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Posted December 3, 2007 by johnspence

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For the past five years I’ve been working hard, preparing to write another book. As part of my research, I’ve read literally hundreds of books, articles, and research papers on the key strategies of the world’s top companies-many of which, I am honored to say, are current clients of mine. I’ve done all this work to see if I could uncover a pattern of business excellence. At last count, I have read and analyzed about 140,000 pages on best practices and winning strategies, and condensed this information to a single page of bullet points. Yes, that’s right-one single page! While I am not going to go into a lot of detail here (that, after all, is the purpose of my next book), I’d like to give you a glimpse of what I’ve learned.

At the foundation of all successful businesses and business strategies lie a few givens, the first of which is that, at the very least, you must produce a high-quality product or service. If what you sell is not worth buying, no amount of good ideas, cool strategies, or slick marketing will help you. All sustainable business success is built on delivering real value to the customer-period.

The next given is that you need to have a solid handle on your financials. I love the old saying that if you aren’t managing cash flow, you won’t be managing much for long! Even great companies-companies with amazing products, outrageously good services, loyal customers, and fantastic strategies-have been reduced to ruin and driven to bankruptcy by poor financial management.

The last given is that change is inevitable. There is no single strategy that will carry your company forever – just ask my buddy Tom Peters, who wrote the fantastic book In Search of Excellence back in 1982, only to watch half of the companies he highlighted go out of business! Markets shift, consumer preferences change, new competitors appear, technology advances-and so must you. Even though I can recommend which strategies I believe deserve your attention, there is no guarantee that these same strategies will still be relevant in 20 years-or even two years!

With all of that said, below are the six strategies on which all the great companies I studied were relentlessly focused.

1. Vivid Vision : a clear and well-thought-out vision of what you are trying to create that is communicated exceptionally to everyone involved.

I have had many leaders tell me that they don’t believe in “the vision thing,” or that they don’t have time to work on something so vague. Folks, nothing could be farther from the truth! A vision is not some meaningless schlock that you throw together on a two-day retreat and post all over the office, never to look at again.

A true vision is an exciting, focused, realistic, and inspiring picture of what you and your people are all trying to accomplish together-it’s the reason you come to work every day, the impact you want to make on the world, the kind of company and product you aspire to build. Your vision does not have to be a Nobel Prize-winning masterpiece of literature; it simply needs to be something that everyone can clearly understand and about which people are damn excited. When I put it that way, believe me-you don’t have time NOT to sit down and create a vision for your business.

2. Best People: superior talent who are also masters of collaboration.

I have been jumping up and down about this for years, but very few businesses actually understand the importance of this idea: The future of your company is directly tied to the quality of talent you can attract and keep.The second part of this strategy is that talent that does not play well with others is not talent. Your top people have to be just as good on teams as they are on their own.

I simply cannot stress this point strongly enough-the companies that survive and thrive in the future will be the ones that treat talent acquisition, development, and retention as a major strategic imperative.

Let me make one other important point on this topic: If there truly is a war for talent, then you need to BE talented, or you might soon be unemployed. If you are not constantly improving your skills, gaining new insights, and finding new ways to add value to your company and customers, there is a good chance that your company will find someone else who will do these things.

3. A Performance-Oriented Culture: that demands flawless operational execution, encourages constant improvement and innovation, and completely refuses to tolerate mediocrity or lack of accountability.

I have heard this more than once: “John, after being through your class, I now realize that I have a few mediocre people in key positions in my organization and that every day I leave them there, they have a negative impact on all of the people around them.” This is a difficult situation to admit, but an issue that plagues many of my clients. These managers talk about excellence, the importance of talent and “people being our most important asset,” but then they look around and realize that they are not truly living up to that goal.

What is even more devastating is the impact that acceptance of mediocrity has on your truly top people. When someone is superbly talented and honestly committed to excellence, but looks around and sees other people doing mediocre work, turning things in late, leaving early, and getting the same pay and benefits as the top talent, one of two things happens. Either your best people leave, or they simply give up and lower their standards to the level of the slackers. Why? Because they know their leaders are not serious about excellence, so why should they be?

Here is a great saying that cuts to the heart of this problem:

“Once you start accepting mediocrity in your life, you become a magnet for mediocrity in you life.”

Great leaders do not tolerate mediocrity. They set clear, ambitious, realistic goals and high standards of performance, and then hold people 100 percent accountable for meeting those standards and delivering on the goals. Refusing to accept mediocrity isn’t easy and takes a lot of discipline, but it is also the only way to build a world-class organization.

4. Robust Communication: open, honest, frank and courageous, both internally and externally.

Poor communication is now the single biggest problem I deal with in client organizations worldwide. Why is this? Well, for starters, communication is insanely complex. I won’t jump through the math here, but as soon as you get more than three or four people in an organization, the number of possible connections in the communication web mushrooms exponentially. When you get 40 or 50 people in an organization, the opportunity for miscommunication becomes overwhelmingly vast. Frankly, it is amazing to me that anything ever gets communicated well in large organizations.

How do you solve the problem of poor communication? You must make superb communication a top priority by focusing on it, training heavily in it, measuring it, and rewarding those who do it well. Being a truly good communicator is a skill that can be taught and learned. It takes practice and hard work, but with time, it is possible for people to greatly improve their communication skills, and so improve the effectiveness and overall quality of communications within organizations.

5. A Sense of Urgency: the strong desire to get the important things done while never wasting time on the trivial.

For the past three years, I have been invited to be a guest lecturer on strategic thinking at a special event at the University of Pennsylvania’s Wharton School of Business. Typically, I have about 120 senior executives in my class. During the session, I ask them: “What percentage of the time do companies that have a clear vision and a specific plan to achieve that vision effectively execute to that plan?” The answer I get most often is 10 to 15 percent of the time. Wow, that is scary!

Failure to execute to plan is one of the biggest issues I face in all of my consulting and training assignments. It is what we refer to in our firm as the knowing-doing gap. Companies know what they are supposed to do, they understand what it takes to succeed, they have a solid plan-but creating a performance-oriented culture of disciplined execution that can effectively implement the plan seems to be a challenge that few companies can meet. If that were not frustrating enough, the financial implications of this failure can be staggering. Inability to execute to plan is likely responsible for the overwhelming percentage of lost revenues in most large organizations.

The remedy for this failure is simple, but not easy; the only cure is process. The leader must implement a detailed system-a defined and repeatable process for identifying, clarifying, prioritizing, assigning responsibility, implementing, reviewing and rewarding against specific goals and high standards of professionalism. Consistent and effective execution does not happen by chance.

6. Extreme Customer Focus: owning the voice of the customer and delivering what customers consider truly valuable.

I think that customer focus is the only real competitive advantage left to businesses. In today’s Internet-driven world, location often means nothing. Everyone has access to capital. Technological advantages sometimes last only days. Scale is meaningless in many businesses. Almost every product category is being driven toward commoditization. The only things you have left that truly differentiate your company from other companies are the quality of your employees and the level of service they deliver to your customers.

The organizations that can deliver consistently superior customer service will dominate their markets. These firms will build an army of extremely loyal customers who are willing to pay more for the increased service, and will tell everyone they know about their positive experiences. This, my friends, is the future of business.

As I write this, these are the top business strategies that are continually being discussed, both in business books and in conference rooms. I might end up adding one or two more ideas to this list, but I can tell you with confidence that after more than 100,000 pages of reading and 14 years spent working with some of the most respected businesses in the world, these six strategies stand out in bold relief.

When I first looked at this list of strategies, I was more than a bit disappointed that it was so similar to the six key characteristics of outstanding leaders I’d outlined in my first book, Excellence by Design: Leadership. I wanted to find something totally new, to be able to come up with a list that no one had ever seen before-but that would be impossible. It was inevitable that the two lists would be similar, simply because great leaders focus on these same things to build great companies. If having a vivid, exciting and well-communicated vision for the future of the organization is fundamental to business success, then it stands to reason that creating and communicating that vision must be fundamental to successfully leading a company.

Now, here is your challenge: Review the six key strategies I have listed above, and give a brutally honest score between 1 and 10 for how well your company is actually implementing these strategies every single day.

  • If you have the strategy nailed and are honestly world class in that particular area-give it a 10.
  • Very good, but with room for improvement-score a 7.
  • Sometimes you do this thing well, sometimes you do it poorly-get a 5.
  • Every now and then you are able to deliver on this strategy, but most of the time you do not-that’s a 3.
  • Looks nice on paper, but we almost never focus or deliver on that strategy-you score a 1.

Anywhere you scored seven or below needs some attention. Anything at four or lower is an emergency, and needs lots of attention right away.

So there you have it, my gift to you: homework!

I am sure though that by now you understand that is your role as a leader: to work hard, to stay focused, to tell the truth, to help people succeed, and, most importantly to serve – to serve your customers, your shareholders, your communities and, at the very highest level, to serve your employees.

Leadership is not power or position; it is has nothing to do with title; it does not come automatically with seniority. Leadership is an obligation to be a living example of integrity and service, of competency and concern, of honesty and love. That is true leadership.

I very much look forward to your comments on this blog. Please send a link to it to anyone you know who might find value in these ideas because the more people who get this information, the better.

I wish you great success — John

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