As the year comes to a close, it is fitting to ask why some businesses have survived and others went by the wayside; why some businesses have done well during this downturn and others have struggled.
Some of the differences are in how a business is structured and operates and in other cases it is how the owner chooses to lead and manage. This assessment compares “the best” versus “the rest.”
The Best have strong business models. That means these organizations have clients, not customers. The best have ongoing revenue streams and strong relationships with clients. The relationship could be with the brand name, the products and services or the people that work in the business. The rest have the “hope is our business model” restated as “we hope customers do business with us.”
The Best create and work from a written plan. The plan is usually long term, strategic in nature, and includes an annual plan that all departments are responsible for executing. The rest have a semi-thought or poorly conceived plan somewhere in the owner’s head. This plan is impacted minute by minute by emotion, relationships, ability to communicate, level of trust, delegation skills, follow-up skills, a packed calendar and it relies on the owner’s memory.
The Best delegate appropriate responsibility to management for getting things done. This does not include giving away the keys to the kingdom (the company checkbook). It does mean that management is trusted and empowered to get things done to the satisfaction of the client within established guidelines. The rest suffer from ongoing underperformance because people lack the authority, responsibility and tools for getting things done.
The Best evaluate their people continuously. Performance reviews in the best organizations are scheduled and held; the people in these organizations know what is expected of them and they are motivated and incentivized to perform. When goals are achieved, rewards are given to reinforce performance. The rest don’t believe in performance evaluations because they take too much time, aren’t done well and don’t work. No one considers that the excuses for not doing these evaluations have any impact as to why evaluations don’t work.
The Best believe in “sharpening the saw.” From the owner on down, people are learning all the time. The better organizations see themselves as learning organizations. Continuing education is considered a sustainable competitive advantage. At the rest, learning is optional as in almost everyone opts out. The owner learns in the school of hard knocks and the rest of the employees suffer as a result; they are taught only what they need to know.
The Best don’t make or accept excuses. When something goes wrong, the best take responsibility, learn from what happened and move forward. The rest spend most of the time being caught up in the “blame game” pointing fingers resulting in punishment but not always of those responsible.
The Best focus on results. At the end of the day, the best understand that intention, action and activity do not equal results. Trying doesn’t count, either. The better organizations focus on results. The rest spend their time focused on everything that keeps people from achieving results.
The Best hire the best. Those companies that want to be the best hire the best; they pay more and reward more for higher performance. The rest hire those that aren’t hired by the best.
The Best have clear priorities. Everyday at the best companies people focus on the vital few things that matter. These organizations understand the key performance indicators and keep a sharp eye on those measurements. At the rest, most of each day is filled with working on the trivial many and nothing much gets measured. The clock is watched all day long.
The Best always try to find a better way. The best companies are never satisfied with how things are because they understand that to improve means they can continue to distinguish themselves for their clients and from their competition. The rest are satisfied with what they have; good enough is good enough. The rest don’t understand that fair, okay and good are the enemies of great.
The Best weed out poor and underperforming people at every level. The best companies know that allowing people who aren’t working to a high standard lowers the standards for every employee. High performing employees will soon resent the presence of those who are not keeping up and results will suffer as a result. The rest tolerate underperformers and poor performers.
Do you own one of the best companies or are you one the rest?
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