7 Pillars of Business Success, Part 1 – Strategy and Leadership
The greatest challenge for any business owner is freeing themselves from the inner workings of the organisation and finding time to actually be a leader. It’s the endless tug of war between urgent versus important, and the successful leaders always know how to make time for the latter.
Understanding your market landscape
Without exception, the most successful leaders are endlessly curious about their audience, their competition and the broader factors shaping their market, be they technological, political, economic or social. They are constantly consuming information from their peers. They understand how their customer’s needs and desires are evolving, and they’re always investigating their competition to see where they’re spending their energy and resources. Steve Jobs was famous for stealing ideas from his competitors and this natural curiosity is a trait we often find among the owners of high growth companies.
For a great leader, every day is a school day.
Understanding your core competence
From this ongoing market research, a leader should be able to identify their core competence, which demands that they ask three questions:
- What does the business do brilliantly?
- What matters most to the target audience?
- What is the competition is neglecting?
The intersection of the above represents your core competence; the thing that you have at the front of your mind during every strategic decision and that you will one day become famous for.
If you’re in an emerging market this might be easy. If you’re in a saturated market competing against big brands then the process is far more difficult and will almost certainly result in you going niche (unless you have very deep pockets!).
Unfortunately very few companies ever answer these questions, which is why most markets are packed with forgettable brands communicating generic messaging to an unresponsive audience.
The idea of core competence is raised by many business authors and thought leaders. Perhaps the most famous and memorable example is by Jim Collins in his book, Good to Great, in which he gives an analogy of “The Hedgehog and the Fox”. Collins explains that the business world has two types of organisations – hedgehogs and foxes. The cunning fox has all sorts of methods by which it can sneak up and catch the hedgehog unaware. The hedgehog, on the other hand, is a simple creature. It merely has one defence mechanism – to curl up into a ball. The thing is that it works, every single time!
Collins encourages businesses to find their inner hedgehog. They should stop trying to be so smart with endless strategies and tactics, and instead focus on perfecting their one big advantage. If they get that right, the clever stuff will naturally follow.
Being clear on your core competence is not enough. You also need to be able to articulate it in a compelling manner.
This comes down to understanding your purpose, or as the brilliant Simon Sinek puts it – finding your why.
By understanding why you do what you do and why people should care, you can communicate your core competence in a powerful and emotive way. And regardless of how rational your audience may seem (or may think they are) every purchase decision, whether B2B or B2C, is ultimately driven by emotion
The final characteristic of all great leaders is their ability to create a shared culture, which demands that they have clear values. There are a few things to keep in mind in the development of values:
- They should capture the traits and habits that most define the founders and leaders of the business, to ensure that all future employees also embody these traits. After all, it’s these founders and leaders that have defined the success of the business to date!
- They should be honest and perhaps even a little bit divisive – if your values are so safe that they appeal to everyone, then they’re not strong enough. If your culture is direct and no-nonsense, say so. It might put some people off from applying but that’s a good thing – they were never going to work.
You need clear mechanisms for embedding these values:
- How do they fit within the recruitment process?
- How do they tie in with performance reviews?
- How else can you reinforce them? Could you have a monthly culture meeting? Could you introduce other initiatives directly tied to each value?
Strategy and leadership is not complex. These are simple principles that are universal across every sector and every timezone. However, most leaders are simply too busy keeping the ship afloat to pay attention to the direction in which it’s pointing. Make sure you’re one of the exceptions.
When advising clients, we at Wilson Partners look at every aspect of the business across what we have defined as the 7 pillars of business success. We do this through our unique business improvement tool – ON.TRAC, through which we help businesses to identify areas for improvement and take action.
Look out for the rest of our series on the 7 pillars of business success and make sure you sign up for notifications.