I’ve been asked many times to lay out my
magic formula for building a successful
small or medium-sized business. I
usually respond by saying there's no
magic, only hard work and experience.
While this is certainly true, the success of
a small or medium-sized
business depends on dedicated execution
of the following: articulating a clear
mission, hiring the right people, setting
goals and measuring progress toward
them -- and then resolving the inevitable
conflicts that arise.
The latter task is truly
the tricky part!
With that in mind, here are the five
ingredients in my not-really magic
formula for small or medium-sized
business success.
1. Develop a compelling mission. A
clearly articulated, compelling mission
attracts talent to the organization and
encourages strong commitment to the
team. It also acts as glue to keep
members of the team unified over time.
When formulating a mission, start with
the why not how. Why is the company
here? Why have other companies been
unable to solve the problem?
2. Find the right people. Locating
talented people with the right skills and
experiences is essential, but that's
the easy part. The hard part is finding
people with the right character traits. I
look for people who like working on
a team.
Many smart and successful people don’t
work well in teams, and it’s harder to
create a successful organization with
them, in part because as the organization
grows in size, conflicts become harder
and harder to resolve.
I also want to hire people who are
champions of change and with a natural
ability to establish plans, structures and
processes. These traits are critical
because people lacking them simply
won’t be able to support a rapidly
growing organization. Ultimately, it's the
personality traits of staffers (their
attitudes, beliefs and actions) and their
commitment to the mission that results in
a company culture that's capable of
fostering successful execution.
3. Set clear goals. The process of
creating long-term goals and short-term
objectives to support the mission is also
essential for successful execution.
Clearly articulating these goals helps
ensure that the people and processes
will be geared toward moving the
organization in the right direction.
Consider a school of fish or a flock of
birds: If the goal is to move from Point A
to Point B, no progress is made if
each individual creature moves in a
direction of its choosing.
In a workplace each member of a
company's team should strive toward the
same goals.
4. Measure progress. Setting goals
doesn’t mean much if its not possible
to measure progress in achieving them.
Attach specific financial, operational and
process-oriented performance targets to
specific activities supporting the
objectives.
Measuring these activities against the
targets offers a clear picture of the
progress toward the long-term goals.
Based on the picture that develops -- and
with input from the team and the
marketplace -- continually refine the
objectives, supporting activities and
measurement targets to ensure continued
successful execution.
5. Be prepared to resolve problems. No
matter how successful a company is in
developing a compelling mission, hiring
the right people and measuring progress
toward goals, problems will arise related
to strategy, execution and culture.
To tackle problems, I like to start with the
empirical data. I look at the progress
made toward the measurable targets to
determine what the problem really is. Is
there a profile of the customers not
adopting the company's solution? Are
partners not moving forward with the
company because of an unforeseen
problem? Finding empirical data points
can help in determine how big the
issue is.
Then I address the root cause. Did the
company not understand the opportunity?
Did team members not communicate
effectively internally or have the right
processes? Did the organization not
provide enough services to customers?
Has the competition successfully
countered the company's messaging?
With all the key stakeholders gathered in
a room, I ask them to write down what
they think is the problem's root cause.
We brainstorm for a while to be every
possible issue has been surfaced.
Then I
ask everyone to rate each suggested
cause on a 100-point scale. We focus the
discussion on areas of disagreement.
This process enables us to quickly
expose and address the biggest issues
first. This is contrary to the practice at
other organizations (focusing on
agreement and ignoring outliers).
But those who use this sometimes
difficult problem-solving process say it
can facilitate an alignment.
Ultimately, ensuring agreement from all
stakeholders about the approach and
encouraging their contributions are the
only ways to help an organization
efficiently execute its plan and produce
something better than what any other
company can produce.
ROBERT REID
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