When we think about business management today we tend to think that we live in the most revolutionary of times. We’re right in thinking this but so too has every generation of business leaders that has preceded us. In 1668 Johann Goethe wrote “People of this age have a false sense of importance due to the vast amount of data available to them. Distinction however should go not to those who merely have access to the data but rather to those who manage it’s advantageous use”.
Still sounds like wise advise for 2008. As the year comes to a close and we reflect on the past and wonder how we could do things differently to be more effective in the future, here are a few principles that successful companies have applied to ensure lasting success:
- Plan carefully: By studying the external environment firms identify what they might choose to do. By studying the internal environment companies determine what they can do. The goal of any strategic plan is to leverage unique competencies to take advantage of an opportunity in the external environment.
- Communicate the plan and keep it simple: Herman Boerhaave said “The Great Seal of Truth is Simplicity”. This is so true; great leaders speak in clear, simple and understandable terms so everybody knows exactly where the company is going and what will be required to get there.1
- Exploit your current resources: In every growing company there is a strain on resources between the development of new assets vs. leveraging of existing assets. Companies that have enjoyed enduring success do not ignore the need to develop new asset categories but history tells us the most successful companies always focus on exploiting existing assets.
- Diversify your business portfolio: Outstanding companies are very adaptive in their approach to markets. They diversify their geographical markets, their suppliers and their customer base so they are not dependent upon one customer group or geographical area for all their profits.
- Learn from Mistakes: Making a mistake is pardonable; making the same mistake again is not. To ensure learning takes place, great organizations develop and pass on stories from which future managers can draw clear objective lessons and apply them to current day problems.
- Change conservatively: Outstanding companies do not go through radical changes on a regular basis. They do go through them but only at selected moments and even then, they do so cautiously.2
As 2007 closes I wish you all a very prosperous New Year and look forward to working with many of you again in 2008!
Happy New Year!
1. Phil Pringle Newsletter Stepping Out With You “KISS – Keep it Simple Stupid”
2. Managing for the Long Term, Four Principles of Enduring Success; Christian Stadler, HBR July August 2007 PP62..72