Through the decades I have advised many business owners, CEOs and entrepreneurs on how to grow their business.
Much of my advice was tactical in nature, answering the “how to” questions.
But one leader I advised told me that he’d find more value for himself and his company if I could offer counsel on “what to do.”
I’ve remembered that conversation for years, and, in preparation for this column, considered the characteristics that set some of my more successful clients apart from their peers. It turns out that success flowed from what they did, not how they did it.
This is what they did differently.
1. Watch the horizon.
The first thing is that they kept one eye on the horizon. I don’t think any of them had a formal vision statement. Rather, they kept watch for opportunities and challenges and grew their companies by looking for and seeing what others didn’t.
Why did the other companies not see the possibilities for growth and profitable revenue?
The owners of the other companies were so tactically focused, with two eyes on the company, an inner focus, that they did not have the time or perhaps the interest to see beyond their current task list or daily problems they were addressing.
2. Exploit a niche.
Second, each leader started their business on the foundation of solving a niche market need. It didn’t matter who the competition was, or what the industry was, they found a slice of the market to exploit and honed in on it with a laser focus. Expansion occurred in related niches.
3. Create detailed plans.
Third, the successful companies created the plans they needed to grow their business. The leaders decided it wasn’t enough to have an annual business plan; they created other plans to support the financial plan.
On the list were a marketing plan, a sales plan, a cash flow plan, a quality assurance plan, a human resources plan, a capacity plan, and a succession plan. One client shared that taking the time to create a formal marketing plan made a huge difference in their business results.
4. Focus those plans.
Fourth, they focused on what really mattered. Using the sales plan as an example, successful companies track key metrics of prospecting, presentations, objections, close rates, sales cycle length, and follow-up activities for expanded opportunities (penetration sales).
Every company has key performance metrics; the key things that make significant financial differences in results. The successful companies tracked and reacted to leading and lagging indicators that they controlled.
5. Remain frugal.
Fifth, they watched the pennies. The leaders of these companies were not cheap; they reinvested heavily in the future of their businesses.
The leaders focused on the profit and loss statement and worked hard to improve gross profit margins (GPM) and at keeping overhead low.
A typical exercise would consist of saying that if the industry average for GPM is 50 percent, what would it take to get our company to 55 percent? And they would start looking at how to make that happen and they kept at until they achieved the objective.
People in these companies were taught to be cost conscious and often were rewarded for suggesting ways to reduce expenses.
6. Hire the best.
Sixth, these companies hired well. It was accepted that “A” players were more expensive but would also produce considerably more. The search for top notch talent was a constant undertaking.
Likewise, they were not adverse at letting under-performers go. Processes were followed that gave individuals opportunities to improve and turn their performance around. If it worked great, if not, these people were freed to go work elsewhere.
7. Invest in people.
Seventh, also on the subject of people, these fast growth companies rewarded their people. Not only did they pay them well, there were annual bonus programs, expense reduction sharing plans, profit sharing, matching of retirement funds 401(k) and ample vacation time, not always based on tenure.
8. Review and revise.
Eighth, business models were always under review and tweaked where necessary. Part of this was a function of competition, and some of it was the advancing use of technology and the opportunity for greater efficiencies.
This was a significant area of time investment for the leaders. You could consider it part of the “one eye on the horizon” perspective, but it turns out that the leaders were almost exclusively the only people in the company that were operating outside the four walls of the company, gaining exposure within their industry and from other industries.
9. Improve yourself.
Ninth, these leaders were fanatics for self-improvement. They were all life-long learners, not in the category of already “knowing it all”.
Each of them understood that there are two parts to learning, validation and education. Validate that what you’ve already learned is true, and that you’re properly putting that knowledge to use. And get educated about things you didn’t know in important subject areas.
10. Avoid isolation.
Tenth, each of them knew that they had to break out of the isolation that leadership brings. These men and women sought out perspective and regularly meet with other business leaders from different industries.
None of these leaders started their business with the idea of creating a Fortune 500 firm. What they were interested in was providing for their families. These men and women now
provide jobs for hundreds of employees.
Ken Keller is an executive coach who works with small and midsize B2B company owners, CEOs and entrepreneurs. He facilitates formal top executive peer groups for business expansion, including revenue growth, improved internal efficiencies, and greater profitability. Please contact him at [email protected] Keller’s column reflects his own views and not necessarily those of this media outlet.