In business as it is peculiar to most important things in life, there are certain fundamental truths you cannot do without in
Is there a magic formula for business success?
order to succeed.
For instance, everyone instinctively knows that long lasting success in any sphere of life is unattainable without handwork. In essence, hard work becomes an essential element in the composition of factors necessary for achieving success.
In the same way, there are certain “must have” pillars that are crucial to the success of every business. This is a matter of fact. When these fundamental pillars are lacking in any business, success is often unattainable. Identifying and applying them to your business, is what this unusual article is all about.
Enjoy!
The 5 Essential Pillars Of Business For Guaranteed Success
If you are going into business and your sincere desire is success, here are the 5 pillars you need to focus on consistently;
- PURPOSE
- PEOPLE
- PROCESS
- PRODUCT
- PROFIT
1. PURPOSE
Every business started with the conception of an idea [solution] or the recognition of a need [problem].This is the very first pillar of a business and the source of its purpose.
Businesses that succeed don’t exist for nothing, they exist for a reason. Purpose is your reason for existing as a business and that reason must be clearly defined.
The moment you venture into the world of business without a clear-cut reason, you‘ve already chosen to fail from the beginning. Also, the moment you venture into the world of business with a wrong reason, you’ve equally chosen to fail from the beginning.
The challenge is simple, what is the right reason for venturing into business if one is to succeed?
The only right reason for venturing into business if success is what you seek is to find a purpose greater than just making money.
I am used to saying this and won’t stop saying it; successful businesses are built on purpose not profit.
Why is this so?
BECAUSE PURPOSE IS PROFITABLE
Purpose in a simple term is the impact you are in business to make.
Purpose is the change you started a business to create.
Purpose is the difference you are in business to make.
Purpose is the problem you are in business to solve.
Purpose is the big picture behind your business’ existence.
Purpose is the value you created a business to add into people lives.
Purpose is the essence of your business’ existence.
The Essence Of A Thing Is The Fundamental Reason Why It Exists!
The essence of medicine is healing.
The essence of education is learning.
The essence of leadership is empowerment.
The essence of thinking is problem solving.
The essence of working is achieving results.
And the essence of business is customer satisfaction.
Meaning, until a customer is satisfied, a business is not fit to exist.
To satisfy a customer is the fundamental purpose why a business should exist. The moment a business fails to satisfy a customer, the business must stop to exist.
Your purpose for being in business therefore, is to satisfy customers by meeting their needs and solving their problems better than anyone else.
Since this is so, the big question then is this;
“What must a business do to satisfy customers?”
By creating unique and useful products/services that meet their needs and solves their problems.
In other words, for your guaranteed success in business, you must have a purpose that is completely focused on satisfying the customers by creating unique and useful products or services that meet their needs and solves their problems.
To find this purpose [reason for being] you must begin to think less about yourself, your needs and your problems and more about the customers. When they are satisfied, you are satisfied. Why? Because successful businesses exist for customer’s sake and not for the owner’s sake!
2. PEOPLE
Having a reason for being [purpose] is only the beginning of building a successful business. A successful business begins with a compelling purpose that surpasses the effort of any one person, hence the need to recruit the help of others.
People are your greatest asset in business; they are the means through which purpose is achieved. Without people, your business no matter how big its purpose, is only a dream. It takes people to fulfill purpose.
However, you need purpose to be able to attract to the right people to work in your business. Successful businesses pay keen attention to the selection process of employees in order to shift out the wrong people from working in their company. One way of doing this is by examining if their values align with the purpose of the business.
Here are 6 characteristics of the right kind of people to put into key seats in your organization. This was extracted from management guru, Jim Collins’ latest book “How the Mighty fall” –a must read for every CEO!
6 characteristics of the ‘right kind of people’ to work with in business
1) THE RIGHT PEOPLE FIT WITH THE COMPANY’S CORE VALUES: great companies build cult-like cultures, where those who do not share the institution’s values find themselves surrounded by antibodies and ejected like a virus. People often ask, “How do we get people to share our core values?” The answer: you don’t. You hire people who already have a predisposition to your core values, and hang on to them!
2) THE RIGHT PEOPLE DON’T NEED TO BE TIGHTLY MANAGED: the moment you feel the need to tightly manage someone, you might have made a hiring mistake. If you have the right people, you don’t need to spend a lot of time “motivating” or “managing” them. They’ll be productively neurotic, self-motivated and self-disciplined, compulsively driven to do the best they can because it’s simply part of their DNA.
3) THE RIGHT PEOPLE UNDERSTAND THAT THEY DO NOT HAVE “JOBS”; THEY HAVE RESPONSIBILITIES: they grasp the difference between their task list and their true responsibilities. The right people can complete the statement, “I am the one person ultimately responsible for ….”
4) THE RIGHT PEOPLE FULFILL THEIR COMMITMENTS: in a culture of discipline, people view commitments as sacred – they do what they say, without complaint. Equally, this means that they take great care in saying what they will do, careful never to over commit or to promise what they cannot deliver.
5) THE RIGHT PEOPLE ARE PASSIONATE ABOUT THE COMPANY AND ITS WORK: nothing great happens without passion, and the right people display remarkable intensity.
6) THE RIGHT PEOPLE DISPLAY “WINDOW AND MIRROR” MATURITY: when things go well, the right people point out the window, giving credit to factors other than themselves; they shine the light on other people who contributed to the success and take little credit themselves. Yet when things go awry, they do not blame circumstances or other people for setbacks and failures; they point in the mirror and say, “I’m responsible.”
3. PROCESS
The fusion of purpose and people creates the perfect environment and motivation needed for business success. However, this is not enough.
The perfect environment plus motivation have to be harnessed by creating operational processes in the business.
What are operational processes?
In simple terms, they are how activities, tasks or work is being done in a particular business. In other words, they are systems through which work is executed; a specific way of doing things.
Creating a process of executing work helps to properly align the activities of a company with the central purpose of the business.
Without a structured way of doing things the central purpose of the business may be compromised as people go about their respective duties.
To ensure the purpose is achieved, the activities of people must be organized by creating processes through which work is done.
Examples of operational processes in a business are;
- Human Resources [HR] – a specific way of finding, hiring, training, retaining and firing workers
- Finance – a specific way of sourcing, allocating and managing funds
- Production– a specific way of converting resources into finished goods and service
Purpose + People = PROCESS
4. PRODUCT
The purpose of a business can only be fulfilled through the creation of a product or in some cases services that are offered to the customers in order to satisfy them [meet their needs and solve their problems].
The creation of a product is the final outcome of aligning people with purpose and structuring or organizing work with processes.
Without a product, a business is just expending efforts and money and will never be able to fulfill the purpose for which it exists.
Customers don’t buy purpose, people or processes, they buy product/services.
When creating a product /services for your business, the key thing to bear in mind all the time is this; uniqueness and usefulness. Meaning, make your products/services as unique as possible and useful enough to your customers.
Don’t always copy other people’s products/services; always be on the lookout for creative ways to originate yours. And even if you do copy, always find creative ways to differentiate yours.
Purpose + People + Process = PRODUCT
5. PROFIT
The creation of a compelling purpose, the selection of the right people, the establishment of operational processes to organize activities and the invention of products are all efforts expended in a business.
All of these are considered expenses and there’s only one income –profit.
Profit is the reward gotten for fulfilling purpose.
Profit is the result of all your efforts is business.
Profit is what you get after giving so much value.
Profit is not an input you create; profit is an output you get after putting in so much effort.
Profit is the last pillar of business that guarantees success because it is what empowers your business to fulfill more purpose.
The essential thing to bear in mind when it comes to profit is this; never expect profit until you’ve ensured the above four essential pillars have first been created.
Purpose + People + Process + Product = PROFIT
In Conclusion
The almighty formula for business success is given below;
BUSINESS SUCCESS = Purpose + People + Process + Product + Profit
Over To You
How have you been putting to use each of these 5 essential pillars of business to use in your company?
Besides these 5 essential pillars of business, what other ones are you currently applying in your own business?
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Great post Tito!
From my interaction with small business owners especially in Nigeria, I can say that the greatest challenge for most is; inability to set up the (point 3) Processes (systems) for their businesses – that’s why before now a great entrepreneur passes on, the business closes down.
Thanks for the insightful write up!
Thanks bro for stopping by and dropping that vital point about business in Nigeria. I do agree with your viewpoint, it’s really saddening to see that our businesses in naija focus more on the money and don’t spend as much time on ensuring business continuity.
Processes are the pillars that makes profitability continuous.
There are three pillars which resonate with our team at Analytika – People, Process, and Intellectual Property (IP), although I believe as a result we focus on the five you had identified, even if they are not explicitly stated. These three pillars were originally stated by Mark Suster at his blog Both Sides Of The Table, about how to build your business to be scalable and investable.
1. People – Similar to the rationale stated in your article. World class talent is crucial to the success of a business, the right people will differentiate between a dream and reality. The wrong people may turn it into a nightmare.
2. Process – Agree with everything you have here which aligns to our implementation. One thing worth noting here – There is a delicate balance to be achieved with process. Too little and a business will not be scalable without direct owner involvement in operations, too much and a certain “dimming” of consciousness will occur in the organization. Refer to Arthur Koestler’s “The Ghost In The Machine”, in particular his discussion on mechanical vs. mindful behavior – I had also written a summary of this topic at Analytika: http://analytikainc.com/blog/2011/04/08/habit-vs-awareness/. Process does have a cost.
3. IP – As a business which engages in the building of consumer products businesses we have found IP to be of critical importance. Even if you do not believe in the whole idea of patents and trademarks, we have found that going through the process will result in a more relevant and differentiated product.
Product development is central to what we do, so I believe we hit that one by default and profit should be a natural result if all the others are in place. Our purpose is stated within our Noble Cause, a concept discussed within Tribal Leadership.
Interesting that you should mention “How The Mighty Fall”. This past weekend I was looking over my reading list and that was one of the books that had made it to the list but I hadn’t read yet (too many books, too little time). I was wondering if it was still relevant. Based on your article, it seems that I should leave it on the list and read it sooner rather than later.
Here comes another awesome contribution from the insightful John!
I learnt about the value of intellectual Property [IP] from Robert Kiyosaki when he lost his velcro wallet business to imitation from competitions.
Since I have been paying close attention to it and even read the book on IP from “Protecting your number asset” and I am working on using trademarks and copyrights as i am majorly a service provider.
Although its not something you can do without the help of a lawyer, and IP lawyers aren’t so much in my country -Nigeria.
Still not clear on some issues though…
Thanks for your awesome feedbacks, they are priceless!
I forgot about the Kiyosaki wallet story, I am a big fan of his work, especially the cashflow quadrant. Concerning IP, and specifically the situation in Nigeria, I completely understand. I am actually assisting a Nigerian in this area, but in the consumer product space, as opposed to a service. Contact me offline if I can ever be of assistance in the IP arena.
Will definitely do that John, got loads of questions to ask!
Thanks for the thoughtfulness, i appreciate it a lot.
Oh I almost forgot …
About the book “How the mighty fall” it’s no brainer …go grab your copy NOW!
It is such an awesome read, so different from the norm of following what made businesses successful.
This is more like a chronicle of failure. In it I learnt Success as well as failure can kill any business.
I strongly recommend it. I had to read it twice last year. Planning on reading it again this year.
I will definitely check it out once I finish the Richard Branson books. It is said that entrepreneurs learn more from failure than success, and I would agree. Thanks for the recommendation.
Read this over the past week per your recommendation. Excellent read, I can see why you are re-reading this one. One of the most amazing aspects is that many of the companies that were unhealthy, appeared perfectly fine, at least by regular business metrics. The flywheel concept also resonated, keep turning the flywheel until you hit that breakthrough moment!
Oh great to hear that John,
Not knowing that your business is on the brink of dieing even though looking healthy on the outside was one of the lessons I learnt from the read.
A second thing I learnt was that both innovating and not innovating are both capable of bringing a business down.
The flywheel principle is the true definition of what being an entrepreneur is, you’ve got to keep keeping on till the tipping point!
For me, Purpose and People have been biggest hindrance! I have had trouble finding the right purpose in the past. And when I did, I often lacked the right people to execute it.
Anyway, I have just got back online from a long break and hope this time, I can work through your awesome formula!
WOW Ishan!
So nice to have you back online…missed your presence greatly. How have you been? can be such a hard combination studying and business. I know what you go through, keep the fire aglow bro and thanks for showing up here as soon as you came back.
Welcome, can’t wait to read your next big post!
Well, had it been only studies, it would not have been hard. I had several big problems! First, a bad internet connection, then my grandma passed and just recently, a breakup in strange conditions! Let’s have a conversation some day.
WOW Ishan,
you’ve definitely been through some tough time, but i’m glad you are still keeping your head up. Sorry about the passing on of your grandma, may her soul rest in peace.
I will hook up with you via mail soon, so we can talk better.
Hey Tito!
Excuse my absent over the last couple of weeks man. Trust me, I’ve been reading the content – just haven’t made it by to comment.
The 5 Pillars you covered here are absolutely golden. All 5 of pillars carry considerable weight. But the first two are the most important of the bunch. Purpose and people first because those two are what carry forward the rest.
Great stuff Tito. I hope life is treating you well on the motherland.
PEACE
Hey JK!
I can tell you are busy considering that you missed a post last week on your blog. Hope everything is great with work and the family?
Thanks for dropping in to leave a brother some encouragement!
Yes, it’s been pretty dang busy man. But in a good way. So I surely can’t complain. How’s school and life? We need to catch up soon.
I’ll be in touch. PEACE
School is nearing the end, working on my final thesis and life couldn’t have been better!
See you are on g+ too, would definitely be a great spot for us to hook up!
Knowing your purpose for establishing your business is essential to success. Once you know, develop, and commit to your purpose, you develop a resiliency that is unparallel. Thank you for sharing.
Thank you Tia for taking the pain to view this post and sharing your feedback with members of the community. Indeed, purpose is what ignites our passion to survive the hurdles of business no matter how many times we get knocked down on the journey.
Hope to see more of you around!
Thanks, this is very useful and valid.
It’s in a much needed time.
God bless you for this.
Best always.
Arena.
Thank you Funmmy,
I am glad you found the article useful. I hope applying it helps you move your business forward!