So you’ve got a killer strategy that’s ready for customers, competitors, and possible disruptive technology. And you’ve created and are executing to a plan that harnesses big data for logistics, supply chain, and distribution.
Success is inevitable, right? Wrong. You’ll be a flash in the proverbial pan if you neglect five essential, nonanalytic, humanistic factors, according to Rich Karlgaard in his new book The Soft Edge: Where Great Companies Find Lasting Success.
On the basis of his study of dozens of highly successful companies, Karlgaard draws the parallel between personal health and corporate health by showing both as equilateral triangles. Here’s the one for personal health:
“That triangle is intuitive. To be truly healthy, you must not only take care of your body and mind but also have a social connection. The lack of that connection is deadly; prisoners in solitary confinement, for instance, often go crazy and try to kill themselves.”
According to Karlgaard, companies have a “health pyramid”, too:
Your strategy (market, customer, etc.) is the foundation while the hard edge (supply chain, distribution, etc.) supplies the tactics by which you execute that strategy.”
However–and this is essential–without the third side of the triangle, the human side, even the best strategies and tactics fall flat. Here’s what you need for long-lasting success:
Trust comes in two varieties: external (whether your customers, partners, and investors trust you) and internal (whether your employees trust you and one another).
Without trust, every activity has to pay a “mistrust tax.” Suddenly, lawyers are everywhere, gumming things up. Employees spend more time covering their butts than doing their jobs.
The source of trust, internal and external, doesn’t lie in your corporate ethics statement or your brand promise. It lies in consistency. People trust bosses and co-workers who are who they say they are, even if they’re jerks.
For example, Steve Jobs was a jerk, but he never pretended to be anything else. Similarly, Jim Goodnight, CEO of SAS, is a famously nice guy creating an environment that regularly wins “best place to work” awards.
Despite diametrically opposite management styles, both CEOs built incredibly loyal, effective teams, because their employees knew exactly who they were dealing with. Neither company tolerates hypocrisy.
You already know that smart people are essential to a company’s success. However, there’s another element of smartness, which is creating an environment where smart people needn’t do dumb things in order to survive and thrive.
For example, in the early 1990s, I worked at DEC with some of the smartest people I’ve ever met. Despite that, though, they acted like idiots, expending vast sums of intelligence in playing pointless internal politics.
Take a look at the most successful companies and you’ll find that they give their smart people the opportunity to be smart. Managers in these firms listen–really listen–to what their smart employees have to say.
Whether in high tech, or in something as low tech as selling insurance, when you’ve got a culture that values people and their native smarts, you end up with better products, more customers, faster growth, and greater staying power.
Read more at Inc.