There is no shortage of studies, articles and books written to help the reader figure out what great companies do when it comes to leadership, strategy, innovation, culture, etc. As a public speaker, college professor, organizational and policy consultant, business strategist, Vistage chair, trusted advisor, and executive coach, I use my free time to stay current as well as re-read classic material on what works and what doesn’t.
One of my favorites (and a required reading by my business students) is What Really Works: The 4+2 Formula for Sustained Business Success by Joyce, Nohria and Roberson (2004). What makes it special is that it’s a meta-study of existing research. Called the “Evergreen Project,” the authors collected studies conducted by the business school faculties of ten universities, to find the management practices that truly promote long-term growth and success. They analyzed data on 200 management practices gathered over two consecutive 5 year periods, and focused on what differentiated companies that were “winners “in the first and second periods, compared to those who were “losers” in both using several financial indicators. The hypotheses were tested with attention on those in the middle – winners in the first period who later fell, and those who rose to join the “winners” in the second period.
While most researchers “neatly” find one theory to describe what separates the winners from the losers, they discovered two sets of factors that were key to success. All the winners had 4 primary factors and 2 of the secondary ones. The 4 primary practices of the winners are that these companies:
- Devise a clearly stated, focused strategy
- Develop a flawless operational execution
- Create a performance-oriented culture
- Build a flat, flexible company structure.
The 4 Secondary practices were that these companies:
- Hold on to talented people and find more of them
- Keep leadership committed to the business
- Develop innovations that transform the industry
- Make growth happen with mergers and partnerships.
How would your company do on the 4 primary factors? What should you do to improve? On which two of the secondary ones are you focused? How could you improve them? Should you change strategy and shift to one of the other secondary factors? Share your analysis!