It is easy to spot success. The successful companies are the ones that remain standing while others fall by the way. Perseverance is one of the pillars of any successful company. Great companies make it look easy. They seem to just coast in a quiet sea. The waters are never choppy and the skies are never grey. At least, that is how it seems to those watching from the sidelines. But that is never how it really is. Great companies have to overcome all kinds of obstacles. It is never as easy as it looks. Indeed, it is never easy at all.
Successful businesses are like championship sports teams. They have to overcome adversity from without and within. They have to find a way even when their playmakers are out with injury. They have to have a next-person-up mentality. They never have time to cry over their losses. They have to always keep moving forward. And they have to continue to believe in the plan. These are the things that any first-year business student could identify. No one could write a doctoral thesis based on those simple and obvious observations. To understand what makes them successful year in and year out, you have to understand intangibles like the following:
Knowing the Probabilities
You have to be able to read the probabilities if you are going to succeed like the great ones. When you are taking business courses to improve your degree, be sure to study carefully for those probability theory courses. Understand that making the right decisions time after time is not a matter of luck. Nor is it gambling. Crossing fingers and making bets are the tools of people who are destined to lose a lot of shareholder trust, not to mention money.
Tim Cook has mastered JiT inventory so well, it looks like he is consulting fortune tellers. He isn’t. He can’t actually see the future. But he understands what is most likely to take place amid a myriad of bewildering options that leave others guessing. That is the power of probabilistic thinking. Skating to where the puck is going requires that you successfully determine where the puck is actually going. What are the chances of your primary supplier being closed due to a devastating tsunami? No one can know for sure. But calculating probabilities is just one part of the successful equation.
Contingency Planning
With the focus on omicron, the business community is busy making contingency plans. But the truly prescient companies had contingency plans for today in place back in March of 2020. They had more than probabilistic instincts. They had a durable plan. We didn’t need world-class doctors to tell us that the job of any virus is to mutate. It didn’t take long before serious variants emerged. While publicly hoping for the best, the big companies were privately planning for exactly the 2021 we had.
If we could see the meeting notes from those early planning sessions, we would see a lot of if/then statements stacked one atop the other. Companies trying desperately to survive the current crises are in meetings every day making plans to deal with what might happen in the next six months. Truly successful companies are in meetings making plans for what might happen in the next six years. You know that great companies have solid plans. What you seldom see is the many layers of contingency planning undergirding it all.
The Ability to Pivot Quickly
Palm, Blackberry, and Nokia are among the companies that were unable to pivot fast enough after seeing the deadly wave of the iPhone headed their way. Microsoft would have also been listed among them had smartphones been a more important part of their business. They were just as flat-footed as the others. Google and Samsung knew that the light at the end of the tunnel was a train. They changed almost everything about their approach fast enough to not only survive, but thrive. They weren’t better or smarter than Palm and the others. They were faster to pivot.
You already know how to make your business good. If you want to take it from good to great, learn to read the probabilities, do better contingency planning, and always be ready to pivot.
