What sets the handful of successful businesses apart from the millions of businesses that fail each year?
About 50% of all new businesses will be closed within 5 years, and with odds like that, there must be some clear characteristics of companies that are able to survive over time and make it big in the world.
There must be some qualities and traits that great companies possess that allow them to thrive, while many businesses fail to even survive.
I have spent several months studying business, learning about what makes good companies successful, what makes bad businesses fail, and I have read memoirs, case studies, and books about these topics, this post is a summary of what I have learned about business, and what it takes to be successful in today’s economy.
- Clear vision and purpose for existence
A clear vision, and having a clear purpose for a company’s existence is paramount to its success. Opening a store and going into business without any idea what you are selling or who you are selling it to sounds crazy, but it is actually not all that uncommon.
Before day 1, a great business leader will already understand what they are selling, who they are selling to, and what needs their potential customers have that they can fulfill.
Of course businesses must always adapt to market wants and needs, but a central and underlying purpose for existence is a must have for successful businesses.
Example: Apple. If you have seen the movie Jobs, or if you know anything about Steve Jobs, you’ll quickly realize that Steve’s focus was unshakable. Steve sought out to revolutionize the computer, to put personal computing into every home in the world, and ultimately he wanted to change the world.
Steve’s vision to put a computer was reflected in every choice he made at his company. While other computer makers created computers as tools for professionals and tech gurus, Steve sought to make a computer so simple and intuitive that anyone in the world could start using it right away.
Steve saw that people needed computers, and he saw it long before anyone else in the world did.
- Creative thinking and a great USP
Successful businesses must be able to create new ideas, tread unfamiliar ground, and they must have a special USP. A USP (unique selling proposition), is a short statement explaining why a business’ product is different and better than any other product like it on the market.
A company must be able to convince a potential buyer why their products are different and better than another product like it in the world.
Being able to sit down, dream up new ideas and business plans, being able to do something that no other company has ever done before is must have for any successful company, and whether creativity is used in creation of a great USP, a new products line, or even a corporate restructuring after an economic downturn, creativity is a must for long term survival.
Example: A diamond is forever (Debeers). De Beers created the famous USP, “A diamond is forever.”
In use since the 1940’s, this USP distinguishes their product as a unique and eternal symbol for everlasting love. It sets their diamonds apart, and this type of creative USP is exactly what a company needs to be a success.
In the 1930s diamonds were not nearly as popular as they are today, and through a series of highly creative- and well thought out- business moves, Debeers turned diamonds from a luxury that most Americans didn’t want, into an everlasting symbol of love for anyone getting married.
You can read more about this incredible story in a great article by Lindsay Kolowich http://blog.hubspot.com/marketing/diamond-de-beers-marketing-campaign
- The ability to adapt and change.
In an ever changing, and ever transforming world, economy, and market, companies must be able to adapt and change constantly to survive long term.
Take a look at what was popular 5 years ago and you will find that almost everything that was very popular then is outdated now, and that is why companies must be willing, and highly able, to adapt.
As the market changes, success in business will often depend upon the ability of a company to satisfy the desires of their customers, meet market demands, and create new and creative ways to market their products.
Example: Nike. Nike has been around since 1964 and has undergone many massive changes since their initial creation. Not only does Nike constantly create new clothing, and products that stay in fashion, but they also dive into new and more creative ventures, including, the Nike+ fuelband or the Nike+ running app.
Nike will always produce the same great products that they are known for, but Nike has excelled at adapting to trends and trailblazing new products, even if they are outside of their normal realm.
Even shoe companies most constantly listen to their customers, meet their demands, and keep up to date with new trends in fashion, technology, and culture.
Especially for a clothing and shoe company, failure to stay in tune with what is new and popular in the world would mean certain death.
Read more about Nike here: http://successstory.com/companies/nike-inc
If a company is really going to last, you should probably assume it is going to go through some hard times.
It is in these times where companies must either learn to let go of the past and continue forward with new vision, or they will collapse. A company has to be tough, willing to push through, and unwilling to quit if it is going to make it through the long term and into the far future.
Example: Ford. Ford was close to bankruptcy (along with most of the other American vehicle manufacturers), and while other companies took money from the government to survive, Ford chose a different route.
Ford chose to seek new investors, restructure its company, and sell off brands- like Jaguar- so that they could better focus on what they did best.
Ford survived and is still chugging away today because they refused to call it quits, they accepted responsibility for their mistakes, and they started making the changes they needed to make to ensure the survival of the company.
Read this article from 2009 where Ford states they will not use government funds to save their company, and they outline their plan for surviving an economic downturn that crippled the rest of the US auto industry. http://www.huffingtonpost.com/2008/12/10/ford-bailout-money-unnece_n_149824.html
- A great team
Behind every great company is a great team.
A great team includes your CEO, upper level managers, middle managers, skilled workers, and even your general laborers.
For a company to excel it takes creative thinking, it takes willingness to do what needs to be done, and it requires fostering an environment of teamwork that creates a culture of encouragement and belief in the company.
Example: Google. Google has a mission to create the happiest and most creative workplace possible for it’s employees, and it is reflected in the company’s groundbreaking new products: driverless cars, google glass, or even unsuccessful ventures like google plus.
Google is on the bleeding edge of technology, and while they miss success with some products, a lot of their continued success comes from the great team of workers that are willing to dream up new ways of doing things.
Creativity and teamwork are powerful qualities for a company to possess, and google understand that a great team and work environment empowers all of its employees and workers to be their very best.
Check out this post on Google’s workplace and see for yourself what one of the best employers in the world is like. http://www.cbsnews.com/news/inside-google-workplaces-from-perks-to-nap-pods/
- The customer comes first
Successful companies know one thing better than anything else: they exist because of the customer, and they are there to serve the customer.
Businesses that are successful over many years do their very best to provide the customer with what they want and need, give them a great experience, and offer up customer service and friendly smile. If two companies are the same in every other way, the one with better customer service will always outperform the other, its one of the golden rules.
Example: Starbucks. How did starbuck become a billion dollar company selling highly overpriced coffee? They focused on the customer first.
Starbucks doesn’t just sell coffee, they sell an experience to the customer.
When you buy you 4 dollar coffee, you purchase a smile from your barista (who is highly trained through employee education courses to please you), you buy the ambience of your local store, and you become part of an exclusive group of Starbuck’s supporters.
Starbucks is constantly looking to keep its customers happy, and that is a large part of why it has become what it is today.
When you buy a cup of the famous Starbucks brew, you join a special world and you can actually buy a piece of popular Americana. Starbucks has gone beyond a small fad, and turned into a culture of fans.
Through turning a cup of coffee into all of this and more, Starbucks has successfully leveraged the desires and wants of its customers and created a legend.
Read more about the Starbucks experience here: http://www.adaptivepath.com/ideas/starbucks-is-not-about-the-coffee/
- Smart marketing.
Successful businesses know that it isn’t enough to just run a generic ad on T.V. and expect to up their sales levels. The best and brightest companies out there create clever new ad campaigns, they create cues for engagement (like contests and giveaways), and they utilize their social media campaigns to give their company a unique voice and personality.
The best marketing practices always address a need that the customer has.
Selling a product is great, but great businesses understand that people usually buy products for what they can do for them, not what they are made out of.
People buy things for the benefits, and not usually for the specs.
Example: Febreze. Febreze is a marketing genius, but it wasn’t always that way.
When Febreze originally released it was a huge flop, the intended purpose of it just didn’t click with buyers, but by adding a new line of fresh scents, Febreze was able to change its marketing target and become a billion dollar business.
Febreze employs clever ads, targeted marketing, and creative new ideas to stay a relevant and popular brand in an economy where everything constantly changes.
Read more about Febreeze here. http://geekrebel.com/2012/03/marketing-the-febreze-story-marketing-the-feb/
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