All great businesses have three things in common. They have the right people, working together well, on the right problem.
For established or scaling firms, you’d hope that you’ve already found the right problem, i.e. that there is a market for what you’re trying to do. Finding the right people isn’t necessarily that hard either - even if you ascribe to the Pareto principle, the view that 20 per cent of employees provide 80 per cent of the value, that still leaves millions of talented workers theoretically available to you in the UK alone.
The thorniest challenge in business is rather to get those people working together in such a way that the whole is greater than the sum of its parts. The resultant high-performance teams will play a decisive role in determining which of today’s challengers will become tomorrow’s great corporations.
Unfortunately, high performance teams are also inherently unstable. Talented go-getters don’t generally stick around doing the same thing for long, and once your rising stars have become shooting stars, team dynamics change and the magic can disappear.
The future FTSE companies will be defined by their ability to prevent this.
You might think deep pockets would help - after all, the extravagantly-funded start-ups of Silicon Valley seem to do alright. But that’s less because money buys loyalty (it doesn't) than because growth itself is a labour market aphrodisiac, giving star employees progression and keeping them challenged, at least for a while.
On a deeper level, to sustain growth and excellence in both day-to-day operations and innovation - and to form great teams in the first place - you need something much more fundamental than big investors.
As with any endeavour that relies on people, you cannot succeed at the highest level without great leadership, great managers and great culture. These bring the best out of people and make them want to stay.
If there was an easy way to transform business cultures and raise the calibre of both leadership and management, there’d be little need for the multi-billion dollar consultancy industry. However, if you want to hold onto your superstars and find a high-growth trajectory, then there are some basic truths to observe.
Culture, management and leadership are not unrelated - they feed into each other. As a result, you cannot parachute great managers into a poor culture, or expect a great culture to emerge from bad managers.
What you can start to change is leadership. While a leader cannot simply set the culture, they have an unprecedented power to influence it. Everything they say - and far more importantly, do - is a signal. At the same time, they also have the authority to remove bad managers and hire good ones. The best leaders make improving the culture and quality of management the heart of what they do.
This is why the emphasis on technology as the determining factor in the next generation of great companies is misguided. It’s the basics - great people, in great teams, managed well, led well, pulling together - and not some algorithm that will ultimately determine success.
Management Today’s NextGen awards recognise the businesses with the potential to be tomorrow’s superstars. If you have a team, a leader, an individual performer or a work culture that deserves to be an award-winner, then find out how to enter now.
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