The question of what makes a successful company is not a simple one. While there are many successful companies one can observe, they don’t all follow one plan of action.
What does the literature say?
What makes a successful company? A search of various business-orientated literatures does not yield a consistent set of results
According to Forbes, there are six key things that make a successful company. It states that “they have a mission, they keep employees happy, they react quickly and adapt, they work the long term, they are not islands, and they have a family plan”
Success here could mean an increase in profit, brand loyalty from customers or an increase of the market share.
Michael Schmidt, writer for Investopedia argues that “competitive advantage, above-average management (and) market leadership” make a company successful. In contrast Michael E. Raynor and Mumtaz Ahmed writers for the Harvard Business Review argue a successful company is one which focuses on being “better before cheaper” and places “revenue before cost”. To them a company which “compete on differentiators other than price” prioritises increasing revenue” rather than solely attempting to reduce costs are those most likely to thrive and grow a successful company.
What do these points mean and what is the answer?
Clearly there is no strict set of steps to take however there does seem to be a list of ideals from which companies can base their approaches.
Although it is completely dependent on what your company wants to achieve there are a few key ‘no brainers’. Having a mission, treating staff above average and flexibility are all invaluable qualities for a successful company. Following the examples of already successful companies is a great way to learn but ultimately you need someone with innovation and bravery at the helm of the company in order to lead it to the same levels of success as the big companies. The following three points are essential for a successful company:
Value your employees
A successful company is based upon the people that create it. It is therefore imperative that a company recruit the best staff and treat them well. Companies with extra benefits such as providing breakfast or gyms like the Google model are excelling and other companies are following suit. Arguably, as well as being ethical it is proving to make great business sense to treat your staff as well as you would treat your family. Happy staff makes productive employees. In fact research has shown that as long as staff are paid enough to live comfortably, productivity does not go up with increase in monetary incentives. In fact, these improvements are generated by increases in benefits and better treatment of staff. This challenges the very traditional business model which assumes that increased salaries make happier, more productive staff.
Focus on quality
A successful company needs a good, high quality product. This should be put before cost savings. Companies that skimp on quality eventually lose out to higher quality products. Having a good product gives both the employees and the consumers a product to believe in. In guarantees loyal customers and customer recommendations.
Look ahead and react quickly
A successful Company works long term and reacts quickly. While you have to think for the long run you also need enough flexibility to react when things don’t go as planned, when markets change and when new opportunities arise.
While no one knows for sure what the secret to success is these key factors are something that a successful company cannot afford to avoid. However a hard work ethic and a drive to succeed combined with the above three points is a great place to start.