- Be better.
- Don’t be cheap.
- 3. There are no other rules.
That’s according to a recently released book co-authored by Deloitte director Michael Raynor and strategist Mumtaz Ahmed, The Three Rules: How Exceptional Companies Think (Portfolio/Penguin, 2013). Raynor, who earned his doctorate from the Harvard Business School, and Ahmed, along with a team of researchers, analysed a database of 25 000 companies across hundreds of industries spanning 45 years to identify those companies that were statistically “exceptional.”
What is exceptional?
Defining “exceptional” was a project in and of itself, but it began with one question: “How much of a difference is enough to make a difference?” What Raynor’s team ended up doing was generating something of an actuarial table for business success.
“If somebody says I am 82 years old. Is that person old or not? Well, if they live in the Northern Islands of Japan, that is early middle age because those people live forever. If they are from Tanzania, they are probably the oldest person in the country. What counts as old is a consequence of your context.”
What makes a company great?
Raynor and his team also developed a mathematical algorithm that corrected for age of business, date, amount of debt, size and industry, among other variables.
The goal of the analysis was to strip out the effects of luck and variation to come to an answer to the question: “What do managers do to make companies great?” says Raynor, who is based in Mississauga in Ontario, Canada.
After identifying 344 top performers, Raynor and his team, who officially started working on the project in 2007, looked for common traits to define how those exceptional businesses acted.
The team largely came up empty.
However, when Raynor and his team started to look at how those exceptional companies think, the principles started to become clear.
The principles of greatness
They are as follows:
1. Better before cheaper. Differentiate yourself from your competition based on quality, not price. While you may achieve some level of success undercutting your competition with cheaper prices, you will almost never become exceptional on a price-based model.
2. Revenue before cost. It will be more valuable to your company to drive your revenues higher than it will be to drive your costs lower. Cutting costs may result in some degree of success, but, most likely, your company won’t sustain an exceptional level of greatness.
3. There are no other rules. Technology, talent, markets, people – it can all change. But don’t mess with Rule 1 or Rule 2.
Exceptional companies include long-haul trucking company Heartland Express and teen clothing retailer Abercrombie & Fitch. The companies are all publicly traded companies, larger than the sorts of companies that many young entrepreneurs may have on their hands. But Raynor says the three rules still apply to younger, smaller companies, if with a modicum of compassion in the application.
Choose a direction, not a route
Consider the rules “a compass, rather than a map,” says Raynor. “You are lost in the forest and somebody says civilisation is North. If I hand you a compass, I have done you a favour. You still have to be creative. You can’t just walk straight north, you will bump into a tree, walk off a cliff, do whatever it is you do. And so sometimes you have got to go East, West, double back South even and really pay attention to cost for a while, but you want to make sure that over time, you are pushing your company in one direction versus another.”
Very often, new start-ups are especially cash strapped. And Raynor recognises that. But the rules of putting quality and revenue first still apply on a comparative level.
“If you want to have higher profits than your competitors, the way to do that systematically is not to have lower costs than your competitors,” he says.
Raynor cautions that this doesn’t mean businesses should put “gold-plated Aeron chairs and Godiva chocolates in all the conference rooms,” but that businesses should figure out where they are better than their competition and exploit that gap with higher prices or higher volume, not lower costs.
“It is all about your relative position. If you want to be relatively more profitable, you want to have relatively higher volume and/or relatively higher price” than your “relevant” competition, he says.
What sets your business apart from your competitors?
Why Fight Or Flight Mode Can Break Your Business
Truly successful business owners are masters of their own emotions though. Because when you aren’t, things will quickly start to derail.
Have you ever been in a situation where a client started shouting at the staff? It could have been at a restaurant, at a car dealership or even at a doctor’s office. When people ‘lose’ it in the real world, we label them as unprofessional. We are less willing to do business with them, work for them, or invest in their business.
When your buttons get pushed for too long, it might trigger you to start fighting. The moment we feel ‘attacked’ most people tend to go into ‘Fight or Flight mode’. The Amygdala (Reptilian) brain has been accessed, and the resulting behaviour is actually beyond their control. What’s scary about this place is that you feel in the same amount of danger as someone who is about to be attacked by a predator.
This is incredibly dangerous territory for your business to be in. This is the place where staff resign, contracts get cancelled, and money gets lost.
Maya Angelou explained it well: “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
How you make them feel will impact your staff’s customer service, their productivity and ultimately your bottom line.
As a business owner and leader ask yourself the following questions:
- Are you congruent? Is what you say, do and feel aligned? Can your staff trust you and do your actions speak for themselves?
- Do you understand your own trigger points, and can you calm yourself down?
- Do you pick up on the moods in the office?
- How clearly do you communicate your ideas?
- How do you handle conflict?
- Does your staff feel safe in your company? Or do they know you will throw them under the bus when something goes wrong?
Simon Sinek says that a successful leader’s number one goal must be to make their staff feel safe.
It’s time to increase your EQ
EQ, or emotional intelligence, is a key factor in an effective leadership style. To increase your emotional intelligence, start with these steps:
- Get enough sleep, exercise and notice your blood sugar levels.
- Many people will snap if they are dehydrated, tired
- or hungry.
- Set meetings around lunch times, allow yourself to have time to eat and pack healthy meals and snacks for yourself. Your body needs the right fuel to keep going.
- Exercise releases dopamine that will naturally make you feel happier and more energised.
- Make sure that your staff take lunch breaks and have time to eat.
Practice mindfulness and journal
Find time in the morning to do your ‘morning pages’. In Julia Cameron’s The Artist’s Way she explains how writing morning pages helped lawyers, doctors and screenplay writers to focus and find their creativity and drive again. I have noticed my own emotional states, patterns and triggers come out of my morning pages and this has helped me with my self-awareness tremendously. By cleaning out your thoughts on a page, you feel much calmer because you have decluttered your own thoughts. You’re now in charge and ready for the day.
Find a quiet spot to visualise what you want to get out of the day. Use all of your senses to create the perfect movie of your day, with all the colours, textures, sounds, smells and tastes that can make it real. Imagine yourself being calm, listening well, and being a great leader. Notice your body language in your visualisation, how you are sitting or standing, and even the way your neck curves. I often use this technique for public speaking.
Swimmers in the Olympics use visualisation to train themselves for their big race and find that they swim the race with 90% accuracy in the time they swam it in their minds.
Notice if people are walking on eggshells around you. You may have many unresolved issues or triggers that some neuro-linguistic programming (NLP) or personal development coaching can help dissolve.
How can you help others when they have entered fight or flight mode?
Pay attention to your body language, tone and choice of words. When we communicate, 55% is conveyed through our body language, 38% through our voice and tone and only 7% through what we say.
When someone is in ‘fight or flight mode’ make sure all the elements communicate: ‘I am your friend’, ‘you are safe here’ to the other party.
- Body language: Show open palms — this means ‘I come in peace’.
- Smile, lean forward, show your ear.
- Tone: Have a calm friendly tone in your voice. Stay away from sounding snappy, angry or sarcastic. This will make a person even angrier.
- Word choices: Our minds cannot hear the word ‘Not’. Use words that focus on the outcome that you want, rather than what you don’t want.
- Say something like: It looks like you are not so happy right now. If you said to them: ‘I can see you are frustrated and upset’ you are entrenching their unhappiness. Can you hear the difference between ‘unhappy, not calm’ versus ‘frustrated’ or ‘upset’.
- Be solution orientated: ‘How can we resolve this situation? How can I support you, and how can we fix this?’
Stop assuming and ask questions
Don’t assume what a person is feeling. Ask them using open-ended questions. Make it clear that you are open to feedback and want to learn.
‘Please would you mind telling me what was said, or done that you didn’t like?’
Focus entirely on the person, their body language, their facial expressions, their tone of voice and what they are really saying. Clear your mind from your own thoughts or agenda and focus just on them. Allow a breather or a space after they’ve spoken so you can make sure they have finished speaking. Most people respond to only the first thought of a sentence, never fully listening to what the real message is behind the words.
Cut out distractions: Hide your phone — from yourself and from others.
Communication experts Celeste Headlee and Simon Sinek both say that you should hide your cell phone in a meeting. The research shows that a person will trust you less if they see your cell phone on the table, even if you’re not looking at it.
Empathise, don’t sympathise
Put yourself in the shoes of your client or staff. Try to understand what they are going through. When relating to your staff or a client, it’s crucial to anchor yourself in a positive place, in order not to be pulled down by them.
Offer an outside perspective, but hand them a rope or a ladder to get out themselves; offer them the support and encouragement to get to safety.
Show them the bigger picture
Explain to your team how their puzzle piece fits into the bigger picture. Once we know that the work we do has a greater purpose, and we buy into that purpose, we will do almost anything to support our company to get that outcome. Let them buy into your vision and let them surprise you.
Why Inspiration Alone Is Not Enough To Be An Inspiring Leader
Strong leaders unlock higher performance by empowering people.
When employees aren’t just engaged, but inspired, that’s when organisations see real breakthroughs. Inspired employees are themselves far more productive and, in turn, inspire those around them to strive for greater heights.
Our research shows that while anyone can become an inspiring leader (they’re made, not born), in most companies, there are far too few of them. In employer surveys that we conducted with the Economist Intelligence Unit, we found that less than half of respondents said they agree or strongly agree that their leaders were inspiring or were unlocking motivation in employees. Even fewer felt that their leaders fostered engagement or commitment and modelled the culture and values of the corporation.
To understand what makes a leader inspirational, Bain & Company launched a new research programme, starting with a survey of 2 000 people. What we found surprised us. It turns out that inspiration alone is not enough. Just as leaders who deliver only performance may do so at a cost that the organisation is unwilling to bear, those who focus only on inspiration may find that they motivate the troops but are undermined by mediocre outcomes. Instead, inspiring leaders are those who use their unique combination of strengths to motivate individuals and teams to take on bold missions — and hold them accountable for results. And they unlock higher performance through empowerment, not command and control.
Here are some of our additional findings about how leaders both inspire, and get, great performance.
You only need one truly ‘inspiring’ attribute
We asked survey recipients what inspired them about their colleagues. This gave us a list of 33 traits that help leaders in four areas: Developing inner resources, connecting with others, setting the tone and leading the team:
- Stress tolerance, self-regard and optimism help leaders develop inner resources
- Vitality, humility and empathy help leaders connect
- Openness, unselfishness and responsibility help set the tone
- Vision, focus, servanthood and sponsorship help them lead.
We found that people who inspire are incredibly diverse, which underscores the need to find inspirational leaders that are right for motivating your organisation — there is no universal archetype. A corollary of this finding is that anyone can become an inspirational leader by focusing on his or her strengths.
Although we found that many different attributes help leaders inspire people, we also found that you need only one of them to double your chances of being an inspirational leader. Specifically, ranking in the top 10% in your peer group on just one attribute nearly doubles your chance of being seen as inspirational. However, there is one trait that our respondents indicated matters more than any other: Centeredness. This is a state of mindfulness that enables leaders to remain calm under stress, empathise, listen deeply and remain present.
Your key strength has to match how your organisation creates value
Effective leadership isn’t generic. To achieve great performance, companies need a leadership profile that reflects their unique context, strategy, business model and culture — the company’s unique behavioural signature. To win in the market, every company must emphasise the specific capabilities that make it better than the competition.
We found that the same is true of leaders: They must be spiky, not well-rounded, and those ‘spikes’ must be relevant to the way that the company creates value. For example, an organisation that makes its money out-marketing the competition isn’t likely to be inspired by a leader whose best talent is cost management. Spiky leaders achieve great performance by obsessing about the specific capabilities that underpin their company’s competitive advantage. They make sure those capabilities get an outsized, unfair share of resources and provide the key players the freedom they need to continue to excel.
You have to behave differently if you want your employees to do so
Even with a clear idea of your company’s winning behavioural signature, leaders need to develop new ways of operating. We found that leaders who both inspire people and generate results find ways to constructively disrupt established behaviours to help employees break out of culture-weakening routines.
Inspirational leaders recognise the need to pick their moments carefully to reinforce a performance culture in a way that can also be inspiring. These are real moments of leadership and truth. Two of our favourite, classic examples include:
- When Howard Schultz returned to Starbucks as CEO after a nearly eight-year hiatus, he realised that Starbucks’ unique customer-focused coffee experience was now in the back seat. In the front seat were automation and diversification, both implemented in pursuit of throughput and growth. Schultz took swift action to change the company’s direction; he even shut down 7 100 US stores for three hours on 26 February 2008 to retrain the baristas in the art of making espresso. In this highly symbolic move, he left no doubt about his intentions — and about what he thought it would take to make Starbucks great again.
- When Alan Mulally came to Ford in 2006 to help turn around the business, he took bold actions to change the way the company operated. In one highly visible moment, he applauded Mark Fields (who would eventually become his successor) for admitting to a failure in an executive meeting. That was pretty much unheard of at Ford and it set the tone for the open and honest communications required for a new culture at the company.
While these are only single actions by leaders who are famous for producing both performance and inspiration, they provide a window into what inspirational leadership looks like.
Drawing insight from Eastern philosophy, one of our clients once said, “If you want to change the way of being, you have to change the way of doing.” This struck us as profound in the moment and even more profound over time — and the sentiment matches what we learnt in our research. Leaders can only change by doing things differently. The more often they behave in a new way, the sooner they become a new type of leader, an inspirational leader. We know that individual inspiration is the gateway to employee discretionary energy, and that, in turn, is critical to making the most of your scarcest resource — your human capital.
Leaders driving economic value
To win in the market, every company must emphasise the specific capabilities that make it better than the competition.
We found that the same is true of leaders: They must be spiky, not well-rounded, and those ‘spikes’ must be relevant to the way that the company creates value.
4 Mistakes You’re Making That Can Jeopardise Your Reputation
Remember, your reputation precedes you.
We take our careers very seriously. We pour a great deal of energy into cultivating relationships and growing a network of professionals we either work with or hope to. We spend countless hours combing through our online resumes and LinkedIn profiles, carefully ensuring they convey the utmost professionalism. We want to be taken seriously and be considered credible and influential at work. We look the part, practice our presentations, fine-tune our communication skills and polish our presence online and in person.
But, what happens when we are off the clock? How is our behaviour when we are at a restaurant with friends, on vacation with family or simply out of the office? How many times have we run a personal errand and bumped into someone unexpectedly?
Our reputation is built on us – both in and out of the office, in person and online. Professionals often forget that credibility is built on consistency; we can only be consistent in our behaviour when we are mindful every day and in every circumstance. Professionals too often become lazy when the spotlight is turned off. We don’t realise that people are watching. Employees, customers, prospects and peers are everywhere.
Here are four common mistakes professionals make, which call their reputation into question:
1. Social media socialises the real you
Facebook, Instagram, Twitter and more – these online social media platforms create a way for us to communicate with those we are connected to. We fail to realise that our reach doesn’t stop there. These mediums also communicate to the entire world who we are. Just because we sit behind a screen doesn’t mean we aren’t seen.
A 2017 study found that 70 percent of employers use social media to review potential candidates. This number has increased 11 percent in the past 10 years, proving now more than ever that professionals who wish to manage their reputation must be mindful of what they post.
Political commentary, strong opinions, excessive personal information and activities may cast our reputation in a negative light. Even when we have the best intentions, posts and comments can be easily misconstrued. If there is any doubt, don’t post it. Posts should be informative, educational or inspiring. If they fail to convey a message kindly, refrain from sharing them altogether.
2. Personal time is just professional time off the clock
We all deserve to let our hair down when we step out of the office. We must remember, however, someone is always watching and that we must protect our professional reputation. Behavior that causes others to question our authenticity can jeopardize our professional reputation. For instance, loud and rowdy behavior with friends during happy hour doesn’t convey professionalism but may leave others wondering who we are.
Credibility is built on consistency. When your behaviour is consistent in and out of the office, people will trust that is the real you. We’ve all heard the old saying, “It’s a small world.” It feels even smaller the moment we are anything but our best self and we run into someone we wish to impress. Be mindful and know that everyone is everywhere.
3. You’re in the spotlight even when you’re not on stage
Communication begins before you step on stage. Others determine who you are based on collective experiences and interactions with you when you aren’t in the spotlight. How you communicate in the office and in casual conversations is what will shape your reputation, not the moments you step on stage. How you behave and interact with peers determines your level of influence and the trust they have in you as a professional.
Did you know 92 percent of people act upon the recommendation of others – even if they don’t know them? People talk, and others listen. How you treat your employees is how they will treat your customers. If you fail to communicate with consistency, those you influence will fail to do so, too. Be clear and concise in all communications – whether it’s a high-stakes meeting or a casual hallway conversation. Focus on your body language and be an active, intentional listener. When you make others a priority, they will do the same for you and those who matter most to your success.
4. It’s not a brand management campaign; it’s a way of life
Our modern-day world doesn’t allow us to compartmentalise our lives. In today’s age of online observation, our reputations are broadcast for the world to see, which directly affects our bottom line. Consider some highly regarded corporate names. It’s likely their reputations are well managed. They are consistent in their messaging and delivery. They walk their talk throughout all aspects of their brand: from online profiles to customer-facing employees. Now consider companies that have struggled with their reputation. They have likely suffered from inconsistencies in their customer experience, marketing campaign, executive behaviour and employee interactions.
Individual professional reputations are no different than major corporations. In fact, they are one of the most significant concerns major companies face. In a survey of executives, 87 percent said the risk to their reputation was a higher priority to their bottom line, more so than any other strategic danger their company faced.
Fact is, professionals cannot manage their reputation through a one-time branding campaign. We must develop it through consistent behaviours that create trust in those who know and observe us. We can’t just say something is important; our actions must reflect it. We can’t tell employees to invest time and energy in customers but then fail to do the same for them. Reputations aren’t built on a “do what I say, not as I do” mentality. Consistency is key to credibility.
This article was originally posted here on Entrepreneur.com.
Business Ideas Directory3 days ago
20 Innovative Business Ideas Doing Well Overseas (That Could Make You Money In SA)
Business Advice for Women Entrepreneurs1 week ago
How I Run An International Business From A Remote Beach Town In The Eastern Cape
Entrepreneur Profiles2 weeks ago
Inspiring Entrepreneur Siyanda Dlamini Believes You Need To Back Yourself To Build Your Dreams
Entrepreneur Profiles1 week ago
30 Top Influential SA Business Leaders
Entrepreneur Profiles1 week ago
Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)
Entrepreneur Today3 days ago
Nedbank Brings Silicon Valley’s Plug And Play To Africa In Disruption First For The Continent
Business Ideas Directory2 weeks ago
How To Make (A Lot Of) Money On Airbnb
Lessons Learnt1 week ago
6 Habits Long-Time Millionaires Rely On To Stay Rich