What the Best Run Companies Do: Apply the Basics

Submitted by: Leah Quesada, VP of Marketing, Enterprise Business Group

Companies that perform well are like great athletes. Like athletes, well-run companies have vital performance stats better than most. They have a healthy sustainable revenue stream, prudent spending, excellent profit margins and high shareholder return on investments. Behind all these numbers, there is something else these great companies do – something so basic, so simple, and so logical – one wonders why more companies do not follow suit?  The answer – they apply simple and basic principles of life.

What are the basic principles of life? Take a moment to identify the best aspects of your life. What matters to you? Each of us will most likely have different things to say, but there will be common threads. Imagine a group of people flourishing together using this same mindset or principles. These principles serve as the binding force that unleashes the productive potential in each of us. After all, aren’t companies simply made up of people – in this case, energized people?

In my series of blog entries, I will explore how basic principles of life fuel economic growth… and yes, personal and social growth, too. Today, let me give a few examples of these basic principles and how they have been applied to create great companies.

Three inter-related basic principles:

1. A higher cause or belief system inspires
2. The whole is greater than its parts
3. Interdependency – do to others what you want others to do to you.

Great companies inspire. They have a belief system that stands the test of time and technology evolution. They inspire not only their own employees to unleash their productive potential, but also encourage their customers to buy from them because they share that same belief. The classic example is Apple and their campaign Think Different.

A belief system could be an inspiration or it could be a north star. Take the case of IBM. IBM is an over 100 year old company that started with punch cards and now is one of the world’s leading IT companies with market capitalization over $200B. “From the beginning, IBM had a concept of itself as an institution, not just a technology company,” says Rosabeth Moss Kanter, author of “SuperCorp”, a book partially about IBM’s prowess. “IBM is not a technology company, but a company solving business problems using technology.”

The second and third principles are inter-related. The whole is greater than its parts and there is interdependency in these parts. Whole Foods is a company that practices what they call “conscious capitalism.” It recognizes a more expansive stakeholder ecosystem model: customers, employees, investors, suppliers plus larger communities and the environment. John Mackey, Whole Foods’ co-founder and co-CEO believes that he and his company can be successful only if the ecosystem around him is successful.  Whole Foods’ higher purpose is “to try to change and improve the world.”

Simple principles of how we live our best life, better yet our best collective lives, are what fuel the productive potential in each of us.  And isn’t it that each of us serves as an integral part of the foundation that supports our companies?  So, why are there so few great companies when the formulas for making them great are so simple?