While attending a competitive strategy course at Purdue MBA, I started to write down my thought about how several successful companies are built through the several years. It seems very clear that they have several common aspects, and they look rather simple, not complex. (Note: This is an initial idea of 4Ps of Successful Company).
4PS of Successful Company
1) People — Creating a strong organization begins with hiring the right people with the right skills, attitude, and purpose. HR aspect is involved in this — Interviews, Cold Calling, Review of Candidate Skills (Testing, Probing Questions, Behavioral Interviews, LinkedIn Search, Checking References).
Recruiting the right people makes all the difference in the organization because people decide the future of the company — They create processes, products, strategies, and sales. Additionally, great people bring in like-minded people, and investment opportunities from believing in their vision and goals, along with encouragement and grit to withstand in the low time of non-flourishing business moments.
People with the open-minded characteristics, likable personality, calculated risk management, emotional stability, grit (willingness to continuously evolve), and ability to learn new skills/ideas are often identified as emerging leaders. (Source: 15 Ways to Identify a Bad Leader)
2) Processes — Every business tries to identify the profitable business process that creates both value and potential long-term growth. Initially, many businesses fail to capture the business model since they are still experimenting, testing, and pivoting based on their customer reviews and feedback (through performing primary research using 1-on-1 interviews, surveys, focus groups, and 2nd Research Data from industry database). This aspect focuses on operation efficiency and efficient project management with the rapidly changing business environment.
For example, Google implemented the small group projects, allowing their employees into several teams, instead of a large hierarchical order. Focusing on this process, Google allowed each team to organically operate. This process was also mentioned in Frederic Laloux’s Reinventing Organizations, an award-winning organization history book and mentions about “Teal Organization”, where the organic structure of the horizontal process, continuous evolution, and non-rigid process help fuel relatively fast responsiveness to market change. It is implemented in several successful organizations in Europe, and the USA, including Morning Star Corporation (the world’s leading tomato process manufacturer with $700M revenue with a horizontal business structure — everyone takes part in the job and have growth-minded focus. The most interesting part is they have only 400 employees. It is a very highly streamlined, strong process, people-focused and efficient organization).
3) Products — Building the right process helps implement the products more rapidly, but also gives ample opportunities to test an early version of your product. With the right people and right processes in place, the company can focus on building products that try to meet the unmet need of target customers and profitable segment of an industry. This stage involves heavy marketing research, product development, and project management. You use 4Ps of Marketing (Price, Place, Promotion, Product), along with SWOT analysis (Strength, Weakness, Opportunity, and Threat) of your company against the industry and competition, and VRIN Analysis (Valuable, Rare, Inimitable, Non-substitute) of your existing resources.
4) Profitability — Once you have the products out in the market, you have to focus on developing profits through sales, and controlling cost. You aim at creating profitability through cost control, increasing WTP (Willingness to Pay). WTP relies on the effective marketing — creating substantial interest from the target audience, gaining the attention on your content, and engaging them to like, share and even sign-up for newsletters, converting them into a paid users, and retaining them by satisfying their post-purchases. (Interest, Attention, Engagement, Conversion, and Retaining of your customers). You can employ also a financial analyst to identify which aspect of your business is not efficiently creating profits, and reduce cost. Most often, the fastest way a large company creates profit is through cutting jobs (layoffs), removing debts, and focusing on the core competency.
Most often, many companies focus on finance, but the most profitable companies focus to try to identify People, Process, and Product correct in their initial stage. Profitability comes after having superior quality, services, and high WTP from your customers, along with earning their customer trust through long series of usage trials and brand recognition from the industry.
Despite what is written seems very logical, achieving all of above combination is extremely hard. Along the way, you will hit several hurdles from hiring, financing, internal office politics, product development, and sales/marketing.
Additionally, you have to worry about overall economic, social, and political factors affecting your business workforce, culture and outlook.
Running a business is not easy.
Thank you for reading this article.