Adherence to core principles can save a business
By Chris Zook and James Allen
"Complexity is the inevitable consequence of growth, and ultimately its silent killer."
Mr Zook and Mr Allen have delved into the performance records of over 200 companies around the globe to determine what makes the best ones tick. Just 9pc of firms, they say, have achieved a modest rate of profitable growth in the past decade.
The authors have concluded that those which manage to consistently deliver the best results, bar the occasional hiccup, have one ingredient in common -- repeatability. By that, the authors explain, those companies have a focus on three defining characteristics: A well-differentiated core, clear non-negotiables and closed loop learning.
The authors ram home the message that in order for companies to rank among the best, they must have these repeatable models. They argue that nearly half the performance variations among business come down to whether they have adopted those principles and have implemented them correctly.
The non-negotiables -- which translate strategy into consistent decisions and actions -- are a key element of the repeatability model. Nike, for example, has 11 core maxims it deems non-negotiable. History is strewn with the names of companies that failed to adapt -- Nokia and Kodak being just two recent examples. Others have almost succumbed -- Starbucks and Dell for instance.
Ryanair is held up as an example of the repeatability model. "Its great repeatable model is about stripping the airline experience and cost model down to its absolute basics," the book notes.
While it is largely aimed at executives, there are lessons in here for anyone involved in setting up an enterprise. Customers come first. Know them and don't become distant from them. Simple is best, complexity kills. Stick to your core business and strengths and makes sure everyone in your business knows what the company's mission is and how to get there.
A highly readable book, its lessons should be required study for anyone in business.
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