What Really Works - The performance secrets of the world's most successful companies - William Joyce, Nitin Nohria, Bruce Roberson

The performance secrets of the world's most successful companies

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What really works
The 4+2 formula for sustained business success

William Joyce, Nitin Nohria, and Bruce Roberson
Publisher: New York: Harper Collins Publishers
ISBN: 0060512784  

This is a synopsis only.  RESULTS.com recommends you buy the original book.

“The Evergreen Project” provided the content for this book – researched 160 major companies in equivalent industries over a 10 year period and found there are 8 management practices directly correlated with superior performance (in terms of total shareholder returns).

Contrast with other well known research:

Tom Peters – In Search of Excellence: Studied successful companies (winners) only.  Doesn’t tell you whether losing companies also use similar methodologies, or what made them falter.

Jim Collins – Built to Last / Good to Great: Studied successful companies and compared them to a control group of average / loser companies. Did not differentiate between cause and effect e.g. – does attracting talented employees lead to superior performance, or did superior performance attract talented employees?

In contrast, “The Evergreen Project” not only looked at successful companies (winners), unsuccessful companies (losers), it also looked at those whose performance changed for better or worse over the 10 year period (climbers and tumblers) and identified the cause and effect of these changes – thus identifying which management practices really work

Here’s what really works:

The 4 Primary Practices: (excellence in all 4 required)

The 4 Secondary Practices: (excellence in 2 out of 4 required)

The Primary Practices: (excellence in all 4 required))

1 Strategy:
Make your strategy clear and narrowly focused

• Stick to the core business (stick to the knitting)
• Growth focused
• Communicate strategy clearly – must be well understood by employees & investors
• A hallmark of winning companies is their ability to share their strategy with customers
• Must have a clear brand promise for the customer
• Match company capabilities with your target market segment needs
• Continually research customers, and monitor competitive environment
• Fine tune strategy to match changes in environment and customer behavior

2. Execution:
Flawless execution

• Consistent and disciplined
• Choose both growth and efficiency – not one or the other
• Consistently deliver brand promise – keep your promises to customers
• You must meet customer expectations – never disappoint them
• Empower front line staff with authority to respond to customer needs
• Convenience – be easy to deal with
• Improve productivity – eliminate waste

3. Culture:
Build a performance-based culture

• Clear company values – ensure your people know and live by these values
• Inspire people to do their best
• Challenging / fulfilling / fun work
• Fun (happiness) is useful but secondary to performance
• Reward based on achievements – keep raising the performance bar
• Courage to get rid of poor performers

4. Structure:
Make your organisation fast and flat

• There is no ideal one best structure
• Simple is best - fast and flat
• Reduce bureaucracy and complexity – Simplify!
• Promote cooperation & information exchange across whole company
• Eliminate internal parochialism, competition, and turf wars (them vs us)
• Regular meetings to bring department heads together and force cooperation
• Put your best people closest to the action (not stuck in the office)
• Keep your frontline stars in place (make it worth their while to stay at the coalface & specialise in their role)
• Eliminate the distinctions between leaders / managers and any other role – every role is equally valuable

The Secondary Practices (excellence in 2 out of 4 required)

1. Talent:
Make talent stick around and develop more

• Senior managers personally involved in finding and retaining talent
• Preference for developing talent from within (Hired guns are less loyal)
• Provide top of the line education and training for staff
• Retain talent by providing work that is meaningful and challenging for them
• Always have replacements for each role groomed from within the organisation

2. Leadership:
Make your leaders committed to your business

• The leader’s decision making style does not matter, nor do their personal characteristics – no particular leadership style was correlated with winning performance
• Leader must be fully committed to the business
• CEO accounts for 15% of a company’s performance for better or for worse
• On average 50% of executive pay was linked to performance in winning companies (loser company executives had less pay at risk)
• Miss your target – miss your bonus
• Leaders need to communicate their vision so convincingly that others will adopt it
• Leaders need integrity in their words and actions.  People must trust them
• Future focused – leaders need to see opportunities and spot problems early
• Leaders and managers need to build strong relationships with their people
• Board of Directors need to have a substantial financial stake in the business, thoroughly understand the business, and be passionately committed to its long-term success
• Board must not rubber stamp CEO decisions.  They must play an active strategic role 

3. Innovation:
Make industry-transforming innovations

• Introduce disruptive technologies and business models
• (Not just continuous improvement)
• Apply technology to enhance internal processes
• Anticipate rather than react to industry changes
• Cannibalise your existing products – continually create new products to make your existing products redundant (launch a new model, open another branch etc)

4. Mergers and partnerships:
Make growth happen with mergers and partnerships

• Merge for growth and synergy, not diversification
• Buy their customer base
• Or buy a business that complements your strengths
• Partner with companies to create synergies for both parties
• Small regular strategic deals rather than occasional mega-mergers
• Planned process for spotting and processing deals, not ad-hoc spur of the moment

What doesn’t work:

The Evergreen project found no correlation between the following and total shareholder returns

• Investment in information technology
• Corporate change programs
• Supply chain management programs
• Attracting high quality outside directors
• Learning organisations
• Team-based management
• Total Quality Management (TQM)
• Outsourcing execution
• Enterprise Resource Planning (ERP)
• Customer Relationship Management (CRM)
• Whether business is structured geographically, or by product
• Whether business units have profit and loss responsibility or not
• The quality of HR staff
• Fast track development programs
• Formal mentoring programs
• 360 degree performance appraisals
• CEO’s decision making style (winners can be independent or collaborative)
• CEO’s personal characteristics (winners can be patient or impatient, secure or insecure, big picture or detail oriented, quantitative or qualitative in their approach)
• Diversifying as a reason for mergers and acquisitions

   

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