Part 3 – Ten Tried and Tested Business Fundamentals for Success
For the last two weeks, we took an old English rhyme “Something Old, Something New, Something Borrowed, Something Blue, And A Sixpence in your Shoe.” and applied it business. We started by examining the old – but valuable – marketing strategy of PR to promote brand continuity and investigated a new, related marketing trend called Brand Journalism that is helping customers connect to businesses in a new way. Then we borrowed the strategy of Corporate Giving as a way to help businesses connect with and engage consumers.
However, sometimes the smartest thing a business can do is go back to the basics. Despite the many changes in technology, communications, and marketing over the last 25 years, the fundamentals of running a sound business remain unchanged. This week, we’ll look at some ‘true blue’ business practices essential to any organization. These ten strategies are a must for long-term business success.
1. Plan thoroughly
Planning is a way of thinking. It gives form to chaos; shape and certainty to an uncertain and rapidly changing environment. It prepares you for answers and actions before questions are asked or situations present themselves. Planning is the foundation for action. Thriving businesses are built on a solid foundation of planning.
2. Guard time jealously
Time is often the scarcest – and thus scariest — resource for any business. To maximize success, business processes must be focused around maximizing this perishable resource. Be ruthless with time but gracious with people.
3. Hire top talent
The most talented employees are different than average performers in that they consistently exceed expectations. Top performers are motivated, have team skills, and consistently achieve results. When a top performer takes a great job that fits perfectly with his or her needs and aspirations, it’s unlikely that person would even consider changing jobs. That person will typically be on a steep learning curve, making an impact, and is highly satisfied with the current work and the potential future opportunities. Although it is not easy to find top talent, the most successful companies, such as Southwest Airlines, know it is worth the effort and are willing to spend more to hire the best.
4. Empower staff to act boldly
Successful businesses offer work environments in which people are empowered, thus maximizing productivity, efficiency and effectiveness. They don’t hobble staff by limiting tools, information or not being allowed to act. They help them feel they are part of something bigger than themselves and their job by sharing the organization’s overall mission, vision, and strategic plans. They trust the staff’s intention to do the right thing. They reward and recognize work. They know that under-compensated, under-titled, under-noticed, under-praised, and under-appreciated employees seldom give the discretionary energy that drives employees to do great work.
5. Increase employee retention
Successful businesses know that retaining quality performers increases productivity and improves morale, while reducing the associated costs of turnover. Turnover analysis reports continue to show that the cost of unwanted turnover can be 1.5 times the employee’s annual salary. However, the greatest cost is in lost business and productivity. Employee retention begins the day an employee is hired. A solid orientation or onboarding program is key to long-term employee retention. That is followed by regular opportunities for employee training and development as well as a compensation system that is both competitive and equitable. There should also be opportunities for recognition and advancement.
6. Provide six-star client service
What sets apart six-star hotels from the five-star ones is anticipatory service. It is the level of service in which the business stops asking customers what they want and stops providing customers want they want after they ask, and instead starts anticipating and fulfilling the client’s needs before the client even experiences the need. Anticipatory service is what every business should strive to achieve. According to companies that excel in customer service, including the Ritz Carlton, Nordstrom and Federal Express, world-class courtesy was defined as using exceptional manners, as interpreted from the customer’s perspective, to exceed the expectations of the customer. How customers are treated is often the difference between organizations that succeed and those that fail.
7. Adopt sound accounting practices
Successful businesses, irrespective of size, have a sound accounting system. It is understood that financial information is important to both accounting-related and non-accounting –related personnel. Budgeting information allows departments to plan wisely. Like the human heart in a body, its failure eventually causes other systems to malfunction and shut down. Data about prices, suppliers, customers and inventory is important. Proper records and filing system will help entrepreneurs in term of getting the required information quickly and easily, which allows for good planning and sound decision-making. It also helps to build trust and confidence from suppliers, facilitates the loan-approval process, and helps paint an accurate picture of the company’s financial health. Accurate and updated records of profit and loss, cash flows, sales, purchases and expenses enable entrepreneurs to know the actual position of their business.
8. Focus on marketing
In many industries, it’s not uncommon for companies to have achieved annual revenues of $5, $10 or even $20 million, without devoting a certain percentage of their budget to marketing. Such companies might have a brochure, a website, and exhibit at a few trade shows each year. They may even print an ad once in a while. They do the bare minimum. The mind-set is usually that the only real way to build a business is by putting salespeople in front of prospects. However, marketing is invaluable for the long-term success of any business today and in the future. It allows prospects – who might not otherwise ever learn about the existence of a company – to become aware of its products or services. Marketing’s span is much broader than sales can ever be. Given the global reach of technology today, there is no limit to the audiences marketing can nurture. Marketing also brands the organization and helps influence client behavior. Likewise, it helps to establish and building relationships with clients.
9. Pay attention to details
Unlike an accounting system, marketing plan or HR onboarding program, ‘attention to detail’ is not a strategy that is relegated to a specific department or person. It applies to everyone in the company, but most especially the leadership. As Sir Richard Branson, President and founder of Virgin Atlantic and Virgin American Airlines, explained in an article penned for Entrepreneur Online, once a business opens, it is time to deliver on the promises. As he put it, “… the only difference between merely satisfactory delivery and great delivery is attention to detail.” How is that ‘attention to detail’ achieved across the board? Sir Branson’s suggestion was that “Anyone who aspires to lead a company must develop a habit of taking notes. I carry a notebook everywhere I go.” He also advised business owners to “keep in mind the company’s core business values, the medium-term strategic considerations and where the industry is headed in the long term. Make your decisions on the micro level in light of that bigger picture.”
10. Reject complacency and false urgency
Complacency is defined as “a feeling of contentment or self satisfaction, especially when coupled with an unawareness of danger or trouble.” Complacency in business kills real urgency and can ultimately kill a business. The complacent hurt business unintentionally. The complacent do not alertly look for new opportunities or recognize hazards facing a company. They pay much more attention to what is happening internally than externally. They tend to move at thirty miles an hour even when fifty is clearly needed to succeed. They rarely initiate or truly lead. Most of all, they always do what has worked in the past. Complacency is almost always the by-product of success or perceived success and can live on long after great success has disappeared. Successful businesses never allow complacency to go unchecked. Likewise, false urgency can be equally damaging to business but is very different from complacency. While complacency embraces the status quo, false urgency is filled with new activities. Unlike complacency which has a sort of sleepy quality, false urgency is filled with energy and anxiety. Though false urgency can create activity, it is unproductive activity that drains staff and steals time from strategies that have real value to the business.
The final true blue strategy for business success is obvious: hard work. It’s been said that success is 10% inspiration and 90% perspiration. And while there is also a saying that advises to work smarter, not harder, work is still required. There is simply no substitute for sweat equity. So work hard, work smart, and follow these sound business practices. By consistently following these strategies that have been tried and tested for many years, any business, department or division is bound to achieve success …. in 2012 and beyond.
Quote of the Week
“In the business world, the rearview mirror is always clearer than the windshield.” Warren Buffett
© 2012, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.