These Few Business Basics Really Matter

Harvard Business Review published What Really Works, in business back in July 2003, a summary of the Evergreen Project. The lessons are as applicable today as they were then. These few business basics really matter.

The Evergreen Project:

• 160 Companies.
• 10 Years.
• 200 Management Techniques.
• 3 authors.
• 50 Academics and Consultants.

The 4+2 Formula:

Without exception, the companies that outperformed their industry peers excelled in what the authors call the 4+2 formula.

Companies following this 4+2 formula had more than a 90% chance of achieving and sustaining superior performance compared to others in their industry.

The 4:

Master these four primary management practices:

• Strategy
• Execution
• Culture
• Structure

The +2:

Pick two of these secondary management practices to master:

• Talent
• Leadership
• Innovation
• Mergers and Partnerships

  How to do The 4:

• Strategy – Whatever you do and however you approach it, the key to achieving excellence in strategy, is to be clear about what it is and to communicate it consistently to your customers, employees, and shareholders. You’ll start with a simple, focused value proposition that is rooted in the knowledge about your company’s target customers and your own capabilities.
• Execution – Get ‘er done. Like Strategy, how matters more than what. Your job is to stay focused on the results that align with your Strategy. Creating clarity and consistency for all levels of your team on HOW you do things around here is key to consistent Execution.
• Culture – Just like in 2003 when HBR first published What Really Works, Culture is often thought of as soft, taking a back seat to operations, metrics, and other tangibles. But Culture is part and parcel of HOW you do things around here. Operations, Strategy, Compensation, Structure, Hiring, Leadership, Innovation, and Partnerships should all be guided by, and support, your Culture.
• Structure – A fast, flexible, flat organization. A Playbook and consistent processes are important. But too much bureaucracy slows progress and sucks the passion out of your team. Einstein’s shared the idea that everything should be made as simple as possible, but no simpler. The most successful organizations apply this to their management levels and decision making, ensuring that their organizational structures simplified the work.

How to do The +2:

Pick two of these secondary management practices to master:

• Talent – Keep and hire A-Players. The first step to this is defining who they are for you. Since an A-Player is someone who exemplifies your Core Values through their behaviors and exceeds their performance standards and expected deliverables, you’re A-Player is not everyone else’s A-Player and vice versa. Being crystal clear about who they are will make it easier to attract, vet, and hire the right people, and to take care of those already on your team.
• Leadership – Find leaders who are committed to your business and its people and be one yourself. You will need to build relationships with people at all levels of your organization and inspire your management team to do the same. You will want leaders who can spot problems and opportunities early, and then take appropriate action.
• Innovation – Make industry-transforming innovations. Marginal improvements to existing services and products are generally not enough. Foreseeing and preparing for future events, revolutionizing internal operations, and an ambition to lead the way with major, industry-changing innovations are keys to Innovation.
• Mergers and Partnerships – Growth through acquisition and strategic partnerships. Small and frequent acquisitions led to greater growth and success than occasional big deals, as did sticking close to their core business and offerings. This path makes sense when it leverages one of the organization’s existing target customers and your relationships with them or complements both organizations’ existing strengths.

Check out the full article here for more stories and insights. And let me know what you think of the 4+2 formula and how it applies, or doesn’t, to your business.