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Publication #HR007

What Business Winners Do Right, Where Business Losers Go Wrong1

Allen F. Wysocki and Karl W. Kepner2

Introduction

Beginning with the book In Search of Excellence by Peters and Waterman, significant management research resources have been spent in an effort to identify the business characteristics that are most shared by business winners. Some studies have also focused on identifying the characteristics that tend to be shared by those business organizations that are not effectively achieving their performance potential; these might be described as business losers. Certainly, a logical strategy for improving business performance would involve avoiding the characteristics of business losers while emulating the characteristics of business winners.

Business Losers

Characteristics

Research has identified at least six characteristics that tend to be associated with poor performing business organizations (Table 1). The checklist in Table 1 can be used by managers to evaluate the extent to which the loser characteristics are descriptive of their business organization. In this regard, it is often useful to obtain the perspectives of many organizational managers and discuss in some detail the reasons for perception differences.

  1. Financial poverty. Many business organizations suffer from financial poverty because they are often started with inadequate financial reserves or have inadequate funds to invest in needed and critical resources. (Without adequate financial resources, organizations often die prematurely.)

  2. Managerial Short-sightedness. This can be demonstrated in many ways (e.g., not planning for the future, short-term actions that jeopardize long-term longevity, and an “if it ain't broke, dont fix it” management philosophy).

  3. Managerial Blundering. This term is used to describe management teams that have botched important decisions (e.g., the Ford Edsel and New Coke fiascos).

  4. Managerial Ignorance. At least three types of managerial ignorance can be identified: (1) when management doesn't know, (2) when management doesn't know that it doesn't know, and (3) when management thinks it knows but it doesn't. (Under these circumstances, there is no incentive to obtain the knowledge that will correct the ignorance.)

  5. Managerial Cowardice. This term refers to situations where the needed actions are known and the financial resources exist, but the management team is afraid to take and implement the needed actions. (Management is afraid to risk new opportunity investments.)

  6. Organizational Impersonality. This is a major cause of business failure (e.g., managers not knowing their workers' names, automated telephone systems, and customers having to pay extra to personally interface with organizational personnel).

Actions

To what extent are any of these business loser characteristics descriptive of your organization? Which loser characteristic poses the greatest threat to organizational survival? What specific actions need to be taken within what time period to eliminate existing loser characteristics? These are hard questions for management. Yet, organizational survival may well be dependent on objective analysis and actions taken on these and related questions involving these six business loser characteristics.

Business Winners

Characteristics

Several years ago as a follow-up to the In Search of Excellence research, the Arthur Anderson organization identified 10 characteristics that permeated throughout successful mid-size U.S. business firms (Table 2). The checklist in Table 2 provides management teams a format for assessing the opportunities their organizations have to more effectively acquire and emulate the “winner” characteristics on a four-point scale (none, some, significant, great).

Most of the winner characteristics are self-explanatory. Two aspects of being an innovator seem particularly relevant: (1) the organization's past, present, and future innovation image in the marketplace and (2) future innovation opportunities and the commitment to remain or to become an aggressive market innovator.

The experimentation characteristic (#6) involves the number of experiments in process and, perhaps more importantly, the source of ideas for these experiments. Organizations that do an excellent job of attending to the fundamental needs of their associates accomplish a significant portion of their experimentations and innovations at the associate level rather than at the top- and middle-management levels. It is interesting that business winners are more effective at Thinking Like Customers (#8), Rewarding Performance (#9), and Leading by Example (#10) than their less successful competitors. These seem to be three important ingredients for future organizational success and are characteristics where improvement opportunities generally exist.

Actions

Which of the identified business winner characteristics provide your organization with the greatest opportunities? All business organizations have the opportunity to more effectively exploit one or more of these success characteristics. It is hoped that this checklist will provide you and your management team with a more focused direction regarding significant improvement opportunity areas.

Conclusion

We hope that this article helped you to become better informed regarding business winners and business losers. We invite readers to provide feedback (via email) on whether or not you agree with the authors' position on these agree/disagree statements.

Your comments and suggestions are always welcome and you may email us directly at wysocki@ufl.edu or respond via extension web page http://www.fred.ifas.ufl.edu/directory/wysocki-allen.shtml.

Drs. Wysocki and Kepner are happy to lead a workshop on Business Winners and Business Losers.

References

Extension presentations led by Professor Karl Kepner.

Class discussions in AEB 4424 (Human Resource Management in Agribusiness) and AEB 5757 (Strategic Agribusiness Human Resource Management).

Tables

Table 1. 

Business Losers.

Business Loser Characteristics

Organizational Evaluation

 

Very Descriptive

Somewhat Descriptive

Not At All Descriptive

Financial Poverty

_______

_______

_______

Managerial Short-sightedness

_______

_______

_______

Managerial Blundering

_______

_______

_______

Managerial Ignorance

_______

_______

_______

Managerial Cowardice

_______

_______

_______

Organizational Impersonality

 

 

Associates (Personnel)

_______

_______

_______

  Customers

_______

_______

_______

Table 2. 

Business winners.

Business Winner Characteristics

Organizational Opportunities

   

None

Some

Significant

Great

Innovation as a Way of Life

  Historically, Past-Record Image

_______

_______

_______

_______

  Future Opportunities

_______

_______

_______

_______

Create, Develop, Exploit Small Market Niches

_______

_______

_______

_______

Compete on Value Not Price

_______

_______

_______

_______

Develop/Communicate/Live a Strong Sense

of Mission and Vision

_______

_______

_______

_______

Attend to Business Fundamentals

  Finance

_______

_______

_______

_______

  Associates (Personnel) and Customers

_______

_______

_______

_______

Encourage Experimentation

  How Many?

_______

_______

_______

_______

  Idea Sources?

_______

_______

_______

_______

Attack Bureaucracy

_______

_______

_______

_______

Think Like Customers

_______

_______

_______

_______

Reward Performance

_______

_______

_______

_______

Set Examples at the Top

_______

_______

_______

_______

Footnotes

1.

This document is HR007, one of a series of the Food and Resource Economics Department, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida. Original publication date May 2001. Revised September 2008. Reviewed February 2012. Visit the EDIS website at http://edis.ifas.ufl.edu.

2.

Allen F. Wysocki, assistant professor, and Karl W. Kepner, distinguished professor, Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL 32611.


The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other UF/IFAS Extension publications, contact your county's UF/IFAS Extension office.

U.S. Department of Agriculture, UF/IFAS Extension Service, University of Florida, IFAS, Florida A & M University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Nick T. Place, dean for UF/IFAS Extension.