A Business Checkup: 5 Statements for a Sustainable Business
October 2, 2015
After having spent 35 years in various people leadership and profit management roles I have taken some time to personally reflect on the critical elements of a successful business of which I believe have a universal business application. In total, there are five key areas that form the basis of a sustainable business operation; customer relationship, people, leadership, teamwork and stakeholder interests.
At the end of the day, unless a company is prepared to acknowledge that the “customer is king” marketplace gains will be small and your company’s reason for being will eventually wither away. If you stop and think about it, top-line revenue is, simply put, a function of how customers reward your business for what it is you do to add value to their business. Therefore, failure to keep the customer’s needs front and center within your organization has the potential to detract from the overall value proposition and eventually render your business bankrupt.
I have seen this happen in a very gradual way and I have seen this happen almost overnight. Customers make it possible for your company to pay all of its bills and have something left over for dividends or reinvestment in the business. So if a company has an interest in sustaining its future in a self-contained manner then it is important for the entire organization to acknowledge that, “Customers are our future.”
People come in all shapes and sizes and no two are identical in their ability to add value to the primary business thrusts of an organization. Every person enters your business with a collection of unique experience, abilities, knowledge and ambitions. What are the chances that each prospective employee will arrive with the appropriate competency, value system and character ethic to propel your business towards the realization of its vision through the collective achievement of its mission?
The goals and objectives of every business need to be internalized by the workforce on an individual basis. Individuals then need to consider how best to apply their unique attributes to advance the cause of the business which includes both personal contributions as well as shared contributions that are derived through a positive engagement with others. This places a heavy emphasis on the recruiting activities of the organization as well as the follow-on training and development of the workforce. Make no mistake about it, “People are the primary determinant of success.”
Whether we look at governments, businesses, social groups or sports teams, one thing is certain - each one of them has a leader that is propelling the vision forward and influencing the actions of the assembled body of people within the group. Much has been written about leadership in terms of the attributes needed within an individual in order to achieve success in any given role.
From my perspective, the single most important skill a leader can exhibit is the individual’s ability to define the future in such a way that the followers can internalize the vision and then deploy themselves to transform the stated vision into reality. The leader must be able to communicate his or her vision in a way that is both comprehensible and believable by the entirety of the workforce. If an organization is ever going to succeed in the achievement of the leader’s hopes and dreams, then the employees must share those same hopes and dreams. Harnessing the experience, ability, knowledge and ambition of the entire workforce will produce results that are much more likely than the leader can achieve on their own. A sustainable business necessitates a powerful visionary as, “Leadership provides direction.”
It is often said that, “one of us is not as good as all of us.” The truth is that there is strength in numbers. In the world of distribution this is absolutely the case. Customer needs are satisfied and hopefully exceeded when the entirety of the workforce comes together to achieve the intended result. Whenever a source of conflict arises, it needs to be considered as an opportunity to strengthen the business. At the root of any conflict lies a contrasting viewpoint. That is to say that whenever an individual, team or functional group riles against the approach taken by another individual, team or functional group there is a force created that tends to repel.
What if that force could be transformed into a force that attracts the holders of the opposing force or view point? In marriage it is often said that, “opposites attract.” Is it possible that organizations could become more successful if the points of conflict or disagreement could be worked proactively to move the entirety of the organization towards a consensus view … a shared vision? I am not talking about a dictatorship that drives employees towards a consensus view but rather a purposeful process whereby each side of an argument approaches the process by being able to set aside respective viewpoints long enough to fully understand and acknowledge the views of the opposing side. It is quite likely that paradigms will be altered or reshaped through such a process, a process some refer to as high-performance teamwork. Simply put, “Teamwork drives results.”
There are many forces in business that are seemingly at odds with one another and yet the sustainability of any business necessitates an acknowledgement and reconciliation of the competitive forces derived from stakeholder interests. The suppliers that provide goods and services into a business arguably desire to maximize the cost or fees charged for the goods and services they provide. On the other hand, if you are the purveyor of these goods and services that support your business, it is highly likely that you are trying to minimize the cost or fees charged for the goods and services. However, both sides desire long-run viability – sustainability – and as such there is something called ‘negotiation’ that must occur before a transaction occurs.
And such is the case amongst all the stakeholder interests that are in play in business such as suppliers, customers, shareholders, employees and communities. The world of business quickly becomes a myriad of self-interests and shared-interests that must devolve and evolve into what I refer to as win-win outcomes. It is the simultaneous maximization of competing interests that dictates a sustainable business partnership. In order to achieve such a state of being there needs to be a ready-made acknowledgement that businesses operate in a dynamic world of change and transformation. However, maintaining a viable business necessitates that, “All stakeholder interests must be satisfied.”
In summary, a heavy emphasis on these five foundational statements should position businesses well for sustainability. Here is a recap of those five foundational statements:
- Customers are our future.
- People are the primary determinant of success.
- Leadership provides direction.
- Teamwork drives results.
- All stakeholders must be satisfied (if not delighted).
When business performance starts to break down and organizational alignment begins to deteriorate, the root cause can often be traced back to one or more of these five statements. Therefore, a periodic review of the elements that impact these five areas of your business ecosystem can represent a strategic best practice or what some might refer to as a business checkup.