Vision
December 1, 2004
Q: I run a nice business but I wouldn't call it a "great" business. I was wondering if you have any tips on what it takes to create a great business. -- Vince, Ontario, Canada
A: In the book Built to Last
authors Jim Collins and Jerry Porras sought to answer that very question: "What
makes the truly exceptional companies different from other companies?"
Interestingly, they found that more than a desire for profits, more than a plan
to produce pleasing products, the best businesses are founded on, and driven by,
vision.
It helps to remember that every amazingly huge, Fortune 500, NASDAQ-traded,
stock-splitting, name branded, well-known company you see once started out as a
small business. Yet by adhering to their vision they were able to grow
beyond their humble roots and become something special.
And when I say special, I am not referring to money or profits, though money and
profits are nice. I am talking about a business that makes a difference - for
its owners, its employees, and its customers.
So what are these traits?
1. Create a Visionary Organization. Bill Boeing's first plane was
such a failure that his aircraft company sold furniture for a few years.
Microsoft lost money its first two years. Walt Disney went bankrupt before
coming out with Steamboat Willie.
So it is not your great idea that will sustain your business, it is your great
business that will sustain the idea. The business is the thing. A
slow start can be handled as long a strong foundation is being laid. A
visionary organization creates visionary products and profits, not the other way
around.
2. Have Values and Live by Them. To start a small business you have
to be idealistic; if you were not, then fear, criticism, the unknown, or the
naysayers would have stopped you. So we know you are idealistic. The
trick to sustained business greatness then is to transform that idealism into a
set of core business values. The best small businesses have core values
and live by them. These values guide owners and employees alike in their
everyday activities.
For example, Henry Ford is widely credited with helping to create the middle
class by introducing both the five-day work week and the $5 day (roughly double
the prevailing wage.) The Wall Street Journal denounced this last action,
stating that Ford had "injected spiritual principles into a field where they do
not belong."
The point to take away is that great companies value values. They are not
just enterprises created to make a buck. These businesses have a core
ideology of which profit is but one ideal.
Every small business should decide for itself what its core values are.
You do not need a reason and do not need to justify them. They are your
core values. Figure out what they are and live by them.
3. Think Big. The most successful small businesses create clear,
specific, big goals and then organize to achieve them. When Ruth Handler
decided that her small toy company would create a doll that was a shapely woman,
not a baby, as all girls' dolls had been up to that point, the goal was huge.
It changed the entire direction of her business. But her business - Mattel
- and her invention - Barbie - transformed an industry.
4. Experiment. Grand visions and strategic plans are wonderful, but
it often takes plain old trial and error and plenty of experimentation before
the magic combination hits. Failures happen, but you have to keep throwing
stuff against the wall to see what sticks. R.W. Johnson Jr. of Johnson &
Johnson famously said, "Failure is our most important product."
In the end then, to create a great small business, you must have a vision.
Dare to dream big dreams and have big goals. Commit to them and then chase
them. Enroll your team in your cause. Try something new, then try
something else. Make sure you small business means something; if it
personifies your highest values you will be creating a business of which to be
proud.
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Today's tip: In 1960 David Packard of HP gave a lecture to a group
of employees. There he said: "I want to discuss why a company exists in
the first place. Many people assume wrongly that a company exists simply
to make money. As we investigate this, we inevitably come to the
conclusion that a group of people get together and exist as an institution that
we call a company so that they are able to accomplish something collectively
that they could not accomplish separately - they make contributions to society."
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