In trying to better quantify factors that contribute to excellence, we surveyed more than 300 small businesses (each with 10 to 100 employees) that included a range of service, product and project-oriented companies. The participants, who were all owners or senior leaders in their organizations, rated their businesses on many different areas of performance.

For this analysis, we evaluated organizations based on a combined factor of growth and profitability. 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 the contrasts were significant.

1. Strength of the Leadership Team

In our research, the leadership teams of top-performing organizations rated 155% higher than the lower performers. There were two primary factors evaluated in this rating. The first was the ability of leadership to define a clear vision for the company. For full effectiveness, the vision needs to be well-defined and explained in a way so people connect with it and are motivated by it.

The second major factor was appropriate involvement of leadership in leading and supporting projects that are strategic to the organization. People in organizations (and everywhere, for that matter) read the actions of leadership to determine what’s important and what’s valued. Strategy statements and posters by themselves are ineffective.

One client expressed it this way: “People go in the direction leadership is walking, not pointing.” The research suggests that the leadership of high-performing organizations know where they want the organization to go, make sure everyone else understands the direction, and are visibly engaged in helping the organization move in that direction.

2. Attract and Retain Quality People

Top-performing organizations are rated 142% stronger at attracting and retaining high-quality people than the lowest performers. Finding people, motivating them, compensating them, keeping them focused, and keeping them satisfied are always hot topics in focus group research and in conversations we have with business owners. This is one of the most dynamic challenges for all businesses. The best small businesses have figured out that success in this area starts with recruiting.

It’s very hard to overcome a hiring mistake, and excellent businesses leave nothing to chance in making their hires. In addition, the top small businesses use the strength of their leadership teams, their stability, their sense of purpose, and the quality of people around them to retain people once they’re on board.

-From Gary Harpst’s Six Disciplines for Exellence

Next week we will discuss the next 3 areas where the contrasts were significant



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