"They do all sorts of things 'wrong,' and yet measured by any yardstick you care to name, they nevertheless run laps around the competition," say management researchers Donald Clifford Jr. and Richard Cavanagh, in their book, "The Winning Performance."
In their research on more than 6,000 mid-size companies, Clifford and Cavanagh unearth key success strategies.
Size or niche? During the 1980s, niche clearly won over size. More than 90 percent of the successful companies studied by Clifford and Cavanagh were niche players. Rather than compete on a broad scale, they narrowed the market and served the special needs of a few.
Price or value? Companies that delivered value for their customers grew much more rapidly than those that competed on price. While the successful companies watched their costs, almost 75 percent did not deliver the lowest-priced product or service in the industry.
Innovation or security? More than seven of 10 successful companies in the study started with a new product or service. Further, most grew by creating additional products and services rather than merely enlarging their successful markets.
Bottom line or legacy? As much as people talk about the emphasis on the bottom line, the chief executive officers of growth companies were much more interested in leaving a legacy than in leaving a fortune. They were very concerned about creating and communicating values that represented what they "stood for." And incidentally, and perhaps because of this, many did create considerable wealth.
Analytical or intuitive? The image of the achieving CEO as being a cool, rational, detached leader apparently is largely myth. Clifford and Cavanagh's successful leaders were obsessed with their work -- they lived and breathed the business. Yet, they relied as much on their intuitions as they did facts and analysis.
Employees or shareholders? The most effective way to have employees share in the owner's vision apparently was to make them owners. Most successful CEOs in the study encouraged employees to become owners.
In some cases, the owners even raised salaries so that employees could afford to buy into the company. In other cases, owners actually gave key employees part of the ownership.
Of course, these strategies do not ensure success; they do improve the odds.
Gerald Graham is a professor at Wichita State University and a management consultant. Send questions to the Wichita Eagle, P.O. Box 820, Wichita, Kan. 67201. He will answer representative questions in the newspaper but cannot respond to every request.
What's your growth strategy?
Identify the extent to which you agree with the following by allocating 10 points between each pair of statements.
The most likely successful growth strategy for mid-size companies is:
1. A. Become more comprehensive. B. Serve a niche.
2. A. Offer the lowest prices. B. Offer the best values.
3. A. Take risks with new products or services. B. Improve what has been successful.
4. A. Concentrate on leaving a legacy. B. Focus on the bottom line.
5. A. Rely entirely on rational analysis. B. Have faith in intuition.
6. A. Make the majority of employees owners. B. Reserve ownership for investors.
7. A. Manage by exception. B. Focus on successes.
Add the points allocated to the following: 1-B, 2-B, 3-A, 4-A, 5-B, 6-A, 7-B. Fifty points or more may suggest you are thinking like high-achieving CEOs.