Five Secrets of High Performing Organizations

How the Best Differ From All the Rest

Part No. 11061009

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How the Best Differ From All the Rest

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BSTRACT

The best performing small businesses have five factors in common:

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a strong leadership team

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the ability to attract and retain quality people

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a disciplined approach to their business

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the ability to strategically use technology

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the wise use of trusted outside providersTop-performing organizations rate not just a little better in these five areas -- but at least

100% better.

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NTRODUCTION

“In 1989 my former business, Solomon Software, was 9 years old, but wewere on the brink of failure,” said Gary Harpst, Founder of Six Disciplines.“I was working long days but my business had stalled. I started questioning my own abilities. I sought out another business owner inwhom I had confidence. I’ll never forget what he told me. He said, ‘Gary you have to get a handle on expenses or you won’t be in business for long.’ I knew I had to take action. But mostly my actions were trial and error. It took many mistakes to learn how to consistently be successful.”

Fast forward 11 years later. Solomon Software Inc. under Gary’s leadership went on toachieve revenues of $60 million. The company was sold to a top rival for $142 million andeventually became part of Microsoft.Gary resolved to help other independent business owners and executives learn theprinciples it took him years and countless mistakes to learn.He engaged a research firm to conduct research to identify those factors that the highestperforming organizations have in common. He also founded Six Disciplines Corporation todistill that research and other information into a practical methodology for small businessleaders.

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This paper looks at the results of the research. It identifies five factors that the top 25% of businesses have in common. We will examine each of those five factors. We not only willidentify the five factors, but we will show you how to use them to your advantage in your business.

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Our research set out to find the answer to one question:

Which factors have the biggest impact onsuccess in a small business?

What we learned surprised even us.Before we get to the answer, let’s first take a look at the background research and whatprompted it.General advice about how to run your business is relatively easy to find today -- on the Web,in newspapers and magazines -- even on TV. What is far harder is to identify

exactly

whatmakes the difference between the most successful businesses … and all the rest. It is evenharder to quantify and rank the factors that the most successful businesses have incommon, in order of importance: first, second, and so on.We wanted to know not only which factors successful businesses had in common, but whichones were

the most important

. And we wanted to back it up with research.To answer the question, we engaged the services of the market research firm

Research for Action

to survey more than 300 businesses. Each of the businesses we surveyed hadbetween 10 and 100 employees. The industries represented in the sample group included arange of service, construction, manufacturing, finance and other companies.All participants to the survey were owners or senior leaders in their organizations.We asked the survey participants to rate their businesses on different areas of performance.For this analysis, we evaluated organizations based on two combined factors: growth andprofitability. (For more on the survey analysis and the detailed findings, see the Appendix.)We thoroughly analyzed the results and looked for areas where the lowest- and highest-performing organizations were the most different. We found several areas where thecontrasts were significant – even dramatic.

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