Article originally published in the American City Business Journals on June 4, 2018
This is my 200th article published within American City Business Journal’s various publications, including my hometown Philadelphia Business Journal. In those articles, I have written about many principles for building an enduring business.
In this article, I share with you the seven most important principles, based on my own experience rising through the organization to the position of CEO of my company and as director on numerous boards observing other CEOs and their leadership teams.
1. Become the preferred provider to your markets — the Holy Grail of any business
This is a universal principle that all businesses need to pursue and that I frequently write about.
What is a “preferred provider?” It’s a provider that a customer or client favors when purchasing a product or service versus its competition. A preferred provider has a significant competitive advantage over all other providers, because it is the “go-to” provider in the marketplace.
How does a business become the preferred provider to the markets it serves? It differentiates itself from competitors by excelling in the following six areas: it offers high-quality reliable products and services; is on the forefront of technology; provides a great customer experience; is trustworthy; is committed to the process of continuous improvement; and is on a journey to be the best in the world at what it does.
2. Set the right tone at the top and organizational culture
Tone at the top is set by the CEO and the senior leadership team and reflects the ethical climate of the organization, while culture reflects how employees within the organization deal with each other and with customers. As the leader of your business, ensure that you set the right tone and culture. They become the behavioral norms of your employees.
Both tone and culture determine whether employees will trust their leaders and their fellow employees. Employees should be focused on growing the business and exceeding the expectations of their customers, and not worrying about whether they are about to get thrown under the bus by a fellow employee.
One only has to look at Uber and Wells Fargo to see how poor tone and culture can cause the loss of talented employees and customers, as well as the damage that can be done to an organization’s reputation.
3. Act as if your competition is trying to eat your lunch
Why act this way? Because that’s what competitors do. It may not be across the board, but it happens in a business niche where they feel they can take advantage of your weaknesses and exploit their competitive advantages.
Andy Grove, former chairman of Intel Corporation, was right when he said, “Only the paranoid survive.” Ensure that you not only survive but continue to thrive.
4. Listen to the brutal facts of reality
This is a critical principle taught by the January 1986 Challenger space shuttle disaster.
After being warned by Thiokol engineers Roger Boisjoly and Robert Ebeling not to launch the shuttle due to an ambient temperature below the design temperature for the O-ring seals on the solid fuel rocket boosters, NASA launched the shuttle anyway. The O-rings failed, resulting in the catastrophic loss of the lives of seven astronauts.
In response to the warning, one NASA manager is quoted as saying, “I am appalled by your recommendation.” Another NASA manager said, “My God, Thiokol… when do you want me to launch — next April?” It’s obvious that NASA did not want to hear the brutal facts of reality, resulting in tragedy.
Leaders need to listen to their experts and to be open to hearing unwelcome news. They need to create an environment that welcomes this input.
5. Treat your employees as you would like to be treated
Act in ways that will encourage employees throughout your organization to talk with you. Walking around, asking questions and listening to how things are going will help break down barriers in communication. Don’t violate the chain of command by giving orders on what you want them to do. Discuss it with your direct report responsible for that area.
Don’t act like an imperial leader. It will reduce the likelihood that your employees will be comfortable talking to you, hurting your ability to learn about issues that need to be addressed.
Quoting entrepreneur Richard Branson, founder, chairman and CEO of Virgin Group, “The way you treat your employees is the way they will treat your customers.” Wise advice.
6. Empower your employees to continuously improve their area of responsibility
Create an environment in which your employees have a feeling of personal ownership in what they do. Empower them to launch improvement initiatives within their area of responsibility, and to propose improvement projects above their approval authority.
Share with employees your expectations and hold them accountable for results. Don’t micro-manage.
In my experience, a philosophy of continuous improvement, led by the CEO and embraced by all organization levels, is a huge source of competitive advantage.
7. Hire people who are change agents — they will help you break paradigms
There are people who have a positive attitude, see a world of opportunities and abundance and are not afraid to take risks, and there are those who have a negative attitude, only see a world of limitations and scarcity and never leave their comfort zone. Hire the first type of individual.
Following these seven principles will give you the best chance of building an enduring business.
Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.
Good article Stan!