by PETER CHRISTIAN
I have worked in industry for over 40 years. I started in large companies in a variety of positions. These included both managerial and executive. I then worked with a consulting group out of Lehigh University, before starting my own business consulting company.
In this time, I have worked with and for over 300 companies in a variety of industries. There are differences in size, resources, and locations. But I have found that the heads of the successful enterprises, used the same or similar practices. Those that didn’t, struggled. In certain instances, failed and some are no longer in business.
So, what are these things that differentiate successful from unsuccessful businesses? For starters, successful businesses and owners demonstrate the following characteristics:
1. They show honest enthusiasm for the current and future operations. They look for ways to make their company better.
2. They have an openness to know when things need to change and a willingness to do so.
Startups and early-stage firms are sometimes the most difficult to deal with. The owners are technical experts in what they do. But they start their business without any formal training or experience in management practices and principles. As a result, many small businesses fail in their early years. This is not because of weakness in their product or service concept. It is because the business was not properly managed in the back office.
If they overcome this obstacle, the next difficulty is when the business grows to a certain level. Now, their management techniques must change or the business will run into trouble. This usually occurs at $1-3 million in annual sales and with 5-15 employees.
At this point, the owner or manager must evolve or change from a manager of things to a manager of people. They cannot be only a technical expert but must also become a strategic thinker.
This can be difficult because they may have over time developed bad habits. Mostly, it is due to failure to grow as an owner and to realize they no longer run a small enterprise. It is now larger and more complex and needs other skills and tools.
After these two instances in a business’ life, there will be new challenges. These may include business downturns, new competition, or the need to add new products and services. The owners and executives must deal with each of these timely and thoroughly. Otherwise, major problems can ensue.
Regardless of where a business is in its evolution, there are certain practices that the owners and executives exhibit that drive them to success. These are:
They have developed personal characteristics that are exhibited in their business.
The heads of the business have a positive attitude towards their business and life in general. They are committed to the business and its success. As it grows, they hire competent and like-minded individuals who can help the company to prosper. They move their business ahead. They are dedicated and persistent in making this happen.
They have developed a business blueprint called a Strategic Business Plan. It clearly describes the business concept, its mission, and the philosophy of the business.
As the old saying goes, “When you don’t know where you are going, any path will get you there.” This is especially true in business. All astute owners and executives have a long-term plan (3 to 5 years) that is then broken down into annual plans. These are followed religiously and adjusted as needed. The longer-term plans are updated every two to three years. This is based on progress and changes in the economy and the business itself.
They have developed an organizational structure that functions as a well-oiled machine.
This includes formal policies, procedures, job descriptions and a defined organizational structure. All employees are encouraged to perform to their utmost capabilities. Those who do are rewarded in proportion to their contributions. Those who don’t are disciplined appropriately. Performance is routinely measured and mentoring is provided. Training, job enrichment programs, and incentive compensation plans are offered. Participation in them is encouraged.
The owners and executives keep track of everything and manage by the numbers. They delegate various duties to the employees and avoid micromanaging them. They provide the necessary tools to allow their people to properly do their jobs. The work environment is conducive to productivity and personal growth.
They have developed well-functioning operational support systems.
These are both financial or non-financial and may be manual or automated. The systems support and make efficient all the activities of the organization. They relieve the management of many routine activities. This allows the owners time to be strategic thinkers. The information provided by the systems includes sales, cash flow, and financial performance data. From these timely actions can be taken as changes and issues occur.
In summary, the common practices of successful business owners and executives, with companies both large and small are:
- They have developed personal characteristics that are exhibited in their business.
- They have developed a business blueprint called a Strategic Business Plan. It clearly describes the business concept, its mission, and their philosophy of the business.
- They have developed an organizational structure that functions as a well-oiled machine.
- They have developed well-functioning operational support systems.
These are the attributes of successful companies, their owners, and their leading executives. Hopefully, you are following these. If not, it is advisable to do so as quickly as possible. Your company’s success depends on it.
Peter H. Christian was a founding partner and president of espi, a business consulting firm in Northeastern PA. Previously he was an Executive at Crayola Corporation.
He has worked with 300+ clients in business development, profit improvement, operations, IS selection and implementation, and project management. He has 40+ years of experience in strategic and facility planning, CI, lean, and supply chain. He has helped companies to realize millions of dollars in cost reductions and profit improvements adding and retaining thousands of jobs.
He has authored the Amazon bestselling business book, “What About the Vermin Problem and is published in a variety of professional magazines.
