*Want to Grow a Winning Company? It’s All About Balance.*
Often I am asked what I have learned from my experience as a founder and entrepreneur. What are the best ways to outsmart the competition? How do innovators stay ahead of market trends and opportunities? Is there a formula for predicting the ever elusive next “Big Thing?” Whether you are a start up or an established public or private company, at the end of the day, success is not about luck, fads or lighting bolt “ah-ha!” moments.
As I have discovered in my years as an entrepreneur and during the past ten years leading TIBCO Software, scaling a company requires both the discipline to follow sound strategic processes and the courage to take bold, yet calculated, risks. If you are too aggressive, your company might make imprudent choices and go out of business. If you are too slow or cautious, you might miss an opportunity. Take, for example, a champion downhill skier: if he goes too fast down the slope, he risks crashing and burning. Too slow and he might lose the race. It’s all about striking the right balance. Following are four fundamentals that founders should consider in their quest to finish first:
*1. Find, and foster, top talent.* Mediocrity doesn’t win Olympic medals, nor will it result in a winning company. Great businesses out-smart and out-execute their competitors day in and day out. But while hiring outstanding, dedicated people should be a given for any company founder, it is equally important to create an open environment within the organization that allows top talent to flourish. Hierarchy can often create bottlenecks that stifle innovation and agility. That’s why I have always believed in a flat management structure that gives employees greater autonomy when it comes to decision making. Having smart people in the organization is one thing, but they also need to be given the tools to execute on good ideas quickly, as success depends on doing things both better and faster than your competitors.
*2. Wow the crowd.* Never forget that happy customers are an asset far more valuable than simply the revenue they generate. Satisfied customers are your organization’s most credible supporters – more powerful influencers than any advertisement, white paper or marketing strategy alone will ever be. Thus, good business is not always just about delivering the best product at the most competitive price point. It also calls for devoting resources and attention to customer issues even if these efforts offer little or no benefit to quarterly results. When you are growing your business, it is oftentimes far better to have five devoted customers who you’ve really been able to “wow” with your products, instead of 20 who are only moderately satisfied. This means more than simply hiring someone to oversee customer advocacy – success requires the entire organization to embrace and live by this rule.
*3. Know when to take short cuts.* Building a company with staying power is frequently sought after yet rarely achieved. Taking short cuts can be tempting, especially when the competition is fierce, but know that not all short cuts are created equal. When it comes to the integrity of your business ? accounting or revenue tracking, practices regarding hiring and rewarding employees, or ethical issues, for example ? avoid shortcuts like the plague. Avoiding the pitfalls of short cuts related to your business requires consistent corporate policies and principles, complete with checks and balances that ensure compliance. At the same time, these policies need to be flexible enough to allow for those calculated risks that can help an organization get ahead the pack. It pays to be aggressive in areas such as new product roll outs. Don’t isolate yourself in an ivory tower researching and developing an over-engineered product. Typically, companies only use 10 percent of a product’s features, so understand the market, your customers’ needs and get it out there. What matters most is that you constantly work with the customer to measure, revaluate and adjust in real time as needed throughout the process of developing a product.
*4. When you see your opening, move quickly.* Great companies cannot be built on process alone. As we all know, antiquated, disconnected or bureaucratic organizational procedures can stifle innovation and slow progress to a crawl. If the right decision-making infrastructure is in place, your team should feel confident enough to move quickly – even in chaotic environments – and go out and dominate a market segment. Again, we come back to the importance of cultivating an empowered team of players who are ready to act decisively when the right moment arrives. With an organizational framework and culture of accountability in place, founders can trust their teams to move quickly instead of always having to second guess them. It is this level of agility, supported by consistent, yet flexible, organizational best practices, that lays the groundwork for a winning company.