The Formula for Business Excellence

In 2009 I wrote a book called Awesomely Simple – Essential Business Strategies for Turning Ideas into Action, an overview of what I felt were six fundamental things that every business needed to focus on to be sustainably successful. The six elements were:

1. Vivid Vision
2. Best People
3. A Performance-oriented Culture
4. Robust Communication
5. A Sense of Urgency
6. Extreme Customer Focus

Although they seem pretty straightforward, I did a massive amount of research to come up with these six core elements. I later came across a software program called Wordle that allows you to load in text documents, which converts into a “word cloud,” with the largest words representing the most prevalent information throughout the documents.

With great excitement, I loaded the manuscript of my book (53,518 words) with all my research notes. It created an exciting word cloud, but I realized it represented only my thinking. So, I spent the next few years loading the texts of hundreds of books, articles, blogs, and interviews with top business leaders from around the world. At last count, I had packed in more than 200,000 pages (not words – pages) from the most accomplished business thinkers worldwide. I was beyond delighted when it produced a fascinating word cloud that clearly (at least to me) showed the pattern of key themes around the idea of business excellence.

After studying the word cloud at length, I was able to boil all this information down to a single equation that I think does a pretty good job of capturing the essential elements for running and sustaining a highly successful organization. Here’s the equation:

(T + C + ECF) x DE = Business Excellence

Let me take you step-by-step through the elements of this equation.

Talent

You have got to have the brightest, most talented values-based people you can get on your team. Let me make this as clear as possible: “The success of your organization is directly proportional to the quality of the talent you can attract, grow, and keep on your team.”

I had the great honor of spending some time with one of America’s wealthiest and most successful entrepreneurs. This man started with nothing and built it into a multi-billion-dollar company. When I asked him what the absolute best business advice he could give me was, he smiled and said with great confidence, “It’s all about people, people, people. You can kid yourself about a lot of things in your business, but at the end of the day, it’s always going to come down to people.” So the goal must be to become a connoisseur of talent, to make your organization a talent magnet, and create an organization that highly talented, wildly creative people desperately want to work.

Culture

Many people used to feel that “culture” was a touchy-feely issue, but nothing could be further from the truth. If the success of your business is genuinely tied to the quality of the talent, the single most crucial factor in attracting top talent is your organization’s culture. Great people want to work with other great people at a company that has a superb culture. But how do talented people define what a great culture looks like? Again, based on an incredible amount of research on my part, looking at dozens and dozens of studies of the characteristics of a great place to work, here is what I believe are the top 10 elements of winning culture:

1. People enjoy the work they do and the people they work with.
2. People take pride in the work they do and the company they work for.
3. There are high levels of engagement, connection, camaraderie and a community of caring.
4. There is a culture of fairness, respect, trust, inclusiveness and teamwork.
5. The leaders walk the talk, live the values, and communicate a clear vision and strategy for growth.
6. Lots of open, honest, robust and transparent communication across the entire organization.
7. The company invests back in employees; there is a commitment to learning, coaching and development.
8. A bias for action: Employees have an ownership mentality and always strive to give their personal best.
9. High accountability and a strong focus on delivering results.
10. There is ample recognition and rewards, and mediocrity is not tolerated.

I want to challenge you to take a few minutes and study these ten elements very carefully. Then score your company culture on a scale of one to ten, with ten being excellent and one being terrible. To me, any score below a seven should give you concern. If you want to create the kind of organization that attracts the best of the best, you will need to be an 8, 9, or 10 on all ten of the elements.

Another Key to Success

As I explained above, most companies want their folks to display high levels of accountability and embrace an ownership mentality. To do that, it is essential that you set clear expectations for what excellent performance looks like. Here is one of the most important business phrases I have ever learned:

Ambiguity Breeds Mediocrity

You can hire the most talented people in the world, but if you are not very clear about what you want them to do, there is no way to hold them accountable. So a critical element of creating a winning culture is to put in place the systems, processes, and procedures necessary to show all of your employees exactly what is expected of them. Although I do not enjoy putting together SOP’s, I know with certainty that it is impossible to create “repeatable success” without processes.

It is pretty straightforward:Clear expectations lead to higher levels of accountability. Higher levels of accountability lead to higher team member engagement, which is the single most critical success factor in creating highly loyal, engaged, and satisfied customers.

Extreme Customer Focus

Next, we take the first two elements of the equation “Talent + Culture” and focus intently on delivering consistently superior customer service. Let’s deal with the facts: For nearly every organization in business today, one of the only sustainable competitive differentiators left is the quality of your people and the quality of the service they deliver to your customers. Competitors can copy your products. They can copy or beat your price, copy your distribution channels, or reverse engineer your technology. They can put a location directly across the street from yours. Competitors can copy almost everything but whom you have on your team and how your team treats the customer. Therefore, building a culture of extreme customer focus, where your organization “owns the voice of the customer,” is one of the surest ways to control the marketplace.

How do you do this? In 100 different ways, from surveys to feedback cards, customer panels, new user groups, and focus groups. Any method you can think of to get closer to your customer than your competition. Remember: Whoever has the best relationship with the customer wins.

Disciplined Execution

Lastly, you combine the first three elements: Talent + Culture + Extreme Customer Focus, and then you work like crazy to get your entire team to execute with discipline. When you look at the core elements of creating a culture of disciplined execution, there are nine key things that you must do:

1. Establish a clear vision for what success looks like and the core values that will guide the team there.
2. Ensure that your strategy is highly focused, differentiated, defendable, and adds real value to the customer.
3. Gain FULL commitment from your leadership team and all key stakeholders that they will focus intently on executing the strategy.
4. Make sure that you have complete alignment across the organization. That your vision and values, strategy, plans, goals, objectives, tactics and action steps are all pointed in the same direction.
5. Put any systems, procedures or protocols in place that are necessary to ensure effective execution.
6. Foster clear, consistent and relentless communication about the vision, strategy nd the demand for effective execution.
7. Give people all the training, time, resources and support they need in order to effectively execute the strategy.
8. Adjust and innovate as you execute the strategy. Measure, track and post progress; communicate necessary changes.
9. Praise and celebrate success lavishly; deal decisively with failure.

So there you have it, the pattern of business excellence:

Talent + Culture + Extreme Customer Focus multiplied by the power of Disciplined Execution.

I fully admit that these are not the only things that drive business success. You must have excellent financial management, put out a quality product, and do it all legally and ethically. But it is my position that if you can nail these four things exceptionally well in your business, you will have addressed the significant things that will allow you to build a strong foundation for your business.

I am honored to be recognized as one of the Top 200 biggest Voices in Leadership for 2022. If you’d like to get access to my best business and leadership ideas please subscribe to my blog https://johnspence.com.