The Makings of Highly Successful Companies
Learning from the best
If there was a one model framework that can be applied, and if pursued will guarantee a chance of success for your business, will you do it? What is the secret sauce that separates the successful from the rest?
A Frame of Mind to Set You Apart
Having the opportunity to review hundreds of companies and deciding upon a model framework that works and at the end of the day and more importantly, deliver results. We have decided upon the framework that makes companies good to great from Jim Collins, with data sets of over 15 years and thousands of companies to finally determine the framework that works. He had a hand in guiding Jeff Bezos at the point of time when Amazon was on the brink of bankruptcy in 2002 to being one of the largest companies in the world and the richest man in the world.
So, let’s get started!
Here are the 5 steps framework towards success and building a great company.
1) Getting the Right People on the Right Seats on the Bus
People are the most important assets in any successful organisation. The quest for searching for the right people is an ongoing process and only having skin in the game, you will learn and improve. Two questions to know if the person is right:
- If I were to hire the same person again, will I do so
- If the person leaves, do I have a feeling of relief than a loss
These are the guiding questions to determine the criteria for the right people and then place them in the right places. The benefits of constantly reviewing and getting more right people at the right places will steer the business onto the road to success.
2) Face up to reality on your current situation and have an unwavering belief that it will work out eventually
What differentiates an optimist to a realist?
One is in denial, almost believing that doing the same thing works out eventually or the later, pragmatic and daring to face up to the facts, the brutal facts of reality.
This brings us to the point, the characteristics of leaders of bringing companies to greater success are those that are realist combined with the efforts of constantly improving and believing that it will prevail eventually translate to success for great companies.
Let the customer and sales tell you what to pay attention to. Only tuning into the frequency to the facts and the users of the products and sales personnel, only then you know the facts of reality and how to better improve your products and services. Review your current internal processes and question, how can we have internal processes and operations streamlined like McDonald’s.
3) Finding the Sweet Spot
Any existing or new products or service, this is the key process principles that need to be considered before pursuing it.
- What deeply drives you and what you care about
- What can you be the best in the world in
- What drives your economic engine (a unit of measure to quantify)
Case studies of Great companies that stayed true to these 3 principles
2) Best at: Best in Products that lowers the cost of Healthcare
3) Economic Engine: Profit per Employee (which translated to cost-effective healthcare)
The bottom quartile of the market that depended on its cash cow erythromycin, Nepotism(family run)
Outperformed the market growth by an average of 4 times for 15 years and 30 Billion in revenue in 2018
2) Best at: Best in Paper-Based Consumer Products
3) Economic Engine: Profit per Consumer Brand (lesser reliance on cyclical seasons)
A fledging paper mill company
One of the largest paper-based consumer products producer in the world. Outperformed the market growth by an average of 3 times for 15 years
2) Best at: Most Convenient Drug Store
3) Economic Engine: From Profit per Store to Profit per Customer Visit (having sustainable economics and increasing profitability across its entire system)
A small food front store
The second largest pharmacy store, Outperformed the market growth by an average of 7 times for 15 years
It may be tempting to take on every opportunity that comes by, but to stay on track leads to better consistency and headway to discover what actually produces superior returns for you and your business.
4) The Culture of Discipline
The key here is disciple, is the most crucial factor in holding it all together.
According to George Rathmann, formerly from Abbott, applied lesson learnt from the disciplined culture in Abbott to his entrepreneur journey building a USD128 billion size company and the 7th largest biotech company in the world.
According to George, when you set your objectives for the year, it’s something decided and can’t be changed. The next step is taking the plan and measuring yourself against it. Don’t readjust to make yourself look good or no matter how tough the measure, keep to it and look at what you have achieved against your goals.
Dave Scott, a world-class athlete, 6 times champion of the Hawaii Ironman Triathlon. In training, he would ride his bike for 120km, swim a distance of 20km and run for 30km on average every day. And to demonstrate the level of disciple and mental strength that sets him apart, he would adhere strictly to a low-fat high carbohydrate diet that gives him the extra edge. With the training regime that Dave has, he could easily lose 5,000 calories a day, but it’s having that commitment to be disciplined and not leaving anything to chance.
5) Constantly rotate the wheel and tap onto the momentum force of success
Imagine a large wooden wheel with a knob. You begin to rotate it, with much resistance at first, but the resistance diminishes gradually as you continue. You get better at the motion of rotating the wheel and it becomes easier tapping onto the momentum force or prior efforts. That is how the principles have to be applied consistently for it to be effective.
Practice and constantly review the elements;
1) Getting the right people in the right places,
2) Face the facts and believing,
3) Locating the sweet spot for your business,
4) Set a plan and have the disciple to follow through, and
5) Consistently repeat the process diligently
Start evaluating and see how you can begin mapping the points across your business. Let the momentum bring you forward to greater heights. A key point to note is to follow the points according to the flow of sequence and in due time, you will see yourself in the ranks of being one of the top companies in the world and a leader in your field.
The framework above is an adaption from the research done by Jim Collins and his team over thousands of companies with data sets of over 15 years to determine the framework that works and for the manual on Good to Great. He also had a hand in guiding Jeff Bezos during the time that Amazon was on the brink of bankruptcy in 2002 to being one of the largest companies in the world and the richest man in the world.
Posted on June 6, 2019, by Stephan Yeong
Jeff Bezos reveals what it is to build an empire and being the richest man in the world, 19 Feb 2019
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