Remember the last time your company faced a crisis? That terrible month when you were overdue on a big order and risked losing a customer? Or the day your telephone lines went down, isolating your company from the outside world. That was the bad news. The good news was that everyone in the company pulled together, getting the job done and saving your company from disaster.
When you think about it, that happy ending was hardly an accident. Instead, it was the byproduct of an extraordinary syndrome that makes companies perform best when they are under fire.
Faced with a "do or die" situation, managers and employees tend to work together to achieve a common goal. But there's no reason this kind of teamwork has to be limited to crisis conditions.
"Small companies should try to harness the powerful force that emerges during difficult periods, using the same kind of energy to drive the business on a daily basis," says Katherine Catlin, a management consultant who works with growing companies. "This can be done by building five critical elements -- mission, vision, strategy, structure and culture -- into the management of the company. Properly implemented, this creates a circuit that effectively integrates the performance of the company's managers and employees, uniting them in pursuit of a common objective. I call it 'the profit spiral.' "
Let's briefly explore the five elements of Catlin's profit spiral:
* Mission is the company's statement of a clear and compelling purpose. It describes what the company stands for, such as unsurpassed customer service, leading-edge technology or partnership with employees and customers.
"A publication I work with holds that it is in partnership with its readers, advertisers and employees," Catlin says. "This means it is willing to listen to and relect the ideas of all of its constituencies rather than simply dictating to them. That's an effective mission statement."
* Vision is a picture of what the company hopes to achieve at a given point in time.
"Perhaps one of the best examples of a clearly articulated vision was John Kennedy's speech in the early 1960s when he called for an astronaut landing on the moon by the end of the decade," Catlin says. "That worked so well because it was specific, carried a firm deadline and fired the imagination of the public."
Creative exercises can be used to create a corporate vision and to communicate it to employees. For example, try telling all of your employees at the supervisory level to imagine that your business will be named company of the year in 1998. Then ask them to write a brief paper on what would have to be done to achieve that honor. Their thoughts and conclusions can provide a direct route toward achieving your vision of a premier company that is among the best in its field or industry.
Strategy: If we think of the company's vision as its "dream," strategy is the process that links the dream to reality. Specifically, this is done by developing a series of plans for serving customer needs, distinguishing your business from the competition and effectivley managing internal strengths and weaknesses.
"This is where most managers usually start and stop - setting plans for the business without first establishing a clear mission and vision," Catlin says. "When that happens, everyone in the business lacks focus."
* Structure: For a company to function as a team, its internal structure must be more than a hierarchy of reporting relationships. Instead, it must be a means of organizing people so that they understand what is expected of them and they know what to expect from others. This is done by defining a network of "internal customers."
"Each department or function in the company must understand the other departments in the company," Catlin says. "For example, the marketing department has considerable information about the customer. Only if it shares this information with the production people can they build in the features the customer wants."
* Culture is the environment in which all of the other components of the management system come together. To be effective, the culture must create an empowering environment that gives employees the ability to make decisions and to take actions to achieve the company's objectives.
"When all five of these elements are brought together, people in the company have a clear and consistent direction that guides their work," Catlin says. "That goes a long way toward making the company an effective competitor."