Critical factors for business success
The business landscape is going to change drastically in the next five years. Many businesses are going to falter, even household names, and many little known businesses are going to succeed. We are now seeing the powerful impact the internet is having on any business. Here are 7 important factors for business success in this new and tough world economy. Even during economic crisis businesses that pay attention to the following will fundamentals will prosper.
1. Leadership, vision, and deep knowledge of the business. Leadership has never been so critical like now. Everything rises and falls on leadership. It is during tough times that the real leaders emerge. A clear vision is critical to avoid doing the unnecessary or the wrong things. It is critical to keep both eyes on the horizon for the waves of changes. It is critical to know what the core of the business is all about. Everyone ought to know these things, not just the leadership and management of the company. Transparency is an absolute must.
2. Deep knowledge and control of finances. In a difficult or unpredictable business environment it is critical to avoid overleveraging the business. Excessive debt, even at low interest rates, works against the ability to invest in the right things at the right time. Cash is king during difficult economic environments.
3. Development of people. This is probably where most businesses get a D or an F grade. It is critical to recognize and reward the right talents and skills. In businesses today there is a lot more talk than do when it comes to succession planning. With many baby boomers retiring, the next few years are going to be challenging for many businesses to attract and retain top talent. It is critical to invest in people development, not just in training. Training deals a lot more with learning the practices from the past to the present. Development deals a lot more with preparing people to lead into the future.
4. Development of systems. The critical processes and components of what makes a business succeed must be identified, documented, and understood by those running the business. Stay away from documenting bureaucracies and faulty processes in the business. Stick to the core and do it superbly well. Robust systems can withstand tough economic environment.
5. Service to clients and/or customers. There is no question that the quality of service in many businesses has declined in the last decade. In the age of smart consumers no one can afford to lose the precious consumer loyalty; it is costly or even impossible to get it back once lost. Have you tried to connect with a business consumer hotline lately? No wonder it is called a hotline! Either machines keep you going from voice to voice or human to voice and voice to human before anything can be resolved. At least some businesses are putting English speaking people to answer the phones. I am not even going to get into the customer services through websites.
6. Boost trust, ethics, compliance, and culture. Yes, a great business can still be built on character and integrity. It is common for businesses to fail because of lack of leadership and vision and the common reasons are trust erosion, shady practices, and lack of compliance to the fundamentals of running a great business. Organizations talk a lot about their cultures but have done little to make it better; it takes great leadership to do that.
7. Keep one eye in the leading indicators and another on profitability. The eye on the bottom line is important. What is even more important is the eye on the leading indicators, those that lead to new products, new customers and new sales besides the existing customers and existing sales. Keeping a watch on the budgets is important, but the great businessman never forgets that sometimes a budget can be bad for business, especially during times of change and great opportunities. A full understanding of risk is critical during this amazing times we all live in now.
Thank you for reading and reflecting on today’s nuggets. Please share with others.
Be blessed and be a blessing to others
Author of the book Priceless, Co-author of the book Follow to Lead
"The future belongs to those who can see and pursue opportunities before they are obvious."
"Those that take swift action will always leave those that don't breathing the dust."
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