Choosing a first-rate team key to company's success

Why do companies with similar products in the same industry and market differ widely in their operating results? What determines why one company continually struggles while the competitor seems to hit a home run every time they come up to the plate?

Many business gurus will tell you that it is the people in the firm and their ability to execute that makes the difference. In a Deseret Morning News column titled "Execution is vital for small business," published on April 17, I suggested that there are four elements required to successfully execute a company strategy: the team, the marketing plan, the operating plan and the financing of the business. Of the four elements, the team is the most important.

Through the years I have had the opportunity to observe hundreds of business-plan presentations. The majority of those presentations focused on the product and/or the market more than the team that would execute the plan. And yet, without a quality team, the likelihood that the plan will be successfully implemented is diminished.

In "Execution: The Discipline of Getting Things Done," Larry Bossidy writes: "Execution is a systematic process of rigorously discussing how and what, questioning, tenaciously following through and ensuring accountability. It includes making assumptions about the business environment, assessing the organization's capabilities, linking strategy to operations and the people who are going to implement the strategy, synchronizing those people and their various disciplines and linking rewards to outcomes.

"It also includes mechanisms for changing assumptions as the environment changes and upgrading the company's capabilities to meet the challenges of an ambitious strategy," Bossidy continued. "In its most fundamental sense, execution is a systematic way of exposing reality and acting on it."

If you summarize his definition of execution, you find that it is all about managers who are good at rigorously discussing and questioning, making and changing assumptions, assessing capabilities, matching strategy to people and creating ways to reward those people.

The team that guided Salt Lake City through the 2002 Olympic Winter Games is an example of a group that knew how to execute and how to do it well. Mitt Romney summed up the team this way: "More than just the talent, I found a core group that would go through walls if guided in a shared vision." And in the end they went through many walls on their way to a successful Olympics and a $56 million surplus.

This past winter I counseled with an entrepreneur who had struggled through his first year in business with little success, leaving him with the burden of debt on an unpaid loan. Much of his focus had been on product and systems. We talked about his business model and concluded that the company's success was almost totally dependent upon his team, not his product or the location of his sales force.

He focused for the next several months on recruiting and finding talented people. His product did not change from last year, but 2005 has been a great year for him and his company. Sales are up dramatically, the debt has been repaid, cash flow is positive and management is already investing in the 2006 plan.

In the book "Good to Great," Jim Collins talks about getting the right people on the bus (your company) and the wrong people off the bus. His conclusion: you cannot be a great company with the wrong people.

Ask yourself this question: "If the difference between you and the competition is all about execution, why do you spend so little time on your people?" As a business owner, you should never delegate the responsibility for having the right people in the right place to someone else in the organization.

Gary Williams is affiliated with the BYU Center for Entrepreneurship. He can be reached via e-mail at [email protected].

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