Focus on these 4 keys to create a company that can weather any economic storm
BY ELIAKIM THORPE
Marco and Marissa are emerging entrepreneurs who recently went into business together. During a lunch meeting, they began to discuss their future profit projections and how well they expected their business to perform financially six months after opening. What began as a conversation about dollars and profit margins quickly turned into a debate over the Great Recession and the benefits of transforming a company primarily driven by profit to one led by purpose-driven employees.
Marco prefers to discuss profit strategy, profit projections and profit margin regardless of the current economic conditions affecting revenue. He believes the company can be financially resilient during economic turmoil if they develop a profit strategy. On the other hand, Marissa believes in maximizing human capital—not necessarily every employee, but those who’ve demonstrated passion, dedication and an unwavering commitment because of their belief in the values of the company. She is confident that if people change, the company will change and weather any economic instability.
Rose, a well-respected manager, joined in and shared her perspective on the importance of organizational transformation that must be internally driven by people, and not solely motivated by bottom lines. She believes that if human capital is not leveraged properly within a company, transformation can never occur and the development of a profit/revenue strategy will be insufficient in an ever-changing global economy. Conversely, some of the most resilient companies can encounter troubles because they fail to realize the importance of organizational transformation. The most successful brands implement organizational transformation designed to change people and not organizational structures.
Rose and Marissa are correct. The engine to every economy is people. Without people there is no economy. Purpose-driven, passionate, talented and dedicated employees make transformation successful. As an enterprise, you evaluate what is in your control and what you can influence. You can’t control market conditions, inflation or the economy. But you can control the growth of people and the emphasis you place on having a transformed workforce during a prospering or declining economy.
When you embark on your leadership journey to foster a transformative work environment, it is critical that you can ensure consistency and long-term success. There are four keys to reproducible results for business leaders, entrepreneurs and executives to consider on the path to transformation.
1. Engaged employees
During any transformational process, companies must understand that the greatest commodity at their disposal is not products, profit or capital—it’s people. Every dimension of a transformational company is tightly connected to its people because they are the greatest asset of any business.
Your workforce must be your company’s cornerstone if it is to be successful, profitable and sustainable. Without people, there is no company. When members of your workforce feel and believe that they have a direct stake in the future of the company, they become invaluable assets toward your transformative goals.
2. Organizational culture
Every company must learn to be intentional about the attitudes, behaviors, values and guiding principles it broadcasts. Whatever a leader publicizes becomes a company’s organizational culture. Organizational culture is built on convictions, conduct and character. If managers or leaders are unable to demonstrate these three Cs, they will create bad attitudes, unwanted behaviors, limited perspectives and difficult working environments.
And developing this culture requires a committed and consistent articulation of the values that contribute to the social and psychological environment of any company. A culture that includes expectations, experiences and a shared philosophy provides guidance on how a company interacts with its employees and its customers (in a larger context, its community and society). In essence, organizational culture simply is the temperament of an enterprise led by a leader who is skilled in setting the temperature. The temperament of the leader will determine the culture of a company. A strong organizational culture becomes the GPS when a company loses it way.
3. Improved performance
Every company wants a greater return on investment. Increased output and productivity come at minimal cost when employees are engaged and a strong culture courses through your company. Many businesses define performance as the intellectual and physical energy of an employee and should meet a specific job responsibility. Performance means leveraging the capabilities of a workforce to generate greater output. The better the alignment with vision and value, the more likely people will rise to greater output. The components of a productive and high-performing company include decisive and quick decision-making, fast-to-market strategy, and the ability to maintain momentum. Leaders must be skilled at energizing workforce gifts and talents if you want greater productivity. When employees are motivated, greater productivity is manifested.
4. New product innovation
Creativity and ingenuity must be at the forefront of product innovation. Employees want to create impact. The best way for that to occur is to enable them to be part of the innovation-based projects in your company by letting them get their hands dirty. Ideation is important, but being part of implementing the ideas that come to life can be a more exciting and meaningful growth opportunity for your employees, inspiring them to perform.
In addition, provide your employees with the resources they need to be innovative in their work. When given the right tools and resources, the best employees instinctively will challenge themselves to be more innovative—and will perform better. When a company is immersed in a transformational culture—not just ideation—innovation occurs.
Companies that are successful in their transformational endeavors are people centered, purpose driven, solution focused, service oriented, profit savvy and innovatively positioned to create lasting change. The challenge in business leadership or entrepreneurism nowadays is the ability to be resolute and steadfast in an economic climate that appears to promote profit above partnership with consumers to create lasting change in and around the community. Companies are more likely to face adverse economic conditions if they are primarily driven by profit. Investment in people must be at the center of any transformational organization.
Close observation of successful companies during adversity found that those that believed in transformational leadership styles and a workforce with a transformative and evolved culture enjoyed a boost in profits, highly motivated employees and stronger organizational outcomes.