Business success is...
Satisfying customers better than competitors
No customers, no business!
The 10 C’s of business success
Customers, corporate culture, commitment, competence and learning, competitors, creativity and innovation,
change, combination of opposites, cash and conscience - here they are!
1. Customers – amaze them!
Give customers the best possible value for money and exceed their expectations – how?
a) empathy and
See the business from the customers' point of view and find
solutions to their problems as quickly as possible.
b) customer driven 7 S’s
- structure (how things are organized).
- systems (how things are done).
The last four people related S’s (sometimes called the soft S’s) are the
most difficult for competitors to copy and so are particularly important.
c) cost leadership
Have the lowest costs and lowest prices (if your product is similar to competitors).
d) product differentiation
Selling something with a superior image and/or quality.
e) excel in the 4
- price - Henry Ford's Model T (pictured right)
was hugely successful because of its low price.
- product (including quality and brand image).
- promotion (including advertising).
f) market segmentation
Selling to a particular group of customers ( a market segment or niche) e.g. rich/poor,
See market segmentation.
2. Corporate culture (shared values and beliefs)
Every employee must passionately believe in and act upon certain values, particularly:
- striving for excellence in everything.
- getting the best performance from employees and treating them well.
See corporate culture for more detail.
3. Commitment (motivation and leadership)
Happy motivated employees mean happy customers. This link is called the service-profit chain.
How do you motivate people (i.e. make them work harder and more effectively)?
- give them the information they need.
- involve them in the decisions affecting their jobs.
- give them control over their jobs, so they take responsibility for
results (called empowerment).
- encourage them to continuously learn and improve – see point 4.
- make their jobs as interesting as possible
- pay them well and give them a share of the profits.
- great leadership – the boss must inspire employees to do great things for customers
See for more detail:
4. Competence and learning
A successful business is a learning organization.
i.e. it continually learns from its experience and mistakes with a continuously trained and educated
5. Competitors - beat them!
- keep them out e.g. patents (giving a monopoly for new products).
- have better and/or cheaper products – see point 1 above.
- exploit your core competencies (or
distinctive capabilities) - significantly superior skills and technologies.
6. Creativity and innovation
Creatively find new and better ways of satisfying customers (like the bagless vacuum
cleaner inventor, James Dyson, pictured
So innovation (the development of new products) and creativity (the creation of new ideas) are vital – see
creativity and innovation.
All employees must continually change and adapt effectively to external changes
(particularly rising expectations and different needs from customers).
So employees must constantly challenge themselves and the status quo.
8. Combination of opposites
The best businesses combine opposites that seem to contradict each other. Here are some
- quality product and low costs.
- leanness (with lowest possible staffing) and loyalty (from
- order (co-ordination, control and common purpose) and
chaos (disagreement, autonomy and questioning) – both essential for creativity and innovation.
- tough (being decisive and sometimes ruthless) and tender (kind
and sensitive to people’s needs).
- reflection (thinking about how to do something, like improving customer satisfaction,
with all the relevant information) and action (doing it as quickly as possible) i.e. slow
decision, quick action.
- evolution (continuous small changes) and revolution (doing
something completely different).
- longer term strategy (over one year ahead) and short-term
policies - beware these aren’t harmful e.g. cutting costs with redundancies may reduce employees’
motivation and so reduce customer satisfaction and profits.
A business must always have enough cash to pay its bills by minimizing costs and
maximizing sales – see cash flow management.
The best companies are:
- socially responsible (i.e. accept
they must do something for society like helping charities, schools and the environment).
Key quotes explained
“Success is a lousy teacher”
- Bill Gates (pictured right) ,
co-founder of Microsoft.
It is harder to keep a business successful than it is to make it a success. So never be
complacent, always keep improving and remember that success can easily turn into failure.
A passion to succeed is vital. “To be successful, you have to have your heart in your business, and
your business in your heart”, said IBM’s ex-boss, Thomas Watson Snr.
“Efficiency is concerned with doing things right. Effectiveness is doing
the right things”,
- Peter Drucker (in his book, Management:
Tasks, Responsibilities, Practices)
Business success is effectiveness i.e. doing the right things really well like
customer satisfaction. Efficiency is doing things at the lowest possible cost but doesn’t
necessarily lead to success. Why? The wrong things might be done efficiently!
“Control your destiny or someone else will”,
Welch (pictured right), ex-boss of the American company, General Electric.
Take the initiative by always changing and improving customer satisfaction faster than your
competitors. If you don’t, they will beat you and force you to change. Innovation is vital to satisfy
future customer needs
The American business professors, Gary
Hamel and C.K. Prahalad, define
business success as “the ability to imagine what could be” leading to the creation of new
Tom Peters (pictured right) and Robert Waterman (pictured
below), In Search of Excellence (1982)
Business success is simple – give great customer service with great staff (KISS – keep it
simple stupid!). To achieve this, the best companies do eight things:
• Close to the customer - give the best possible service and quality to
• Productivity through people - treating employees well so that they do their best to
• Hands-on, value driven – customer satisfaction is valued and prioritized by all
employees including managers.
• A bias for action – doing things quickly to satisfy customers.
• Autonomy and entrepreneurship – encouraging innovation and giving people freedom to
satisfy customers on their own or in teams (i.e. empowerment).
• Sticking to the knitting - doing the business you know best e.g. McDonald's selling
• Simultaneous loose-tight properties – a mixture of control from head office over the
things that matter (like quality, customer service and the organization’s policies and objectives) and power to
carry them out given to divisions, teams and individuals.
• Simple form, lean staff – a simple organization structure with minimum staff at head
Partnerships with People (1997)
A British government study which found that the best companies have
- shared goals (or objectives).
- shared effort (teamwork).
- shared information (through effective two-way communication between management and
Ridderstrale (pictured right) and
Nordstrom (pictured below),
The Funky Business (2000)
The “funky business” is successful because:
- employees have the right values, attitudes and knowledge.
- key customers are extremely happy.
- customers changing requirements are met through innovation,
learning and the ability to change (agility).
Packard, The HP Way (1995)
The co-founder (pictured right) of the American computer and electronics company, Hewlett-Packard (HP),
describes how its success was based on:
1. Simplicity - in three areas:
- purpose - focus on making the best electronic equipment “for the advancement of
science and the welfare of humanity”.
- finance - never using long-term borrowing for business expansion.
- marketing - aiming to be leaders in HP's markets.
2. Strong commitment to people
- respect for employees and trust,
- open two-way communication and consensus (not confrontation)
- visible and participative management (“management by wandering about”)
3. Small business units
Splitting up divisions when they get to a certain size (about 1500 people).