Several years ago, my firm surveyed some of the Philadelphia Business Journal’s Top 100 fastest growing privately held companies about their success. Do these executives know something you should know? Here’s what we learned then, and let’s see if it still applies.
First, most of the presidents of the Top 100 companies don’t really know, or find it hard to put into words, what it is that makes them successful while others struggle. We learned more about the presidents by talking with their subordinates about them. As a group, they are strong-willed, hard-driving, opinionated. They are more interested in getting things done than generating work. Most said they were great believers in customer services.
When asked to describe what makes them angry, several said they are becoming impatient with their own companies. Things that used to get done more quickly are starting to get bogged down in committees. This is a real challenge for the head of a growing company. If he/she gets frustrated and starts dictating decisions, he/she risks undoing progress toward shared responsibility, delegation, and reduced dependence on one key person, but if he/she says nothing, the company risks missing opportunities, losing its leader and “analysis paralysis.”
Several of them are facing this delicate balance on a daily basis. Do they know something that you don’t know about how to do this? Several suggested that the verdict isn’t in until the business has been able to sustain profitable growth for several years. David Hastings of Cone Software thinks they’ll be fine as soon as they reduce what he calls the FUD factor. “We need to do everything we can to remove things that increase customers’ fear, uncertainty and doubt,” he said.
Many of the heads of the Top 100 told about how the recession has increased the cost of doing business. Prospective customers who are afraid to make a mistake are seeking detailed proposals and delaying their decisions not realizing that that leads to escalated prices and missed opportunities.
Many credited market niches for their growth. Gerry Davis of A & B Insurance Damage Restoration Inc. said, “A small business must carve out a niche and service that niche constantly. Too many successful businesses stray away from what pays the bills. Real success in small business means being constant and reliable.”
A & B Insurance isn’t alone. The product descriptions of the companies reveal that few view themselves as generalists who can do anything for anybody.
Sometimes it takes a gimmick to prevent personal preferences from interfering with market-led product selections. Hastings said Cone no longer allows the firm’s principals to participate in product development. “We avoid featuritis that way,” he said.
Does the Top 100 know something unique about management? None said they had any secret recruitment method. Terry Zeigler of Datacap Systems Inc. said, “It’s important to hire ambitious people. I have yet to see ambition follow motivation.”
Allen Barnett of Astro Power said it’s important to hire people with different talents: “Some to make it happen, some to watch it happen, and some to explain why it did not happen.”
When we asked for their management approach, we felt like we were hearing quotes from textbooks. We suspect several have been reading management books lately. That’s a good sign, actually, and maybe it’s another secret to success. The majority of the presidents have expertise and training in something other than business management. The list includes several salespeople, engineers and other “techies,” but they don’t assume they know all there is to know and are augmenting their background as they go.
Do they have any secrets to share about money? Ellen Davis of Incredibly Edible Delites Inc. advises that it’s important to be “cautious, but not frugal.” She sees “reinvestment of profits for growth” as one of her company’s secrets to success.
Perhaps the most revealing question in our survey was the one about cashflow. With few exceptions, the presidents claimed no unique wisdom in managing cashflow. In fact, it was fairly apparent from their answers that tight cashflow was the biggest threat to their continued success. Zeigler of Datacap recognized that they must look pretty smart to other entrepreneurs at this point because they built their cash reserves “in preparation for their growth curve and recession.” Some were concerned that their companies will begin to miss opportunities because of their cashflow problems. A few can see that they could become “risk adverse” because of cashflow worries. That bothers them because they recognize that their willingness to take risks has been one secret to their success to this point.
Any one of the Top 100 risks bankruptcy with his/her next big decision. It’s clear that most of the presidents understand there are no guarantees. Just because a business is growing today doesn’t mean that it will even exist next year.
It’s clear that although technology has changed the way that we do business today, owners and presidents had the same core concerns and issues ten years ago. Take an honest look back; examine the similarities and differences in your firm and how you problem solve. In another ten years, we may be looking back on how you are doing things today and comparing.
Known as The Growth Strategist®, Aldonna R. Ambler, CMC, CSP helps businesses in Achieving Accelerated Growth With Sustained Profitability® through a combination of speaking, consulting, executive coaching, authorship and growth financing. Aldonna can be reached at www.TheGrowthStrategist.com or 1-888-253-6662.