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What drives a company’s success?

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Success Strategy Direction Development

It is interesting to observe different companies striving to reach their destinations. And above interest, this presents a great opportunity to assess other companies and their way of handling issues, thus benefiting from a chance to compare one’s company and strategies with another’s.Leaders’ approaches to strategy seem similar in the majority of cases; most of them focus on finding a direction, no matter what, without previously thinking through the process of going there. Many companies struggle with huge gaps that can only be filled if the whole team works on it, and if the leader is able to manage the process.

Once there’s a gap, the next step is to figure out what to do with it. The problem of the majority of companies is that they do not realize what they are missing, what they lack. Instead they focus simply on direction, on finding any kind of direction, just as long as it gets them out of the problem. But that only happens at a first glance; in the future, they may confront themselves with the same problem all over again, as they did not handle it properly in due time. Paul Leinwand and Cesare Mainardi argue in an article on Bloomberg that yes, it is commonly seen that leaders want to start at choosing a destination, “where” being their keyword in every possible instance. But this is not enough. Strategy mean much more than just deciding on which direction to take. It means making choices that have to do with one’ identity, purpose and capabilities. Cynthia Montgomery, Professor at Harvard University introduces a question in this respect that all leaders must answer in order to achieve their plans: What will his firm be and why will it matter?

It is important to decide what the purpose of a company is, before going to a particular direction. The direction highly depends on the company’s capabilities and identity. Once we decide that, the direction will be easy to follow. Focusing on what the company is the best at is what drives it on the road of success. Many leaders choose one solution that appears to solve everything, neglecting at the same time the need for filling specific gaps in the company.

In a study performed by Paul Leinwand and Cesare Mainardi, it is proven that the best way to improve one’s company performance is to look at other companies and see how they do it. Having access to different companies and different approaches to strategy may be incredibly useful for the development of a company. And that is due to the concept called comparative analysis which drives the companies competitive advantage, making them want to be better at what they do.

All is all, comparison is efficient in business management as it gives a great opportunity for self-analysis. Once you have established the qualities and flaws of your company, you can start making decisions regarding which way to turn and what strategy to adopt.

References:

Social media and its impact on your business
Business philosophy: Ten things we know to be true
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