In my experience, there are usually seven common reasons why businesses succeed and without these in place, businesses only survive, at best. When challenged around these points, many business owners or CEOs have assured me that they check all the boxes. While that may well be the case for some of them, the clarity usually ends at the boardroom door. Businesses are made, or not, by the teams who execute against the vision of the company.
Thriving businesses have the end in mind, and an example of this was in The Coca-Cola Company in the early nineties. The board decided that, while the company was in the business of refreshment, it was also in the business of providing shareholder value. The way in which this was communicated throughout the global organisation was pervasive to say the least. Digital ticker-tape signs in every office updated the share price every few minutes and the dollar value became the topic of conversation in the corridors and canteens. Unsurprisingly, the question "is the activity you are currently busy with adding or subtracting value?" was constantly being asked. The result was double-digit growth in the share price...
In this column I have highlighted the seven reasons why businesses succeed:
1. A clear and concise vision and mission which is communicated to and understood by all the stakeholders (owners, management, employees, customers and suppliers) in the company. This answers the question, "Why are we in business?"
2. A culture which meets the needs of the owners, the employees, customers and suppliers of the company. This definition of culture answers the question, "How will we conduct ourselves as we do business?"
3. A uniqueness that separates the company from its competition, thereby answering the question, "Why should our customers buy from us?"
4. Financial reserves such as ownership capital and outside lending resources, but most importantly, capital accumulated from a healthy stream of profits. The healthy stream of profits will attract ever increasing amounts of ownership capital and lending resources to help the company grow.
5. The ability to attract top performing people to accomplish the vision and mission. The really successful businesses do not depend on the charisma of any single individual, including that of the founder.
6. Dedication to the principle embodied by the Japanese word kaizen (never ending improvement), which means that even when things are going very well, successful companies strive almost obsessively to improve their product or service.
7. A focus on things that the company does well and the sense to recognise that doing some things well does not mean that the company does everything well.
Supplied by ActionCOACH Business Coaching KZN.