Sustainable, profitable businesses are run by good people. They recruit and retain the best in any given market place.
As one of the largest independent chartered accountancy practices across East Anglia, we are in a unique position to see different businesses in similar industries and note the wide variations in performance.
How come one engineering company makes consistently high profits whilst another in a similar market struggles and possibly goes out of business? Is it the reasons that come out of the liquidator's report such as adverse market conditions, foreign competition and pressure on margins? Well those may be the reasons given, but just maybe we had seen it coming for years and just maybe the reasons were apparent from the moment we walked through the factory door 5 years earlier.
Were they expecting you for your appointment? Were you greeted by someone with a smile? Did they know where to find the person you came to see? Were you offered a coffee? Was the person you came to see prepared for the meeting?
All straightforward stuff, but surely not the reason for corporate failure? But where is the logic that says that those who cannot deal effectively with these day-to-day routines can somehow deal effectively with changes in their market, increased foreign competition and falling margins? There is no such logic and there is an all too common parallel between the routine and the bigger picture.
The common link is, of course, good people. Highly skilled people at the top putting themselves in the best position to stand a chance of making the right decisions, and reacting when they occasionally get it wrong. They have really competent people to delegate tasks to with confidence; and support people to work effectively within an environment that is organised and motivational. Recruiting and retaining people isn't difficult. Recruiting and retaining good people goes to the very heart of the business culture.
When asked by a client what are the things he or she should concentrate on first to build the type of business that people will want to work for, I always suggest they start with everything they say and everything they do! Proprietors and Directors of a business set the benchmarks, by which others will follow.
Imagine that you are a key character in a new fly on the wall documentary. How would you look when viewing the rushes each evening? Head in hands, because you look too much like David Brent for comfort -- or are you seen setting the example, enjoying yourself and getting the job done?
We can talk forever about good communication and good organisation, but if those at the top don't display these attributes, how can they expect others to do so? The key task is to establish a good track record. We all get things wrong, but it is the context in which those errors are seen that dictates the reactions to them.
If you can be relied upon to complete tasks, then, when it doesn't happen, people are more likely be understanding. If you are rarely if ever late for a meeting, then we you are, people will accept that there was a good reason. If you are never sick, people will really be concerned when you are.
If those at the top display these qualities, the majority of others will also and you have the credibility to deal with those that don't. You have a team of people who want to work for you and get the best out of colleagues.
In addition to my role as Managing Partner, I head a Recruitment Consultancy division. There we believe we bring considerable expertise and care to the recruitment of competent people. How much easier it is, when we know that the client will display the right characteristics at second interview stage. Take the assignment for a group financial controller, where we found a terrific candidate (and that is not what some agencies call terrific - I mean genuinely a very good candidate). At second interview candidates were kept waiting, the client was not prepared, and the client then delayed making a decision on the offer. Although the job and skills match was spot on, the best candidate went elsewhere - he had lost confidence in the potential employer. That client has since gone out of business, not because they failed to get their financial controller, (although it didn't help), but because our keyhole view of the company through the assignment was symptomatic of their general capability.
None of this is easy - the rules of the game might be simple, but the practice is a relentless attention to detail. The dynamics of workplace relationships add complications. You display the right attributes to a line manager, who is then expected to do the same to colleagues. But what if those colleagues are pushing for promotion to that same line manager's role? An understanding of these relationships is very important. Having disciples and trusted colleagues throughout the organisation is key for you to understand the actions of others and, not least, gain an understanding of your own actions and how they are interpreted within the organisation.
Training, of course, plays a key part - for you and for everyone, but it is very difficult to change individual characteristics and you will sometimes have to work with the majority and limit the damage of the minority.
So I started by saying how obvious it all was. Of course, it must be a bit tricky, otherwise all businesses would be displaying the best people management skills. It's not one of the keys to success - it is the key to success.
If you can get it right and do your best to keep it right, then you really can be that difference between a sustainable, profitable business and the rest. It also means you can ride out the bad times and be ready and waiting to capture the market in an upturn.