Four Strategies to Create a Business Culture of Success

How can you develop a business culture that supports ongoing growth, even through the worst economic crises? That's what the National Center for the Middle Market (NCMM) set out to identify in its recent comprehensive study. It turns out that fewer than one percent of firms are what the NCMM terms "Sustained Growers" – those that grew even during the recession and then doubled sales post-recession. How did they do it?

NCMM began by evaluating a dataset of 128,000 middle market companies, which showed their economic performance before, during, and after the downturn. They supplemented their findings by surveying nearly 250 C-suite executives from middle market companies, and their findings provide a fascinating roadmap for how you can steer your company to success. Here are several key lessons to keep in mind.

1. Take responsibility. One of the biggest differences between Sustained Growers and their less successful counterparts was their ability to develop a business culture that emphasizes taking responsibility for results. While underperformers were more likely to blame "external factors that their hindered or buoyed performance," the Sustained Growers cited internal operations that they could manage and control.
2. Slow and steady wins the race. A subset of the firms studied struggled during the recession and then bounced back afterward; the study calls them "Breakout Growers." That's obviously far better than having stagnant or declining revenues, but the research showed that a business culture emphasizing singles is better than looking for one big home run: "The best predictor of a middle-market company's financial future is not how fast it grows, but how often it grows," the study noted. "Sustained Growers—those that expand incrementally in most years—are the most likely to survive and thrive."
3. Focus on talent. If your business is going to grow year after year, you need the right people leading it; HR mistakes can become costly over time. Sustained Growers placed a special emphasis on talent recruitment and retention as a cornerstone of their success. The study cited the example of Torani Syrups and Flavors, a middle market company based in San Francisco, which recruited its first non-family CEO in 1991 (after almost 70 years in business) in order "to avoid the inter-generational stumbling blocks common among family businesses." This strategic move paid off when, just over a decade later, the new CEO and leadership team "sensed a maturing café market," leading them to launch a company-wide vision and long-range planning process. They focused on driving innovation and intensively coaching top staff to help them succeed – and that emphasis has paid off.
4. Execution makes the difference. There's plenty of commonality between how the Sustained Growers and their less successful peers think about business. They're all interested in retaining top talent, watching the financial health of the firm, integrating better with key partners, and the like. But there's a wide gulf between thinking about something and doing it. Sustained Growers are laser-focused on execution, and that pays off in concrete results.

Learning from best practices is always a helpful exercise. Less than one percent of all middle market companies can grow every year, regardless of external economic circumstances.

What lessons from the Sustained Growers will you apply?

Dorie Clark is a NCMM contributor, marketing strategist and professional speaker who teaches at Duke University's Fuqua School of Business. Learn more about her new book Reinventing You: Define Your Brand, Imagine Your Future (Harvard Business Review Press) and follow her on Twitter.