Accessibility Links

What is the secret to success for modern businesses?

Posted by: Max Crowhurst
28/02/2017

 

Businesses today are facing challenges that are immensely complex and cross disciplinary. The sudden impact of the financial crash of 2008 may have passed but it has left behind in its wake an uncertain and unprecedented future for businesses around the world. Couple this with an ever increasing presence of technology, government changes, competitive marketplaces, recruitment issues and changing consumer expectations, and businesses are left with constant uncertainty.

It would be fair to say that in the current market, many organisations are failing because they are reliant on misguided ideas about the factors behind business success in the modern age. They are waiting on a super entrepreneur to come and turn these challenges into successes. But these are multifaceted challenges that can’t be solved by a few super men or women, says thinker and business author, Margaret Heffernan.

Businesses of all sizes are reporting challenges with growing revenue, especially for companies with less than 100 employees. For these smaller companies, this stumbling block could be related to securing strong funding from lenders. Markets are becoming tighter and investors are seeking business models that can prove their worth. This could be the reason that small businesses typically have a bigger focus on profitability, and often struggle to increase profitability on an annual basis, sustain a viable cash flow and keep their head above water.

Marketplaces are exploding into all areas of life, from companies that pick up and deliver back your laundry to others that deliver alcohol to your door. These market places are delivering tough competition and fundamentally eroding the bottom line of larger companies. And amid the hundreds of options now available, consumers don’t know what to do with all the choice. There is no longer a set brand name consumers go to for particular items; the market place is rife with businesses fighting for consumer attention. As peoples lives get busier and more demanding, time becomes more limited and people expect a faster, cheaper and more fulfilling consumer experience instantly or they will drop the service in favour of another.

Heffernan argues that the most important success factor for modern businesses is creating a collective intelligence, rather than having one superstar. In this current climate we need a wide range of all kinds of people working together, full of curiosity about each other and willing to share their know how, says Heffernan. With the business landscape constantly and rapidly changing and evolving, diversity of thought is crucial to be successful. Thomas Malone, an MIT professor, found that social sensitivity is important to group performance and teams with higher empathy scores, were more effective than those with only high IQs or only high EQs. He also found that women tended to score higher on social sensitivity meaning that groups with a higher proportion of women performed better. Groups with the ability to encourage full participation from all team members who listened to each other, had open minds and shared criticism constructively were also more effective. A moderate level of cognitive diversity is also important in all instances.

So pinning all hopes on one “superstar” could be detrimental to a business. Impacted further by the fact that today’s top talent is increasingly choosing to start their own small business rather than working for someone else. With technological developments and changing expectations of the workforce, this will only continue to be an obstacle to businesses now and in the future. But research is showing us that those shining stars may not be a match for a collective shining star with many different ideas and approaches. Businesses should be investing in a group strategy, focused on smart people who are willing to share their know-how to work out these global, complex and inter-disciplinary issues together.

Add new comment
*
*
*