What determines whether a business is successful or not? Some say that cash flow is the measure of success, others will tell you it is the sustainability of the organisation. Both of these are good outcomes, but by themselves they are not a measure of success. There are some common characteristics of successful businesses which fall into five areas:
The most successful businesses are often in attractive and growing markets. Some would argue that they got lucky, but the reality is that those businesses positioned themselves to be where they are today.
Look at your own industry or geographical region, is it an attractive market? If not, find an attractive market you can participate in and navigate into it.
You will have heard of the old phrase, knowledge is power. This has proven true time and time again. No matter the organisation or industry, timely and relevant information has a huge impact on performance.
Highly capable businesses do not wait twelve months to find out how profitable they have been in the previous financial year. Just by implementing a monthly reporting process into an organisation, incredible business turnarounds and transformations have been achieved, all thanks to timely and relevant decision making.
A business, whether it be for-profit or not, needs to use its resources efficiently and charge appropriately for its goods or services.
Successful for-profit businesses do not sacrifice their margin and compete on price alone. The key is having something unique to offer, whether that is an extra service or accompanying product, better quality, more efficient delivery, or a way to save the customer money in other areas.
In this digital age it has become easier than ever to build both a good or bad public image. The decisions made by those charged with governance will filter down through an organisation, driving culture.
It is then no surprise that highly capable and successful businesses embrace principles that promote open and fair dealings. They do this in alignment with the goals of the organisation, making strategic decisions that benefit both shareholders and stakeholders.
Although technology is threatening to replace many of us, it is still widely agreed that the most important business resource is your people.
Highly capable businesses have recognised this and invest heavily in their employees, whether that be through training, career development, flexibility or remuneration. The result is a highly motivated, skilled and flexible workforce that can help your organisation thrive in this fast-moving world.
As you can see, there are many measures by which a business can be deemed successful, success can no longer be judged on financial performance alone. If a business can strike the right balance between the above five areas, it will be well equipped to take on the challenges of tomorrow and in doing so, will achieve success.