The Formula for Business Success

The Formula for Business Success

This article originally appeared on OPEN Forum. Visit www.openforum.com for more tips on how to achieve business success.

To me, the absolute most powerful marketing strategy is to run a really great business that your customers love and tell all of their friends and family about. All the ads and social media effort in the world cannot overcome poor quality or lackluster customer service. That is why for the past 17 years my career has focused exclusively on studying the fundamental elements of business success.

Traveling worldwide at upwards of 200 days a year, I have worked shoulder to shoulder with some of the best (and worst) business leaders of our generation. I've also maintained a strict regimen of reading a minimum of 100 business books a year since 1989. In preparation for writing my book Awesomely Simple, I compiled all of my research and reading down to a single page that I called my “Strategy Map.” This single piece of paper represented more than 175,000 pages of reading on business excellence and an additional 5,000 pages of interview notes and survey results from my work as a consultant and trainer. I then took all of that information and tried to uncover the pattern… the formula for business success. Well, here is what I came up with:

(T+C+ECF) x DE = Business Success

Let me take you step-by-step through the elements of this equation.

Talent

You need the brightest, most talented, values-based people you can possibly get on your team. Here is the truth: “The success of your organization is directly proportional to the quality of the talent you can attract and keep on your team." I recently had the great honor of having lunch with one of America's wealthiest and most successful entrepreneurs, a man who started with nothing and built it into a multi-billion-dollar company. When I asked him what the single most important piece of business advice he could give me was, he smiled and said, "It's all about people, people, people. You can kid yourself about a lot of things in your business, but at the end of the day it's always going to come down to the quality of your people."

Culture

Many people used to feel that "culture" was sort of a touchy-feely issue, a “nice-to-have” but not a strategic issue. Nothing could be further from the truth. If the success of your business is truly tied to the quality of the talent you can attract your team… culture is key because highly talented people want to work with other great people, doing cool and meaningful work at a company that treats them with respect. Trust me, you cannot have a winning company without a winning culture.

Extreme Customer Focus

Let’s face it, about the only sustainable competitive differentiators left to most businesses today are the quality of your people and the quality of your customer service. Competitors can copy your products, they can copy or beat your price (there's always someone willing to go out of business faster than you), they can copy your distribution channels, they can reverse engineer your technology, they can put a location directly across the street… they can copy just about everything but who you have on your team and how your team treats the customer. Therefore, building a culture of extreme customer focus, where your organization "owns the voice of the customer,” is one of the surest ways to control the marketplace.

Disciplined Execution

Lastly, you combine the first three elements: Talent + Culture + Extreme Customer Focus… and then you work like crazy to get your entire team to execute with discipline. For the past seven years I have taught a class on strategic thinking at the Wharton School of Business at the University of Pennsylvania. Each year I have about 100 senior executives attend my class, and every year I asked the same question: "What percentage of companies that know how to succeed in the marketplace, that have a great strategic plan… effectively execute their plan?" Year after year the answer is the same: 10 to 15 percent. It does you no good whatsoever to hire great people, create an amazing culture, and do a superior job of listening to your customers -- if you cannot instill a high level of disciplined execution so that your great ideas are turned into massive action.

So there you have it, the pattern of business excellence: Talent + Culture + Extreme Customer Focus multiplied by the power of Disciplined Execution. It is my firm belief that if you take this equation and follow it with vigor and commitment, you will see a strong positive impact on your business.

John Spence, Managing Partner, John Spence LLC, leads business training seminars and gives speeches for clients around the globe. He is also the author of “Awesomely Simple – Essential Business Strategies for Turning Ideas into Action” which won the Reader’s Choice Award at Small Business Trends as one of the Top 10 Small business Books of 2009.

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