Lately I've been thinking about how businesses can thrive in our current economic climate, especially with so many new businesses being created every day. My good friends and business growth experts Brian Tracy, best known for his classic book "Eat That Frog!" and Mark Thompson, best known for his New York Times bestseller "Success Built to Last," have written a new book called "Now, Build a Great Business!" In it, they've identified the seven fundamental strategies that all successful businesses follow that lead to greater profitability and sales in any market.
Recently I had the opportunity to catch up with them in San Diego. The following is Part 1 of the fascinating discussion I had with them about their new book.
MG: How did you, two of the world's foremost authorities on success, come together as coauthors? What drew each of you to collaborating on "Now, Build a Great Business! 7 Ways to Maximize Your Profits in Any Market"?
BT: Mark and I have worked individually with hundreds of businesses over the last 20 years. We have mutually identified certain things that successful businesses do to that lead to greater sales and profitability in any market. We have simultaneously seen many businesses undermine their success in the marketplace and often go out of business because they failed to do one of these seven simple business activities.
We both have a tremendous desire to help our clients to be more successful. We began talking about this book two years before we wrote it. Finally, we sat down and identified the chief characteristics of successful, profitable businesses in any industry, in any market, and began to assemble these ideas into a book that would be easy to read and easy to apply.
MG: The economy is precarious, the stock market is volatile, and competition is constantly changing. So why, as you stress in your book, is it a great time to start a business?
MT: Whether it's Google, FedEx, Schwab or hundreds of other successful companies we studied, most of those that are still in business during this current tough economy started in "bad" economic cycles for five key reasons:
First, when the economy tanks, companies cut customer service. Customers are underserved and abandoned and may even blame their current relationship. They are much more prone to consider switching loyalties at this time, and as you may know, acquiring customers is perhaps the most difficult and expensive thing any company does.
Second, while your competitors are cutting spending on advertising and marketing, you can buy it for bargain prices. Third, those employees who were unavailable or unaffordable will consider working for you in a tough market environment. Fourth, all of the infrastructure you need, from leases to computers and desks, are all on sale.
Fifth, there are fewer competitors, period. If you've started in a tough market, there is a better chance you learned something about managing in difficult economic times!
MG: Before we get into the nuts and bolts of building one, how do you define a "great" business?
BT: In its simplest terms, a great business is one that has a great product or service. This is defined as something that people really want, need, can afford, and can enjoy and take full advantage of.
The simplest measure of all to predict a business success is to calculate the number of times that a customer, after using your product or service, or visiting your place of business, says the magic words: "This is a great company! This is a great service! This is a great business!"
Every successful business or product in the marketplace is described as being a "great" product or business. When everyone in your company is focused on eliciting this response from every single customer, your business will transform very quickly.
One of the seven key elements that Mark and I found that all great companies have is a great product or service.
MG: Is becoming a great business leader really within reach of anyone? What qualities are most critical for an aspiring business leader to learn and develop?
MT: Leadership is the first of the seven fundamentals that we talk about in the book and is incredibly important topic.
Yes, becoming a great business leader is within reach of anyone. The question is whether you're willing to commit yourself to learn. The father of management, Peter Drucker, once said that there may be natural-born leaders, but there are so few of them that they make no difference in the greater scheme of things. The truth is that your skills as a leader are borne out of your passion, your tenacity and necessity to grow your career and organization. There are five major qualities you must develop:
First, leaders are proactive. They are always thinking in terms of what can be done to achieve more and better results, fully aware that most things don't work the first time.
Second, leaders are learners. They practice the skills that are necessary to succeed in their job. For example, they commit themselves to learning that one new skill that will double their performance every year.
Third, leaders give credit and take responsibility. This means when things go right, you motivate your team by giving them credit. When things go wrong, you address those issues directly by taking responsibility for doing better next time.
Fourth, leaders measure performance. You can't change what you don't measure. The first question they ask is, "What am I trying to accomplish here? What must be done that only I as leader must do?"
Fifth, leaders are clearly focused on the goal and flexible about how to get there. Remember, there is no such thing as failure; there is only feedback. As Phil Knight, the founder of Nike, said, "You only have to be successful the last time."
Brian Tracy is one of the world's foremost thought leaders on personal and business success. In the past 30 years, he's consulted for more than 1,000 companies, and has spoken to over 5 million people worldwide.
Mark C. Thompson, co-Author of "Success Built to Last," is one of the most successful senior business communication executives and angel investors of our time. He has been a board member and advisor to Global 1000 companies and is former Charles Schwab Executive.