Chapter Summation: Key Takeaways
Conservative estimates suggest that more than 70% of new businesses fail within the first ten years, with 60% shutting down in the first five years. These statistics lead many people to believe that business is a gamble. However, there are clear differences between an activity like gambling that is almost entirely random in nature, and something like business ownership that has no greater randomness to it than most other areas of life. In business there are ways to effectively manage and control most situations. You can drastically improve your odds with a 70% success instead of failure.
Business success does not happen by accident or good fortune. It takes deep knowledge, passion, hard-work, focus, discipline, tenacity, and the right mind-sets to be successful. With passion and dedication you can obtain the type of business mastery that will help you be the true architect of your company’s success. This book covers the vital importance of developing a clear vision of where you envision you company’s ultimate destination to be and how to build your teams to best succeed in achieving their missions, goals, and objectives to help your company get there. You gain the understanding and appreciation of all the critical components that must function well as a complete system or independently as a subsystem.
You learn to be the leader and mentor inspiring everyone within your reach to create a leadership culture of shared-vision. Together your team is unified in purpose, efficient, and capable of performing at optimal levels on a consistent basis. When you have a company that can achieve those standards, then you have a company that can achieve almost any goal. Ideally, your goal is to create the type of company that is almost impossible for your competitors to fully replicate. However, you cannot do that all by yourself. It all has to start with you, but at some point in time you will have to begin to rely on a team to help you achieve your vision.
You need to find the type of competent people who are capable of being inspired by your exceptional leadership style and strategic vision, as that is the only way to ensure that they are in turn capable of helping you to create the type of business culture that your enterprise needs for success. That culture should motivate everyone in the company to consistently deliver their highest level of commitment and performance, and thereby, contribute to the efforts to reach your business goals. Once you reached that point, you will have created a system that basically channels the mindset of its leader even when your attention is elsewhere. You will have designed a system for effectively cloning yourself.
No company ever becomes the best in class by accident. You have to position your business to achieve that status. The ability and discipline to focus on all of the things that matter, along with the passion to excel in every single department, function, and business activity, is absolutely critical for ensuring that you have the optimum opportunity for business success. You cannot afford to let yourself be blindsided by overconfidence due to a misguided faith in your ability to excel in just one or two skill sets – or hope that superiority in those areas will somehow mask your mediocrity in every other area.
When others on your team fail to bring their skill sets to bear in a way that helps you to excel in every area of your business, then you leave yourself open to failure. One or two areas of competency are not enough to succeed; the true measure of your competitive superiority can only be found in the total of all of your scores.
Just think about your favorite talent show or sports competition where winners are determined by a panel of judges, with the total scores from eight different criteria used to make that decision. A competitor who scores 10 out of 10 in two categories, but who has mediocre scores of 7 of 10 in the other six categories will ultimately lose out to the competitor who manages to score 8 of 10 across all eight categories.
And so it is with the world of business. Being the best in class in every category is always a winning strategy whenever it is tried. To be the best in class, you have to realize that everything matters. The most important of them all are the four pillars of business success; you, your great ideas, your employees, and your customers. Focus on them to improve your odds of business success.
Chapter 1: Be: Equal to or Better than the Competition
Very few entrepreneurs start their businesses with ideas so revolutionary that they basically create their own industries. In most instances, you’ll be entering an established market populated by established companies that will all be competing for the same customers and market share that you need for your own business success. To achieve your goals, you need to be at least equal to your rivals, and ultimately better than them. As your company’s leader, the burden is on you to set the tone that will allow your business enterprise to become the best in class.
- Focus on your own mindset, and direct your efforts toward being the best in every category that matters. If you believe that you cannot become the best in class, that mindset will become a self-fulfilling prophesy.
- Focus your resources on those areas that promise the best return on your monetary, time, and labor investment. Look for ways to differentiate your offering from the competition, and then orient your company’s messaging toward using those positive differences as selling points.
- Remember these eight areas where you can strive to become the best in class:
- Work to understand your customers.
- Emphasize superior customer service.
- Focus on differentiation.
- Always look for ways to improve your branding efforts.
- Invest in Public Relations early to build awareness and credibility.
- Be aware of emerging trends and remain future-focused.
- Pursue growth by identifying complementary offerings.
- Strive to become the best employer, to ensure that your employees are completely on board with the mission.
- Understand yourself and your company, even as you work to gain deeper insight into the minds of your rivals. Sun Tzu’s philosophy is as relevant today as it was all those centuries ago.
Chapter 2: The Four Principal Components
Throughout the book, I emphasize four business components that I refer to as the pillars of success. These are introduced in a broad sense in the second chapter, and include:
- You; as the leader of your company and chief architect of your business vision. Your vision is central to everything that your business does; leading to the formation of its culture, structure, mission, and strategies over time.
- Your great idea; which manifests itself in the form of your company’s marketable products and services. These ideas are the lifeblood of your enterprise, and the means by which you service your customers and provide for the needs of your employees. Innovation is important, but so too is the ability to communicate a unique selling proposition that entices customers to flock to your offerings, as well as the ability to target areas of the marketplace that offer long-term growth potential.
- Your employees; who provide the team you need to replicate yourself and expand your own reach. The key to success in dealing with your team is to work diligently toward the goal of endowing each employee with your vision and drive to succeed. That makes effective hiring and training a priority for any company.
- Your Customers; without which your company would have neither revenue nor reason to exist. Your customers are the real boss, since it is they who determine whether or not your company can be profitable enough to survive over the long-term. To successfully leverage the power of your customer base, you must learn about your customers and figure out how you can increase their value to your business enterprise.
Chapter 3: A System Approach – Designing Your Company
The systems approach to designing a business is one of the toughest things for many new entrepreneurs to grasp. Too often, they focus on the power of their ideas, and assume that their personalities are sufficient to create just the type of company they want. Misconceptions of this nature are the reasons that so many of today’s companies are so dysfunctional. The reality is that your company is a system made up of many smaller systems, sub-systems, and individual components.
Each of those components must work in harmony with every other part of the business if the larger system is to function to its maximum potential. Everything within the system affects everything else, and it means that even seemingly minor problems in one area of the company can quickly ripple throughout the business and negatively impact other areas. Without a systems approach to problem-solving, these complications can quickly alter your corporate culture or otherwise cause broader dysfunction at every level of the organization.
Our systems approach analysis recommends that you emphasize active creation and definition of your business brand, vision, mission, values, and culture, and focus on that as a matter of course. By doing so, it helps to ensure that those fundamental aspects of your company are not changed by internal or external forces in a way that could ultimately harm your enterprise. The broader goal of all of this is to ensure that your team members have been properly empowered to implement your vision by maintaining your established business culture. Values must align with vision. Your culture must be in agreement with your mission. All of these components must be in sync to ensure that every system works in concert with every other system, together creating the broader system alignment every company needs to achieve its goals.
To accomplish this goal, you have to work to create excellence throughout your business, and in every category:
- Leadership and Management
- Structure and Process
- Mutual Goals Review
Chapter 4: Leadership and Management
Leadership and management are difficult concepts for many people to grasp. All too often, entrepreneurs confuse the two ideas, and that can lead many new business owners to assume that they are leaders just because they spend the bulk of their time managing operations and every other aspect of their companies. Nothing could be further from the truth.
The fact is that today’s entrepreneurs are often followers. Rather than lead their enterprises and teams on missions that would carve out their own niche markets, many of these business owners are content to simply follow in the path created by their rivals and competitors. Many simply trust that they will get a lucky break that will help them to find the success they crave. The problem is that luck is one of those ingredients that is inherently unreliable. You can’t count on it to happen to you. Instead, you have to create the conditions that can give your company the best opportunity to thrive. That is accomplished through excellent leadership and effective management. Though there is overlap between these two roles, they are very different in a broader sense.
- Leaders inspire people to follow them in pursuit of a broad vision and mission. They provide values and direction, and use persuasion to motivate others to follow them and join with them in their quest for some broader goal.
- Managers, on the other hand, do not have to necessarily inspire (though it can be helpful at times). Instead, they are given authority from their leaders, and use that authority to coordinate teams of employees to accomplish leadership’s goals. They communicate inspiration that is derived from leadership, and channel company resources in an effort to complete the tasks that need to be performed to reach the ultimate objectives.
- Leadership is critical due to its role in providing ideas, focus, values, inspiration, and objectives for the team to meet. Management is critical due to its role in mobilizing the resources needed to make leadership’s vision a reality. Followers look for certain traits in their leaders:
- While many small business owners are tasked with serving in both roles within their own companies, it is still important that they learn to identify the responsibilities of each to ensure that they are effective as possible.
- Part of your company mission should involve the identification and cultivation of leadership traits within your team. That is part of building a leadership culture that can help to empower team members at every level of your organization and strengthen every system in your company.
Chapter 5: Strategy
Strategy is critical in all walks of life, for without a plan the odds of obtaining success are limited. Despite that obvious fact, a surprising number of entrepreneurs enter into business without taking the time to develop the type of strategic plan that can actually guide them to success. Many simply believe that their vision, coupled with a sound slate of products or services, will be all that they need to survive and prosper. True success, however, can never be realized without a well-conceived strategic plan that transforms your operational decisions over time.
Strategy is not just a broad concept used to guide your company towards its goals, but a necessary element for success at every level of your business. You must learn to think strategically, and do so in a multi-dimensional way that encompasses all of the systems, subsystems, and components that make up your company. Your strategic thinking must take into consideration the interrelated nature of everything within and outside of your business environment. Additionally, it must also take into consideration your goals, the company’s core competencies, the available resources, existing leadership and management needs, and a viable timetable for implementation.
There are three stages involved in the formulation of any strategic plan:
- Create the strategy.
- Implement the strategy.
- Review the results and modify the strategy as needed.
As you develop your strategy, important factors must be taken into consideration throughout the process. You need to focus on customers, get to know them, and learn to engage them. You also need to take into consideration new technological trends such as mobile computing, blockchain technology, and other aspects of FinTech. In addition, plan to utilize effective content to ensure that messaging is handled properly. And you must make continuing team education a priority.
Chapter 6: Execution
There is a second component of strategy, and it involves execution. Strategies that never get implemented are nothing more than wasted words. And yet many companies seem to give little emphasis to successful execution – a fact that can lead to strategic drift over time. There are many reasons for this failure to execute, not the least of which is the simple fact that execution is seldom seen as exciting. Leaders love to plan, but far too few enjoy the follow-up necessary to ensure that their plans actually amount to something tangible.
A good execution plan should include a number of critical components:
- It must provide details that explain how the strategic plan is to be carried out at every stage of the process. Key decisions, needed processes, and other important factors should all be covered in detail.
- A good execution plan outlines responsibilities for decision-making, provides a blueprint for cooperation, and sets out standards for accountability.
- Finally, the best execution plans always include measurement standards that enable leadership to evaluate results, monitor overall progress toward the objectives, and inform any efforts to modify the strategy.
Failure in this area can be catastrophic for many businesses, and can rebound to leadership in a negative way. Leaders who fail to properly direct strategic execution often see employee confidence in the company’s leadership drop precipitously. At the same time, the company can lose focus, the team can suffer a loss of cohesion, and customers eventually realize that something is amiss. Worse, such failures will prevent you from being the best in class.
To avoid such pitfall, be sure that your execution plan is one that is well-understood and capable of being translated into action. Never create an initiative without a plan for implementation. Communicate your goals, plans, and processes to your team. Finally, track results during the execution process, review them, and adjust as needed.
Chapter 7: Organizational Structure and Process
Organizational structure is not always given the emphasis that it deserves, and that can lead to serious consequences. The fact is that every organization has a structure, often times, both formal and informal. The only real question is whether that structure is created by design or develops organically in a less predictable manner. You need to design the structure yourself rather than waiting for employees or outside forces to organically create it over time. At times, you design project specific structure, define the process, and provide the necessary support and resources involving multiple teams and departments.
Most people limit their thinking of structure in a business to just the hierarchy of relationships within the organization. They look at how every member of the team relates to every other member, from top to bottom and side to side. While that is certainly one aspect of any formal organizational structure, it is by no means the be-all and end-all of this important concept. Dynamic and fast growth companies constantly create new structure and process, involving multiple departments, as they embark new projects. Beyond just the hierarchy organization chart, think of structure and process as part of a master logistic plan, involving command and control of communication as well as the allocation and deployment of resources. Structure and process can be created or modified as deemed necessary to best accomplish the mission involved.
The right structural choices are essential for a systems approach to business, since your structure will be necessary to ensure that each component and subsystem properly complements and interacts with every other part of the company. In this, a structural diagram can be invaluable for outlining priorities, detailing assignments, responsibilities, and accountability, and helping to channel the entire team’s efforts toward the common pursuit of company goals. Good structural design also provides safeguards to facilitate progress, while reducing duplicative efforts.
Strategy and structure are inexorably linked, since structure is essential to strategic execution. Even the best strategies will never succeed if there is no effective structure in place to carry out the plan. Worse, strategies often succumb to the gravitational pull of structure, as misalignment of strategy and structure results in your plans being broken by the very systems and subsystems you’ve put into place. That typically ends with the strategy being essentially rewritten by the demands of your company structure. To prevent that, remember:
- Directives from on high are not enough to overcome misalignments between strategic plans and structural imperatives.
- As a result, changes in strategy often necessitate modifications in your structure to create alignment.
- Strategy and structure are so closely linked that you cannot effectively alter one without altering the other.
- Your role as leader is to develop plans, and ensure that the right structure is in place to execute your directives. As you do so, you must consider the impact on employees, processes, and other strategies within the company.
- Structural deficiencies must be addressed promptly. Where change is not possible, strategies need to be modified to reduce structural tension. All structural and strategic changes need to be continually revisited to track progress and evaluate progress.
Remember, structure should be defined by need. When process, employee, and strategic needs are all taken into consideration at every level of your organization, the structure you ultimately settle on should provide you with the ideal environment to execute your plans.
Chapter 8: Delegation
The act of delegating responsibility or tasks seems so simple that most leaders and managers just assume that they know how to do it properly. Sadly, that is simply not the case. Far too many managers operate under the assumption that the best way to make themselves indispensable is to ensure that no one else knows how to do their jobs. Others simply don’t trust subordinates to handle certain tasks. There are even managers who do things on their own because they believe that delegation would take longer.
Successful companies, however, make delegation a priority, even going so far as to look for delegation skills during the hiring process. For your business to be successful, team members must know how to do other employees’ jobs. That cross-training can be one of the best ways to ensure that every employee understands and appreciates his team’s contributions, which in turn promotes the unity you need within your company culture. At the same time, a culture that values delegation can reduce productivity losses due to illness, injury, or employees leaving the organization.
As the leader, it is your task to create a culture of delegation by leading from the top. You should train managers to perform many of your tasks, empowering them to learn everything they can about the company. You then encourage them to do the same with their own subordinates. In this way, you elevate each member of your team to be the best they can be. And remember, effective delegation involves delegation of responsibility, authority, and accountability.
Chapter 9: Employees: A Pillar of Business Success
Though many modern business owners perceive their employees as cost burden that must be managed, there was a time when almost every employer understood the value of his people. You can benefit from modeling your company after those savvy entrepreneurs, by recognizing that employees truly are your best asset. To get the most out of your business relationship with each employee, you need to begin with a culture that fosters appreciation for each member of the team.
It is true that employees can be a source for dysfunction, but in most instances those problems are the result of poor leadership, poor management, or both. Inferior recruiting processes sometimes lead to inappropriate hiring decisions. Many entrepreneurs hire family and friends who are not committed to the company’s success. Expectations for employees are sometimes left unclear. In other instances, there is no mutual respect, which can lead to poor morale. In many of the worst company cultures, managers stand by as a confrontational environment develops over time.
The good news for you is that you can achieve a different and better result. Recognize that your employees are your best non-binding partner, and they have a vested interest in their own career advancement and job security. When you focus on hiring and training the right candidates for your company, and then work to ensure that they are placed in the right positions within your organization, you will be creating a dedicated team that focuses like a laser on achieving your company goals. And when you give priority to helping them increase their own value as employees, you will unlock the true potential of your company’s most valuable asset.
Chapter 10: Beyond Employee Performance Review – Mutual Goals Review
If you’re like most leaders, you’ve probably dealt with managers who absolutely dread employee performance reviews. To be fair, there is something inherently distasteful about any process that practically begs evaluators to search for even the slightest flaws in their employees’ performance over any given period of time. For that reason and many others, these periodic reviews have fallen out of favor in the halls and offices of many companies around the world.
That lack of interest in these reviews does not mean that they have no value, however. You need some way to ascertain an employee’s progress, focus on his accomplishments, identify areas where improvement could be made, and determine future rewards. The key is to avoid the most negative aspects of traditional performance reviews – like using them to emphasize any areas in which the employee has failed to excel, or relying on untrained managers who often despise the very process of evaluating their subordinates to exercise their own judgment.
“Mutual Goals Review” that I am introducing is significantly more rewarding and collaborative in promoting employees’ career advancement than the subjective grading of employees weaknesses. It serves the mutual interest of both the company and the employees with a unified purpose of fulfilling the company’s goals, missions, and the ultimate vision.
It differs from traditional methods, however, by focusing more on the future than the past or present. That’s why I call it a Mutual Goals Review. It should be conducted a minimum of four times over the course of each year, and can use a formal or informal process in a one-on-one or even group setting.
Rather than focusing on how poorly an employee has performed during the previous year, the MGR should be an inspirational and productive gathering designed to strengthen the relationship between employer and employee. It should thus be designed to fulfill the distinct needs of both parties, and provide an opportunity to chart that employee’s continuing career path.
Chapter 11: Products – A Pillar of Business Success
Products and services are the lifeblood of any business, and are essential for any effort to become the best in class. Your goal should always be to create that sense of amazement in every customer you encounter, with product offerings that exceed expectations on a consistent basis. To develop products that can achieve those goals, you need to focus on the essentials.
That means gathering knowledge about the marketplace and your rivals. You must always remember that your ability to grab market share does not occur within a vacuum. Instead, you are almost always going to find yourself in direct or indirect competition with other companies who want your customers for themselves. Your ability to research your marketplace and your rivals will have a direct impact on how successful you can be in differentiating your offerings and earning customer loyalty.
You’ll have to do more than just bring your great ideas to life. In addition, you have to identify your unique selling point and communicate that information to potential customers. Furthermore, you have to ensure that you are targeting markets that offer the potential for sustained growth over time, and work to position your company and brand in a way that offers you the best opportunity to capitalize on what you do better than anyone else.
Chapter 12: Customers – A Pillar of Business Success
When it comes right down to it, there is no escaping the simple fact that every business owner has a boss – many bosses, in fact. Every person who buys your products or pays for your services is your boss, in the purest sense of the word. Because of that undeniable truth, your primary mission is always to find the most effective and efficient way to cater to those customers’ wants and needs. If you cannot do that, then nothing else will matter. Your company will have no revenue, and it will perish.
Your company structure, processes, and culture must be directed toward achieving the greatest amount of customer satisfaction on a daily basis. While much of that involves the quest for excellence in product development and manufacture, customer service can be even more critical. You must have plans in place to manage problems as they occur. The good news is that even bad customer experiences can be turned to your benefit if your customer service and problem resolution strategies are effective.
Customer satisfaction surveys should also be integrated into your systems. These surveys provide invaluable feedback that you can utilize to fine-tune your customer service protocols, and serve as beneficial tools for employee training. A well-designed survey, limited to no more than ten questions, can help you to identify potential problems early enough to institute needed changes. By properly utilizing these surveys and other information gathered from customer interactions, you can work to develop the type of customer brand loyalty that can dramatically increase overall customer retention and turn your most loyal customers into your most ardent promoters.
Chapter 13: Conclusion
I have a strong conviction that it is possible to significantly improve your odds of succeeding in business. It requires being passionate about what you are doing, committed to learning all that you can, and willing to do everything it takes to succeed in your business endeavor
What it takes is a relentless commitment to be better in every respect than each of your competitors. It is about having as your ultimate goal the objective of being the best in class with a mindset that originates from the top and reaches all the way down to the lowest level of the organization. It is about the top leadership’s ability to inspire and empower followers throughout the organization by genuinely desiring that every team member have a successful career path laid out in front of them. It is about inspiring everyone to work toward the goal of ensuring that every customer is delighted to do business with your company.
Above all, it is about succeeding as a team and knowing that everything is interrelated and connected. Every aspect of your business, both internally and externally, ultimately impacts every other aspect.
Always focus on their positive contributions with prompt acknowledgment and appreciation. Positive reinforcement is the most powerful motivator of them all, and one of the best ways to correct weaknesses. You need all of your employees to be protecting and promoting your best interest at all times.