Key Elements of Successful Companies
I have been a senior-level executive at five companies over the past couple of decades. They have ranged from a couple of hundred people to 30,000. The management teams I was a part of ranged from dysfunctional to high performing. For those that were high performing, I have found the following consistencies.
Each senior leader had a high leadership lid. John C. Maxwell’s first of his 21 Irrefutable Laws of Leadership spells it out for us. Your leadership lid determines the level of effectiveness you will have. Have a low leadership lid, and you will never make it past the recreation team in business. If you have a high lid, you will play varsity for a long time. At Albridge Solutions, we built a management team of people that had high lids. It became evident in years four through six as we climbed the S curve. We all got along well enough and challenged each other’s assumptions and decisions. For us, a decision required data to back it up versus emotion. We took educated risks where we understood the consequences. That team broke up long ago. It is no surprise that each executive has moved on to further effectiveness and success.
Sharp focus is a difficult thing to achieve, especially for us left brain folks. I pride myself on being creative. I bring new, different, and unusual solutions to business problems and opportunities. When you achieve success in your business, it becomes even harder. Many will tell what you should build next or add to your product or service. Resist this, as it will distract you from the unrelenting focus you need. Many firms get distracted by the new, shiny idea. They get away from the core offering that drives their business. I have seen companies spend millions of dollars on products without research. Later, they wonder why they don’t sell. A solution looking for a problem is a tough way to introduce a product. In the meantime, the core offering revenue sagged. The result of the attention being directed away from it. At Albridge Solutions, we consolidated financial data for our clients. Everyone told us to build a CRM or compliance system. We had a lot of pride doing one thing: being the best consolidation engine on the planet. Over time we achieved our goal. Being laser-focused allowed us to monetize the company for over $300 million back in 2008.
First, you have to have a strategy. I have worked for businesses that had none or had many. Neither is good. The plan has to be simple. Why? So everyone understands it. I had one CEO tell me our strategy is to “sell.” Ok, I thought, that’s simple enough, but selling isn’t a strategy. Selling is an activity. A strategy is a plan for achieving the desired goal. It’s important for everyone in the company to understand where they are going and how to get there. Strategy starts within the management team. Next, the people who will perform the work to deliver on the plan get involved. Often the message gets lost in over-complicated PowerPoint slides. Or the message becomes confused in business garble. It often makes no sense to the people responsible for executing the work. Keep it simple, check in on how it is developing, and adjust course if needed. Next, remember to reinforce it every chance you get.
It is painful to see how little some companies know about the market or markets they serve. An addressable market the management team and board understand and agree on is a must. It will help Marketing, Sales, and Product perform. The CFO will be able to set reasonable and achievable revenue targets for the company. I once worked for a company that had been in a market for ten years. They didn't know who their ideal customer was or how many there were in the market. We performed the analysis, and it turned out there were only a couple dozen potential firms left to sell. That is not a good place to be. In Peter Ducker’s parlance, it defies the purpose of the business. It was Drucker who said, “the purpose of a business is to create a customer.” So I say, if you are not creating a customer, you don’t have a good business.
Great products rule the day. All the marketing and sales in the world cannot hide flawed products for long. We all seem to want to be number one, or the best. It is also ok to be number two or to work for a good company. As an example, Home Depot’s revenue is 50% greater than Lowe’s’. Both might be good places to work depending on your desires. I have worked for companies whose products were great and also so poor our customers didn’t like us. They voiced their displeasure in our surveys. They said many bad things about us in the market that we had to remind them of an important fact. They were our customer and hurting our business, in turn, would hurt them. That’s a vicious circle if there ever was one in business. A company with great products stands on the shoulders of giants in the super competitive 2017 economy.
At the heart of any successful company I was at there was a defined culture. The culture supports what the business was trying to achieve. Words like fun, hard work, and results-driven come to mind. I know lifestyle companies where the employees go skiing when it snows and surfing when the waves roll in. At one company I was with, we had developed a reputation for delivering on expectations. Our customers said “you guys do what you say.” This is by far the best compliment I have received in business. Well, it’s not surprising that the culture we had built was one of delivering on expectations. Accountability and sound decision-making ruled the day. Over time it proved out in the form of value for our customers. It felt good to be part of, and this drove us to continue to deliver because it felt good.
If you are thinking of joining a new company, look at the management team and ask yourself some questions. Are they people that you want to lead with? Or do they have high lids that you want to follow? Does the company know where they are going and have a laser focus on getting there? What markets do they serve? Why are they in business and do they have the products and services the market wants? Finally, is this a place you want to spend many hours at and think about? Can you have an impact and feel good about your effort and decision? These are tough questions to consider. But they are necessary if you want the best chance of work happiness and success.
My best, Chris