Years of research has shown that most new businesses fail. Business owners could be doing many of the right things but they may be in the wrong order. Yet in contrast, many entrepreneurs have a track record of success – they win every time no matter the industry or circumstances. What’s the secret?
Everyone has their theories. I’m constantly looking for new insights that will boost our business and help us serve our guests better. I believe complacency and autopilot thinking are enemies of innovation. I keep learning and growing as a leader by keeping my ear to the ground. I’m an avid reader and business historian. When I am fortunate enough to speak to entrepreneurs, MBA students or college students looking for an edge, I always recommend three books that really speak to the business basics of success. I read all of the books years ago –they were game changers that helped shape my business philosophy.
Good to Great: Why Some Companies Make the Leap... and Others Don't by Jim Collins is my favorite business book. Collins delves in to the questions “Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?”
Using tough benchmarks, Collins and his team identified companies that made the leap to great results and sustained those results for at least fifteen years. After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies.
Collins debunks myths about success drivers and pinpoints a down-to-earth, pragmatic, committed-to-excellence process and framework that keeps great companies on track for the long haul. It is the triumph of the Flywheel Effect over the Doom Loop and the victory of steadfast discipline over the quick fix. There is no miracle moment. The good-to-great findings apply broadly—not just to CEOs and large companies but also to individuals. As long as we can choose the people we want to put on our own “Bus” each of us can create a pocket of greatness. We can take our own area of effort and concentrate on moving it from good to great.
Double Your Profits: In Six Months or Less by Bob Fifer. This book offers 78 very specific tips that will make just about any company profitable within months. So many business books are filled with fluff and urge readers to draw their own conclusions and action plans. This book is different. So different that even without much hype he was able to impress a few of the nation’s most respected CEOs. General Electric Chairman Jack Welch ordered copies for his top managers as a reminder that many of the cost-cutting, bureaucracy-busting, revenue-raising steps Fifer was proposing fit right in with the GE business model.
The book, which he calls “an exposé on how poorly run companies are in America,” preaches an ethic of profits first, nothing second. He suggests starting each day with three lists. The first is ways to cut costs or increase revenue. The second is what’s needed to maintain revenue. The third is things others want you to do but have no value to your company. “Never start on the second list until you have finished everything on the first list,” he says. “Throw away the third list.”
Nail It, Then Scale It by Nathan Furr and Paul Ahlstrom provides insight in to the key practices that enable business owners to pivot with agility as they fine tune their businesses. I think the title pretty well sums up the premise of the book. Get it right and then expand seems like it would be a no-brainer. But, sometimes it’s hard to see the forest from the trees.
“Pursuing a rapid experiment and finding out you were wrong and changing directions isn’t failure. That is the road to success,” says Furr. If you are starting a new business, even a franchised business, using resources wisely is key. Heading down a proven path allows entrepreneurs to adapt quickly and create a business or product customers actually want. Furr outlines the framework for actually testing ideas before wasting time and money. We use this model daily in deciding on adding new products to our menus or redesigning our dining rooms – it’s about starting with the end in mind.