3 Things Great Companies Nail


by Tim Metzner

While companies are incredibly diverse and complicated, it occurs to me that the lasting successful ones all have (at least) three things in common. A clear and compelling vision, a great culture and exceptional (focused) execution.

To be clear, I don’t think it’s realistic to expect a company to perfectly sustain these at all times. This means that companies can be successful (for some time) without excelling at all. My thesis is that the more consistently a company excels in all of these areas, and avoids significant outages, the more likely it is to become a lasting company that will thrive over the long haul.

How Differential Stacks Up

Before I dive too deep into the content, wanted to share an application of it using Di as the example. Overall, we’re in a good spot right now. On a scale of 1-5 (5 is good), our average Score is a 4.3 across all three categories, with scores above 4 in all. This is great for the time being, but there is definitely room for improvement (we did get two 3’s) and this is never done–takes real work to sustain this over time. This means we need to continually measure and optimize.

So let’s get into what we’re measuring, how to do it, and what it means.

Vision

The company has a vision that is clear, focused, meaningful and well communicated to the team. Everyone from the CEO to the interns understand where the company is going and how that applies to what they need to accomplish this week, month and quarter.

Culture

The reality is your employees spend more time with your team than they do with their families. If they don’t genuinely believe the company is working on things that matter, feel equally challenged and appreciated, and love (at least most of) their co-workers, they simply won’t last. Simply getting a ping-pong table and having an occasional “beer Friday” won’t cut it (though can be a nice start), creating a great culture requires intentional and consistent focus, starting at the top.

Execution

It doesn’t matter how much people enjoy working at your company or how clearly you’ve articulated a vision; if they aren’t getting shit done, you lose. In most cases, if do have a great culture and clear vision, you’re likely also executing, but there is almost always room for improvement here. To be clear, this doesn’t mean everyone is working 60+ hours a week (though your team should be willing and able to when needed), but it does mean people are focused, efficient and hard-working.

Word of clarification and caution (which largely reiterates the importance of clear vision). There are real risks associated with execution that isn’t meaningful & focused; busy doesn’t equal good. You could execute really well on non-core/mission critical stuff (i.e. not contributing stuff that people are willing/able to pay for) and still have a sustainability problem. Similarly, you could execute well across lots of disjointed projects without ever going deep enough in any meaningful area to reach a tipping point that leads to sustainability.

Measuring It

So, how do you know how you’re doing? Ask your team! Ask folks at all levels in your company to rank how well you’re doing (on a scale of 1-5) in all of these areas. Take the average scores, record them, and optimize over time. This is exactly what I did with the Differential example above (with 10 responses–so pretty representative for a company our size).

Taking this a step further, I think it’s helpful to visualize what this actually means for the business. I believe measuring these three key areas can help show you where your company stands on two key indicators of success: growth and sustainability.

To do this, let’s map where a company would be on an X/Y graph, creating four quadrants tracking how you’re doing against sustainability and growth. In the Differential example (average 4.3) this would put us solidly in the upper right quadrant (THRIVE)–right where we want to be. It means we’re tracking for continued growth that we should be able to sustain (for now, at least).

image

THRIVE: Your company is growing (in a way that is sustainable) and your team is happy.

ALIVE: People are enjoying the work they do, and generally happy, but the company isn’t going anywhere. Stay in this spot too long and you’ll be out of money before you know it.

DRIVE: The company is probably growing but at a cost. Expect burnout or employee churn if not corrected.

DIVE: Your team isn’t happy and your company isn’t growing: right the ship quickly or start looking for a job.

What Does This Mean?

While this isn’t an exact science, I would probably define “high” in any category as having a score of 4 or higher (on a scale of 5).

High on Vision, Culture & Execution

Congrats! You are in the THRIVE quadrant. The business is growing, the team is happy and you’re in a position to maintain momentum. Do whatever you can to stay here.

High on Execution and Culture

If vision is lacking, but you’ve got a great culture and a team executing, you’ll just be spinning your wheels. You’re getting a lot done, which might feel good, but it may or may not be the right stuff. It’s like sitting in a rocking chair: it feels good, and you’re moving, but you’re not going anywhere. Chances are you somewhere close to the dead center on our chart above, with no prospects of moving up and to the right without change.

High on Vision and Culture

If you’re lacking execution, you’re dying (DIVE quadrant). If you stay in this state for any length of time, your company is bound to take a dive. A great vision and phenomenal culture won’t overcome a lack of getting shit done. The first place I would look if this is you: double back and really dig in to make sure you have a clear and compelling vision and a culture where execution is celebrated and rewarded (and people like what they’re doing and who they’re working with). I’m sure it happens, but I would expect it to be rare where a lack of execution doesn’t point to failing in either vision or culture (or both).

High on Vision and Execution

For driven people (looking at you entrepreneurs), having a great vision and high level of execution feels great. In fact, you probably won’t even feel like anything is wrong, in the short-term. If you’re not building a great culture, however, this won’t last. You’re likely in the DRIVE quadrant, which means it won’t be long before you either a) start losing great people due to burnout b) start to notice a drastic decrease in productivity (or both).

But wait, there’s more. Want to know how your team is doing? Try evaluating all of your employees individually. Work with your leadership team to answer the following questions about all of your employees (or even rank them on a scale of 1-5).

  1. Do they seem to understand, care about and contribute to the vision?
  2. Do others enjoy working with them and having them around?
  3. Are they executing? Do they consistently hit their goals?

Would welcome your thoughts, reactions or questions. How’s your company doing?

Special thanks to Sean McCosh, Ry Walker, Tim Brunk and my small group for the inspiration & for reviewing.

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