Article -> Driving the World's Most Productive Companies
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Date Added: April 2005
In a myriad of business books, “Less is More” by Jason Jennings, is one that is often over-looked. Despite this, it is one that I continue to refer to.
Jennings focuses on discovering the most productive companies and how they use productivity to gain a competitive advantage. He defines productivity as getting more done with less. Key productivity measures include revenue per employee, return on equity, return on assets, and operating income per employee.
He examines thousands of companies. Thousands became eight. There were only eight global companies deemed extremely productive at doing more with less, and all exhibited similar success factors.
Have a BIG objective. This is a company’s long-term strategy, and its culture. It must be simple and understandable by everyone. It impacts the way business is conducted.
Turn the BIG objective into a cause. A cause is not a mission or vision statement. It is a reason for existing and is all-inclusive for employees, customers and suppliers. The cause evokes a strong emotional response from all audiences and is part of the organizational beliefs and values. The CEO should not be the cause because CEOs come and go.
Be strategic, not tactical. The cause provides the roadmap for achieving the BIG objective. Tactical companies focus on financial numbers, while productive companies focus on the cause and business strategy.
Communication and compensation. The most productive companies had open and honest communication from top to bottom. All had structured performance management systems for executives and employees. No special perks for executives, and no layoffs or employee reductions.
Abandonment. Ask, “What do I need to let go of?” What worked in the past, may not work in the present or future. If it doesn’t help achieve the BIG objective, abandon it.
Find, keep and grow the RIGHT customers. Focus on the most profitable customers and abandon unprofitable customers.
Satisfied customers leave. Completely satisfy the right customers. Jennings found that 67% of satisfied customers leave for a competitor, while 93% of completely satisfied customers remain. The eight most productive companies have an ongoing process for complete satisfaction, done by independent, third-party groups.
Document processes. Determine the best core competency processes. Document the processes, and empower employees to continuously improve them through measurement.
WTGBRFDT? This is my favorite. What’s The Good Business Reason For Doing This? The most productive companies ask this question for every decision they make. If the answer doesn’t benefit the BIG objective and cause, why do it?
While simple, the core success factors are difficult to achieve. While some are similar to findings in other business books, taken together, only eight companies in the world truly exhibited them. I have incorporated these into my own business – beginning with a BIG objective to continually asking myself and our customers WTGBRFDT.
“Less is More” is a core book for those in business, as well as continuous learners. I’ve had the privilege of meeting Jason Jennings. He’s a class act, as is “Less is More.” It should be part of everyone’s personal library.