 5: Build Your Team

5.1. Hiring

“The best teams are multigenerational—Nest employed twenty-year-olds and seventy-year-olds. Experienced people have a wealth of wisdom that they can pass on to the next generation and young people can push back against long-held assumptions. They can often see the opportunity that lies in accomplishing difficult things, while experienced people see only the difficulty.

And they can grow with your company. The tried-and-true employees who joined your business in the beginning will leave eventually. Everyone leaves eventually. But before they go, you want them to mentor and train an army of young people. That’s how you keep your company going. That’s how you create a legacy.