What Successful Companies Have in Common

If you were to ask 1000 people to name the behavior that marks

93 percent of all successful companies, what do you suppose they would tell you?

I didn’t ask 1000 people but I did ask Google, which is sort of like asking the whole world. Here’s what the whole world told me:

“Successful companies focus on what they do best.”

“They invest in their people.”

“They’re passionate.”

“They anticipate the future and stay ahead of the curve.”

“They never quit learning.”

“They have discipline and a financial roadmap.”

“Blah, blah, blah.”

I was staring at a list of 86 different characteristics when the truth finally hit me: “Half of these people are guessing and the other half are just preaching a sermon about their personal values and core beliefs. Not a single one of these writers has actually gathered the facts.”

Then I stumbled onto a book review written by Eric Barker of Time magazine.

Amar Bhidé went to Harvard, became a proprietary trader for E.F. Hutton, a consultant for McKinsey and Company, and then a college professor and a world authority on capitalism. In his third book, The Origin and Evolution of New Businesses (Oxford University Press,) Bhidé brought all the rigor of academia to his investigation of the characteristics of successful companies.

God bless Amar Bhidé.

What he found was that 93 percent of all successful companies had to abandon their original business plan — because the original plan proved not to be viable. “In other words,” wrote Eric Barker of Time, “successful companies don’t succeed because they have the right strategy at the beginning; but rather, because they have money left over after the original strategy fails, so that they can pivot and try another approach.”

Mary Whaley summarizes Bhidé’s book by saying the winners in business “survive and prosper because of an ongoing ability to adapt to opportunities and problems, are subjected to many detours, and stumble often along the way.”

Successful companies have an ability to improvise.

Unsuccessful companies blindly “stick to the plan.”

The principal difference between hope and a plan

is presumption about the future.

The intended plan is deliberate.

The improvised plan is emergent.

According to Eric Barker, “Deliberate is what’s in the business plan, the PowerPoint deck, the list of goals. And that’s what ends up changing 93% of the time. Emergent is what you find along the way. It’s when your baby nephew ignores the gift you bought him… but LOVES the shiny wrapping paper. The heart medication research… that ends up becoming Viagra.”

“Intel’s decision to accept an order from Busicom, a second-tier Japanese calculator company, started the company on its path to microprocessors. Sam Walton’s decision to build his second store in another small town near his first one in Bentonville, Arkansas rather than in a large city, led to Wal-Mart’s discovery of the attractive economics of building pre-emptively large stores in small towns.”

– The Processes of Strategy Development and Implementation,

Clayton Christensen and Tara Donovan

Novelist E.L. Doctorow once said, “Writing a novel is like driving a car at night. You can see only as far as your headlights, but you can make the whole trip that way.” The same thing is true of running a business.

There’s a line in Psalm 119 in which the writer says to God, “Your word is a lamp unto my feet, a light unto my path.” When I was a very young boy, one of my teachers pointed out that a footlamp provides only enough light to see the next step. You can’t see further until you’ve moved forward in the light that you have.

I’m betting E.L. Doctorow has read that verse.

One step at a time.

And when something unexpected

appears in the light, always be ready to improvise.

Roy H. Williams

PS – When I asked Princess Pennie to proofread this memo before I sent it, she read it carefully, then look at me and smiled, “Even God had Plan B.” – RHW