Three Secrets To Wealth And Success

A recent study by Howard Armitage, a professor at the University of Waterloo (in cooperation with the Society of Management Accountants of Canada and the Financial Research Foundation), had uncovered the three keys to corporate success in Canada.

The study has revealed that, contrary to popular belief, neither pricing, quality, distribution, operational capabilities, efficiency, technology, nor information systems are the important factors in successful businesses. Surveying executives at large Canadian companies has shown that the factors responsible for success are:

• Managerial leadership and vision
• Good customer service
• Skilled and motivated employees

Armitage learned that it is particularly important that a company’s performance meets or exceeds expectations. The ability to exceed expectations not only makes it easier for a firm to raise additional funds in the financial markets but also to attract and retain good employees. Wealth creation is not dependent upon one’s understanding of the marketplace or in finding a niche one can excel in filling.

Secret #1 – Management

It is not a matter of smart management, employee motivation, technological leadership or even intra-company communications. Armitage says that the principal components of managerial leadership and vision include:

• Clarity of purpose
• Ability to communicate the company’s purpose
• Encouragement of management diversity
• Leveraging core strengths
• Creation of a positive working environment
• Careful measurement of results

Secret #2 – Customer Service

Customer service is built upon management commitment, relationship development, training and measuring the results. This speaks to such things as working closely with customers, providing leadership and empowering employees to assist customers and accept responsibility when something goes wrong, and through surveys, monitoring things like customer retention rates, word of mouth referrals and average problem response time.

Secret #3 – Skilled Employees

This should be part of an organization’s culture, encompassing such things as management vision, teamwork, measuring results (performance appraisals) and rewarding performance. This means that in order to hire and retain good-quality employees, you must provide an environment like that described above, but also institute aggressive pre-employment testing as well as on-going evaluations based upon measurable results during annual performance reviews.

According to the study, the top performers listed Management leadership/vision as the most important factor, followed by customer service and employee skill set/motivation. The distinguishing difference between the top performers and their counterparts, however, was the fact that successful companies identified themselves as having a high level of satisfaction/achievement in each of these areas. They also linked non-financial measures to key factors including customer satisfaction, employee turnover rates and process improvement consistent with looking at an organization from a multi-stakeholder perspective.

What does this mean for your company?

If you do not have a focused, committed and visionary management team working in tangent with each other, you’re heading for an identity crisis sooner or later. Eventually you will be asking (or your customers will be asking) what are your core competencies, what are our short and long term goals and what are the keys to profitability. To combat this you must ensure that leadership flows from the top down and that all your managers are reading from the same page. Using three hundred and sixty degree testing is recommended and holding managers responsible for creating positive working relationships with their teams is necessary. The best way to find out where your company hot spots exist is to survey your workforce and ask them. They know better than you do what the problems are and in most cases will gladly provide the solutions too!

If your customers are not receiving high-quality and efficient customer service, then you’re doing your competition a favour. Studies have shown that every negative customer experience results in a loss of up to 100 potential customers who hear about it and never do business with you as a result. The only effective way to find out what your customers like and dislike about the services or products that you supply, is to ask them. Surveying has become easier, faster, cheaper and more effective than ever, thanks to the Internet. Once you know what your customers want, you can work on delivering it. Part of this may include testing the people you hire to ensure that they have the appropriate skills, aptitudes and attitudes to perform their jobs effectively.

Hiring skilled people in today’s economy is harder than ever. This is particularly true (and probably always will be) of knowledge workers such as IT personnel. However, this doesn’t mean that it’s impossible to hire quality. Due to the increasingly litigious nature of our society and the reluctance past employers have to provide references, many recruiters find it hard to obtain enough facts about a candidate to make informed decisions. Testing applicants can solve this problem for you. There has been a boom in testing industry and there are hundreds of instruments available that are legal, accurate, valid and reliable, which will tell you everything about the applicant that he or she won’t volunteer. If you aren’t testing your employees before you hire them, you can rest assured that you’re hiring some one else’s reject.

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