Seven years ago, I worked with a struggling manufacturing company located in a very old and small building on Cleveland’s near east side.
The first time I met the owners, I got a very special feeling that certainly didn’t come from their facility or their financial condition — they were definitely struggling. The combination of low sales and low margins made cash very tight. Paying the owners a decent salary was not even on the horizon.
Yet, they were so positive and obviously committed to making this business successful that I knew this client had real potential.
Today, the company is located in a beautiful new suburban facility and is the market leader in its niche. It has a motivated and dedicated work force and has met its sales projections while achieving an envious bottom line. It is one of those companies and success stories that make a career in consulting rewarding.
So what makes a company like this become a star performer and achieve such lofty successes?
Many factors come into play. But if you analyze any star company, you’ll find two common underlying elements: commitment and focus.
Committed to succeed
When I first met the family owners, I could tell they would do whatever it took to succeed. Despite the struggles, they had a true commitment to their vision and eschewed all opportunities to leave the company and take higher paying jobs elsewhere.
They reinvested in the business even when they were taking meager salaries.
Today, that commitment remains. They continue to reinvest, to build the best team possible, to strive to be the market leader and to not rest on their laurels. They develop new products and invest in R&D. The family spends more money on marketing and product development than most manufacturers of their company’s size.
Considering their commitment level, I would have been surprised if this company did not succeed.
Focused to grow
But its leaders didn’t quit with commitment. When they added their strong focus, they became a sure bet for star status. I have heard it said that no growing business can have too much focus. But to reap the benefits of a strong focus, a company needs to truly understand itself and its environment. Our star manufacturing company really understands who it is, what it wants to accomplish and what it’s good at.
To really have focus, an organization needs clear vision. It must understand its niche. That’s important because when leaders veer off course into areas outside the company’s core competencies and vision, if they know their niche, they will recognize the situation and get the focus back.
The payoff
Five years ago, we helped the new ownership team of a long-established contracting company develop a strategic plan for the rebirth of the company. Last month, we held a five-year review and update session.
We looked back at the success that the company had achieved over the last five years. It was evident how the team members commitment and focus helped direct and enable its success.
The original plan helped them define their focus. They identified their vision for the type of company they wanted to be, the type of work they wanted to pursue and the growth path they wanted to follow. During the initial planning process, the team made a commitment to that focus, then reconfirmed that commitment throughout the next five years.
At last month’s session, as we reviewed the progress of the company, we found that it had achieved nearly every one of its targeted growth goals (including profitability targets). Everyone agreed that the organization functioned today as they had envisioned it would and that overall, the partners were very pleased with where they were and what they had accomplished.
As an outsider who had witnessed their progress over five years, it was clear to me that a good part of their success came form their total commitment, individually and as a team, to stick to the plan and remain focused on their vision.
These are just two examples of star performers that stand apart and have a brighter future than many others. It’s not because of their products or markets but because of a total commitment to their plans and to their goals and a clear focus on their visions. Joel Strom ([email protected]) is president of Joel Strom Associates Inc., Growth Management. His firm works exclusively with closely held businesses and their ownership, helping them set and achieve their growth objectives while maximizing their profitability and value. Reach him at (216) 831-2663.
