INSIDE SUCCESSFUL COMPANIES
Corporate Health-Check
Is an enterprise going to be durably successful
There is an overwhelming body of research and experience that can enable everybody who can be bothered to clearly differentiate between companies: those that will survive and prosper for the long run and those, which, no matter how glitzy they may appear for short periods, have the worms of failure gnawing away in their entrails.
We are pleased to offer a diagnostic self-check questionnaire that will enable users to develop a clear understanding of the fundamental characteristics of good companies and, if appropriate, simultaneously rate an organisation they know.
It can also be used to generate useful questions about particular enterprises - and identify what the respondent does not know about them.
This material should be of use to:
- Managers, who may want to rate their own enterprises and generate an agenda for improvement...
- Students of business, who may find a sound non-financial business diagnostic to be refreshingly useful.....
- Long-term investors, who may want to develop their repertoire for understanding businesses a la Warren Buffett, generate interesting questions about particular companies, and contemplate how they might find the information that will most reliably guide investment decisions......
- Employees, who may wish to understand what is wrong with their employing organisations, and agitate for change - or have a method of finding a better place to work!
The content of this questionnaire has been developed by Don Young and Dave Francis, an experienced consultant and prolific business author, with books and other materials published in the US and Britain.
The material is created by the authors and, if used, should be acknowledged.
It has also been carefully checked as being consistent with research carried out on the characteristics of durably successful companies by such writers as Jerry Porras and James Collins in 'Built to Last' and Jay Lorsch and Gordon Donaldson in 'Decision-making at the Top' and many others.
FIVE DIMENSIONS THAT MAKE SUCCESSFUL COMPANIES
1. Strong Identity and Culture
Research tells us that durably successful companies know 'who they are' - they possess an enveloping personality and culture. This pervades the organisation from top to bottom and strongly influences behaviour - internally and towards customers.
The identity of the organisation is strongly represented by top managers, who have an intimate knowledge of their companies and consistently express its values by words and actions.
Corporate personality is also derived from knowing customer needs and serving them well - and from understanding what differentiates the company from its competitors.
Commitment to the enterprise and what it stands for is deliberately encouraged.
2. Effective Planning, Control and Performance Management
There are effective processes for looking forward and setting goals, objectives and plans. Goals are consciously set to encourage continuous improvement and high achievement. Planning involves a wide spectrum of the organisation's membership and is the responsibility of those that will implement the plans. Units, functions, teams and individuals are clear about what they are trying to achieve and how it contributes to the success of the wider organisation.
Planning processes are reinforced by appropriate information and rigorous processes for reviewing performance - negative variances are rapidly identified and action taken to bring improvement.
High performance is well rewarded and under performers supported to help them improve. But, in the end, underperformance is not tolerated.
3. Fit for Purpose, Adaptive and Well-resourced
It is clearly understood that the quality and effectiveness of the organisation is the key to competitive success.
The organisation is shaped to the needs of the business and continuously adapted as circumstances change and new opportunities or threats emerge. This usually means that change is progressive, continuous and actively involves the whole organisation. Sudden, convulsive, top-down change is avoided.
The operations are well-resourced to keep them at the peak of effectiveness - investment in people, systems, equipment and productive facilities is sufficient to stay at the cutting edge.
All resources - people, facilities, processes and practises that have become obsolete or redundant are stringently shed.
4. Meaning and Commitment.
People at all levels believe that the organisation's mission to serve customers is very worthwhile and a source of pride and commitment.
Top managers manifestly demonstrate their commitment to the success and survival of the enterprise and evoke similar commitment in others.
The quality of work and organisational membership provides meaning to employees' working lives - it is clear that people care about the organisation and their colleagues.
It is recognised that the enterprise is a part of the wider society - genuine efforts are made to make a positive contribution to society and limit damage to the environment.
5. Governance, Development and Cohesion
The board contains the range of skills required to understand and direct the enterprise. There are sufficient independent directors to bring an objective perspective and ensure that all the company's affairs are carried out with integrity. Independent directors spend sufficient time to gain in-depth and personal exposure to the company's operations - so that they are not solely dependent on management or formal reports for their understanding.
The process and relationships in the board makes for open, frank debate where contrary opinions can receive strong airing. The board is cohesive and capable of strongly withstanding external pressures if they are not in the enterprise's long-term interests.
The enterprise has a strong commitment to learning and is highly curious and exploratory. Development equally emphasises tradition and progress. Management development practises encompass all from entry level to the top. The aim is always to develop succession for the top roles from within the organisation.
Thus top managers know and are known by the organisation and regarded as a part of the community. They understand their business and industry intimately. Their behaviours and rewards do not create an excessive divide between the top and the wider organisation. They share in success and adversity in the same way as other employees.
The Full Questionnaire
Reflect briefly on each statement below and consider how you believe it applies to the enterprise in question. Use the following convention:
Generally true
Possibly true
Generally untrue
The Statements
USING THE QUESTIONNAIRE
Readers are free to use the material in ways that are of use to them. This may include training, diagnosis, consulting or simply as a means of stimulating personal reflection, learning and further exploration.
As the material has been specially developed as a result of collaboration between Don Young and Dave Francis, the authors ask that they are acknowledged as its creators if it is used in any public events.