Business Practices That Breed Success
John is the CEO and founder of Knowledge Fulcrum, a business that provides organizations with information, tools and resources that help them better inspire their people, align their efforts and empower their staff. You can reach him at [email protected]
For 15 years, I have been interested in understanding which business practices are most important to maintain organizational health, and which practices result in a higher level of success. Two years ago, I conducted a study among businesses in all industries, one that identified seven key areas of business operations most closely tied to success. In this case, “success” refers to those organizations that experienced higher-than-normal growth and profitability rates. Here is what I learned:
Setting and Selling Your Vision
I found that organizations who have effectively developed a clear core vision or purpose—and who communicate it to their employees, customers and partners—are more likely to experience higher levels of success. These organizations tie their visions to tactical goals and include some component of employee compensation and reward to the achievement of those visions.
Establishing Organizational Rhythm
Those companies who have established a natural rhythm through concise meetings or huddles, and who include employees from all levels of the business, are more likely to succeed. These daily huddles include communicating key performance metrics and other data, as well as a discussion on what’s not working. This rhythm allows employees and management to react more quickly to issues and implement corrective measures.
High-performing companies have created systems that allow them to gather and implement ideas that are generated across all levels of the organization. The entrepreneurs behind these businesses support their employee-improvement programs by integrating improvements into training and support systems, as well as rewarding and compensating their employees when they generate and implement improvements.
Through my research, I discovered that alignment within the organization is better achieved when key processes and steps are well-defined and documented, and when there is a clear understanding of how value is delivered to the customer. This provides a collective knowledge across all levels of the business, and it helps everyone see where value is added and waste exists.
Use of Standards
I have found that the most successful companies use standards to control variability within the work place. By effectively documenting how the work is done and regularly auditing work to ensure standards are consistently used, business owners can confirm that the variability in output is minimized, allowing the organization to run more smoothly. This includes areas of the business focused on non-production items, such as finance and sales.
Adopting Visual Aids
Those organizations that use visual systems and signals are better able to control their businesses. They are also able to see quickly when something is not performing as expected. These visual systems allow for the collection of performance data on a real-time basis, and they provide an analytic perspective so that trends can easily be identified and improvements implemented.
Finally, organizations that are more effective at designing systems and standards for solving problems perform better than those who use ad hoc methods for solving problems. By systematically identifying the root cause of and the probable solutions to the problem, employees report a higher level of job satisfaction, which results in lower turnover and higher employee morale.
Since conducting this research, I have used what I learned in my companies, resulting in a highly engaged, aligned and empowered workforce that produced improvements of 28 percent or more in just a few weeks. Ultimately, I have found that the survival of one’s business is directly related to the overall health of that business, and that the most important lesson is the journey, not the destination. Building a business is never easy, and building a world-class business is even harder. By applying what I’ve uncovered, I hope to build a successful future for my business, one lesson learned at a time.