Traits for Success Revealed
October 09, 2011
Business Tips Article
ASU-SBDC Assistant Director
SAN ANGELO, Texas As a business adviser, understanding the common traits and skills successful business owners possess helps me understand clients.
We have several people visit our center with aspirations of business ownership. But what does it take to create, innovate and organize a successful business?
In past articles, I have discussed capital requirements, financial acumen and management. Yet what traits do successful businesses have in common?
A project called the Evergreen Project was reviewed in an article, What (Really) Works: The 4 + 2 Formula for Sustained Business Success, by William Joyce, Nitin Nohria and Bruce Roberson.
In the article the authors described the Evergreen Project as a search for the evergreen source of business success to replace blind faith, luck and guessing with statistically rigorous analysis of the results of the previously effective organizations.
The study compared several hundred companies in a 10-year period. Public information was reviewed and was scored comparative with the group. The authors determined that there was a 4 + 2 Formula for the successful organizations.
A winner was defined as having the four primary areas of management strategy, execution, culture and structure. And these winners also had two of the following four secondary areas talent, leadership, innovation, and mergers and partnerships.
The four primary practices are very critical in the startup phase of a business. We advise clients that a business plan is valuable for a new business for these very reasons.
To build a strategy for your business, it is important to think through long range planning and your market. Without that foundation for a business, the owner, employees and customers will not understand the business purpose.
Structure and execution are critical for a startup. Thinking through the structure of a new business will help the owner and employees better understand roles and functions. That structure will not only benefit the business as a whole but those working in the business. Structure defines the culture of the business.
In a small business the owner typically creates structure and culture. The business culture is represented in the businesss marketing, customer service approach and overall impression. If the business owner does not create a culture complementary to its customers and staff, the business will suffer. Employees will often leave a work setting that is dysfunctional before they will leave a job for more money.
The secondary practices such as talent, leadership and innovation are related to the skills and traits of the business owner. A business owner needs to believe in the business to make it a long-term success.
Experience in the industry, understanding customer service and the ability to take smart risks will make a business more successful. A new business owner needs to have enough skills and abilities in an industry to have enough confidence to know when to take risks, and how to gain trust with customers.
A small-business owner is a leader in all aspects. Customers look to the business owner for knowledge and decision making; employees, suppliers and vendors expect the business owner to be trustworthy.
I will continue my search for knowledge about the common traits of successful business owners. The 4 + 2 formula is an interesting perspective on business success. It may take some of the guesswork out of predicting the future.
The most important part of the process as a business owner is knowledge and applying that knowledge objectively to the business. Keep an open mind and continue the quest for learning. It will be valuable to your business.
Business Tips was written by Cindy Hartin, CEBS Fellow, assistant director and certified business adviser II, of Angelo State Universitys Small Business Development Center. Contact her at Cynthia.Hartin@angelo.edu or 325-942-2098.