We all know a great business when we see one, whether it’s a thriving neighborhood restaurant or a life-changing new app. We also know when we encounter a mediocre business – it’s the company you interact with once and never return to.
But what are the great businesses doing that the not-so-great ones aren’t? Aside from making more money and satisfying their customers, what are the habits that successful business leaders adopt to make them better than the competition?
This article will shed light on the small business habits that make a surprisingly big difference. From company vision to staff engagement and customer retention, you’ll discover the routine practices and behavior patterns that separate the world’s highest-performing companies from the rest. What’s more, you’ll learn how you can apply these habits to your own business – with immediate results.
High-performing companies paint a compelling picture of the future.
What’s your vision for your business’s future? Many leaders think of their long-term vision like a compass: a grand ambition that points their employees in the right direction. But high-performing business leaders know that a well-crafted vision isn’t a compass – it’s a magnet. It’s the thing that inspires you to go to work on a Monday morning.
A powerful organizational vision not only points the way – it also energizes your employees and pulls them toward the future. Rather than plodding along in the direction of your company’s long-term objective, your staff will feel drawn to it. Providing this magnetic vision is crucial. Research shows that the biggest indicator of a company’s performance is whether or not its employees are inspired by their leaders’ organizational vision.
The key message here is: High-performing companies paint a compelling picture of the future.
Inspiration is a vital tool in your leadership arsenal, as modern employees look for meaning and purpose in their work. For today’s workers, making money for their employers is not a powerful enough incentive to drive high performance.
So how do you motivate your employees to reach for your company’s future? You can start by making your vision of the future specific and achievable.
Consider an organization whose vision might be to “eliminate world poverty.” Although this sounds inspirational, in practice, it’s anything but. In reality, it would be impossible for this one company to achieve the goal alone. How can employees feel motivated by a vision they know they cannot achieve? A better vision would be something like “to become the city’s biggest charity for homeless people.” This is still a demanding goal that challenges your employees, but it’s also a goal that is specific to your company and should, hopefully, be achievable.
Leaders in high-performing businesses also realize that the company’s vision should be shared by everyone else in the organization.
Many CEOs construct the vision by themselves and then simply announce it to their staff. But you’ll better inspire your employees if you collaborate with people at all levels to craft the vision. You can gain employee input by holding focus groups and conducting staff surveys. It can take time to properly engage with your employees, but you will move more swiftly toward your long-term objective if it’s shared by everyone.
Your organization needs to have a crystal clear strategy.
Some teams know better than others what they need to do to win. A soccer team knows, at least in theory, what actions they need to perform in order to win their next match. They need to pass the ball, defend against the attacking team, and score goals. But in the business world, some teams are unsure of what they need to do to succeed. Why? Because they don’t have a strategy.
It’s useful to think of your company strategy as a pair of goalposts. These goalposts show your employees in which direction they need to aim to reach their target and beat the opposition. High-performance businesses give their employees clear strategic goals.
The key message here is: Your organization needs to have a crystal clear strategy.
Goals are tangible actions that need to be executed in a particular time frame. Setting strategic goals ensures that employees stay focused and work with a sense of urgency. We can see how important strategy is when we consider that less than a third of employees in low-performing businesses say they clearly understand what their company’s strategy is. Over two-thirds of employees in high-performing organizations know exactly what their company is trying to achieve.
Although it might sound impossible, it's a good idea to ensure that your entire business strategy for the next few years can be written on a single sheet of paper.
Many companies have strategies that fill hundreds of pages. This is a problem because most employees won’t be able to take all of this information in. And without absorbing all that, how could they possibly know what the strategy is? Keeping your strategic goals and priorities to one simple sheet of paper ensures that everyone can memorize them and keep the aims in mind as they go forward.
To keep your staff abreast of the latest strategy updates, your business needs to have a solid internal communications department. But worryingly, a lot of companies don’t.
Although businesses are happy to spend big sums of money on communicating with their customers, many won’t invest in effective communication with their own employees. High-performing businesses don’t make this mistake. They know that when it comes to communication, staff should be a priority. So don’t be afraid to spend money on your internal communications infrastructure to ensure that all of your employees are on the same page and pulling toward the same strategic goals.
Most businesses fail to harness their employees’ true potential.
It's common knowledge that you need good people in your organization, but most companies take this to mean that they need to recruit good people. Once they’ve hired talented staff, many businesses assume they've done everything they can to build a strong team. But high-performing businesses understand that developing human capital involves so much more than just recruitment. So how do you build a great workforce?
As well as recruiting the best people, you also need to develop your new hires once they’re on board. This development could take the form of external training programs or temporarily posting people to other parts of the business so that they can learn more about the organization.
But although these activities are easy to implement, many companies avoid upskilling their employees. Why? Because they think it's too much of a risk. After all, what happens if they invest time and resources in developing someone, and then that person decides to leave the company?
The key message here is: Most businesses fail to harness their employees’ true potential.
Instead of increasing what their existing employees are capable of, most businesses prefer to recruit new employees who already have the skills and experiences required.
But high-performing companies don’t go down this route. Instead of worrying about the consequences of investing in an employee who then leaves, high-performing companies worry about what will happen if they don’t develop someone who chooses to stay. What’s more, instead of allowing line managers to carry on recruiting new people into their team, some high-performance companies will often dismiss managers for failing to ensure that their existing team is skilled enough to meet the business’s challenges.
So how do you unlock the true potential of everyone who works for you?
Perhaps the first place you should be looking is your leadership team. Oftentimes, if organizations do decide to invest in staff development, they put that investment into developing their employees’ technical competencies. But what many people are missing isn’t technical know-how but leadership skills - the competencies surrounding communication, integrity, and management style.
You can set a good example to others in your organization by undertaking training and development programs yourself. This will encourage other leaders to refresh their own skill set and set a new tone for the whole organization. If managers can see that senior leaders embrace personal development and upskilling, they are more likely to provide training opportunities for their own teams rather than recruiting from outside the organization.
High-performing businesses celebrate their workforce.
You might remember the wonderful feeling of winning a prize at school and proudly bringing it home to show your parents. While you might consider the office and the playground to be a million miles away from each other, it turns out that there’s a lot that business leaders could learn from kindergarten teachers.
A big lesson leaders should learn is that, however old you are, it feels great for someone in authority to tell you you’ve done well or give you some form of recognition.
Many businesses are focused on ensuring their staff meet challenging goals, but when those goals are met, they forget to give their employees a well-earned thank you and pat on the back.
The key message here is: High-performing businesses celebrate their workforce.
Research shows that over 50 percent of employees in high-performing organizations say that their leaders make an effort to recognize their achievements. But in low-performing businesses, only 25 percent of employees agree, and worse, a third say their managers never give them praise and recognition.
Showing your gratitude isn’t just the right thing to do; it’s also a valuable tool for getting the best out of your team. It is a fact that employees who feel appreciated are more likely to go beyond what’s expected of them and put in more effort to reach the company’s goals.
So how can you make a habit of recognizing your staff?
The good news is that it doesn’t have to be expensive or time-consuming. Sometimes, all it takes is putting your head around the door of someone’s office and saying thank you. In fact, research shows that this kind of spontaneous gratitude is more effective than planned praise. And don’t be shy about letting other people see you do it! While you should never criticize an employee in public, praise is best with an audience.
And be bold when it comes to showing your gratitude. One company decided to send their hard-working chief financial officer and his wife on a spa weekend, just to say thank you for his efforts. The result? Years later, this act of kindness was still being mentioned and appreciated among staff.
High-performing organizations look after their employees.
How much do you care about the people who work for you? As a leader, you might not have spent much time thinking about this question, but your employees probably have. And they likely have a more accurate idea of the answer.
When everything is going smoothly, it's easy to say that you care about your employees. But when your relationship with your staff is under pressure, the truth usually comes out. This is when the employers who aren’t concerned with their staff’s well-being show their true colors – often with disastrous consequences.
The key message here is: High-performing organizations look after their employees.
Consider this real-life example of two companies, both of whom had an employee who was injured in the workplace and needed to take time off to recuperate. The first company made sure they routinely checked in with their injured employee to see how they were feeling and ask if there was anything they could do for them. This company’s employee was back in the office two weeks later.
The second company handled things very differently. They made no effort to reach out to their sick employee while he was off work. Out of sight, out of mind. And the result? That company never saw that employee again. And not only did they not return to work, but they also hit their former employer with a lawsuit for the injuries they sustained in the workplace. This just goes to show that small gestures of care and concern can make a big difference.
All too often, organizations don’t think they have an obligation to care about their employees’ well-being. And who can blame them? After all, it doesn’t say anything in the typical employment contract about having to show compassion for those who work for you.
But most employees believe that their companies do have obligations toward them. This belief is known as the psychological contract. It is a set of unwritten expectations on the part of the employee, concerning all the rights and rewards, on top of their salary, that they can reasonably expect from their employer in return for their labor.
Some high-performing companies are now making the unwritten written and turning the psychological contract into a real document that employees sign when they begin working for the business. These contracts specify everything that the worker can expect from their company in return for their hard work. Now that you’re aware of these expectations, have a think about what your own psychological contract with your employees might include.
Your core customers will also be your loyal customers.
Many businesses believe that being customer-centric means building an expensive website or implementing a slick sales process, but the highest-performing businesses know that being truly customer-focused comes down to something entirely different. It means being able to answer one simple question: Who is my core customer?
This question is more complex than it might sound. If you’re going to have any chance of answering it accurately, you’ll need to ask yourself another question first. That is: What is it that makes my business different from my competitors’? Only by knowing this will you be able to recognize your core customer. Your core customer is the person who wants the very thing that your business provides and that your competition does not. Not only are these your most satisfied customers, but they’re also the ones who will come back to your company time and again.
The key message here is: Your core customers will also be your loyal customers.
The best companies know that customer loyalty is incredibly important. They understand that new customers are great, but that repeat customers are even better. Consider the fact that three-quarters of employees in high-performing companies report that their employer is very good at retaining customers, whereas just half of all employees in low-performing businesses say the same.
The reason customer loyalty is so valuable comes down to simple economics. Attracting new customers is often very expensive. Consider the fact that a typical company has already spent around half of the money that a new customer generates on attracting that customer in the first place. So if a new customer spends $100 with your business, your profit is likely only around $50, because you already had to spend the other $50 dollars on the sales and marketing that brought them to you. But these costs greatly diminish if that person keeps returning and becomes a loyal customer.
So for the sake of your profit margins, you need to develop a relationship with your customers rather than thinking of your interaction with them as a one-off transaction.
The highest-performing companies build relationships with their customers by asking them for feedback, implementing their product suggestions, and rewarding them for their loyalty. What’s more, these companies work hard to turn that loyal customer into an advocate for their business. An advocate is a customer who likes your business so much that they begin to recommend you to others in their social network.
Optimizing and refining your IT systems drives high performance.
Once your business has a functioning IT system, do you stick with that system religiously, or do you keep optimizing it? Most businesses have developed a way of using IT that works, but not many companies make a habit of improving their systems. Updating IT systems can be a challenge for older companies in particular.
That’s because older companies are often trapped with a legacy of old operating systems, which are too costly to replace. Many banks, for instance, are still using IT systems whose core essentials were developed over four decades ago!
The key message here is: Optimizing and refining your IT systems drives high performance.
Three-quarters of employees in high-performing businesses say their organization continually upgrades their IT systems, whereas just 41 percent of those in low-performing businesses say the same.
If you’re heading up an older business, upgrading your systems won’t be easy, but it’s often the only way to secure the future of your company.
Remember that your younger competitors, like start-ups, aren’t burdened with out-of-date IT systems. And if you’re not careful, this advantage could give them a decisive edge over your business. If it would cost too much to change all your business units to a new IT system all at once, then maybe build new units of your business on a new system, while leaving your old business units on old systems.
If you do decide to upgrade your IT system, it's important to invest in training for your employees so that they know how to use the new system effectively.
All too often, companies spend big on designing and installing a new IT system but try to save money by skimping on IT training for their staff. While skimping might sound tempting, consider that this approach is a false economy. After all, if your staff don't know how to use the new system to its full potential, then it won’t drive productivity in your business, and you’ll never see a return on your initial investment.
Finally, don’t forget to update your existing workflows, processes, and job descriptions to facilitate the new technology you’ve brought in. Even if your staff know how to use their new system perfectly, it will only work well if your other processes are adapted to be compatible with it.
The key message in this article:
High-performing businesses make a habit of constant self-improvement. They might be the best in their field, but they know that they could still be better. Whether they’re finding new ways to celebrate their employees or innovating new solutions to their technology challenges, the most successful businesses are always thinking about how they can maintain their competitive edge.
Unlock new learning opportunities with a mentoring scheme.
Staff in high-performance businesses know how to do their jobs well, but they still look for opportunities to learn more. You can satisfy this thirst for knowledge by setting up a mentoring program. This could take the form of senior managers mentoring more junior employees or, for your senior leaders, giving them the opportunity to be coached by someone outside the organization. Many mentors report that they get just as much out of these programs as the people they’re helping, so this is a great way to engage staff at all levels of your business.