By J. Gary McDaniel, TCV Growth Partners -
Over the course of my career, I have observed that there are some common themes that lead to success in business. I call them the “5 C’s of Success”. Most of these are obvious and are things that we all know instinctively. However, in the fast pace of today’s world, all too often I find myself fighting fires and losing sight of these critical elements. Therefore, I have made it a practice to periodically reflect on what I am doing in each of these areas to see if I need to make changes to put myself “back on track”.
In business, cash is king. And almost every business that fails does so for one reason – they run out of money. Of course there are many causes for this: insufficient sales revenue, uneconomic cost structures, market changes, strong competitors with newer technologies or better business models, poor product quality, poor leadership/management…the list goes on and on. But the result is the same, whatever the reason, the business simply runs out of money. Sometimes this result is unavoidable, but many times it is not.
Managing Cash is a critical aspect of success and Cash Flow Forecasting is a vital tool to evaluate your company’s position, track trends, and identify problems on the horizon while there is still time to take corrective action. Successful companies manage their cash, unsuccessful ones usually do not.
To be successful in business you have to like people and value relationships. Great leaders have extensive and diverse networks that they leverage to create advantage and draw upon for support (see my earlier blog “The Importance of Mentors”).
To achieve success you need to establish strong connections with employees and co-workers, company Directors and advisors, suppliers, customers, bankers, investors and shareholders, politicians, influencers, reporters/media, and many others. Businesses do not achieve success in a vacuum, effective relationships matter.
Effective leadership demands effective communication. You need to communicate with those around you in a dynamic, clear, and candid way. Only then can you sell your vision effectively to others and generate excitement in the process. However, effective communication goes well beyond just the ability to be highly persuasive. The best leaders demonstrate that they are also great listeners. As long as you project confidence (not to be confused with arrogance), it is not a sign of weakness to allow yourself to be influenced by the thoughts and inputs of others, it is a strength. It allows you to garner wider support and shared ownership for your vision because you are involving others in the process.
Culture (collaboration, care, compassion)
Unless your business is a one-person operation, you will have employees- a team. You can be well financed, have the best product or service, a killer business plan, and a can’t miss go-to-market strategy but all of it will come to naught without a team that can successfully execute. Strong execution of your plans and strategies by your team will be the single biggest factor in the success of your business. And what makes a team successful? Culture.
Culture is the everyday reality of organizational life. It is not the mission statement, your balance sheet or your employee handbook. That being said, your organizational culture does encompass all your processes, workflows, policies, and more. And, it impacts everything from employee retention to productivity—and ultimately, your bottom line. Your culture is what you do, what you say, the way you behave, and the way you treat each other. In companies with a good culture, people speak the same language and work together to achieve a common vision, they row in the same direction.
So what should you do? Lead by example. Culture is shaped by how a company’s leaders act. People will listen to what you say, and, more importantly, they will watch what you do. You need to internally and externally reflect the company’s values and be its strongest advocate.
As Brian Tracy said: “There is no success without commitment. Period.” He’s right, and there are no shortcuts.
Commitment is about working hard and having the courage to push forward through the unknowns. As you do that, you will learn and you will develop new capabilities. Experience matters. And, the more capabilities that you develop, the more successful you will become.
There is one more “C” that comes to mind that is necessary for success, “Common-sense”. But, you either have it or you don’t. We can’t help you with that.