Every business owner spends time thinking about how to create (and/or sustain) a competitive advantage. Home builders jockey for the best properties in growing areas, energy companies seek undervalued sources of natural resources, and manufacturing companies look for low cost labor and new automation. Financial companies seek new data-driven algorithms to predict future trends. Pharmaceutical companies seek patents on scientific breakthroughs. Technology companies seek innovative applications that empower a new wave of adoption.
However, in spite of all these smart, advantage-producing moves, the long-term key to success in virtually any organization is people.
It's people who perform the analysis and take the action that achieve competitive advantage in the first place. It's also people who execute strategy and policies, and who deliver real value to customers. Without the right people onboard to do these things, you can neither achieve or sustain an advantage for very long.
Most academics - a group notorious for arguing publicly and vehemently about such important topics as whether Pluto is really a planet - agree that the purpose of a business is to create and satisfy customers. In the end, it's always people who identify ways of adding value, design methods for doing so, and actually execute those methods, either directly or behind the scenes. In other words, it is people who create and satisfy customers. Everything else is just a tool for them to use.
So, how do you win through people? The formula is simple:
- Hire effectively.
- Develop, empower, and support honestly and consistently.
- Remove nonperformers immediately.
- Reward generously.
Not exactly rocket science, is it? But as we review our strategic plans, it never hurts to be reminded about what makes the money come in.
