RELATED RESOURCES:

Articles

• The Only Competitive Advantage in Professional Services
• The Role of the Manager
• Morale and Company Performance
• Managers and Values
• CPAs and Practice What You Preach
• Why Happy Staff Are Key to Success
• Could Happy Workers Double Your Profits?
• Culture Drives Performance: Now There's Proof
• Forget Money, Think Passion

Blog discussions

• Creating a High-Trust Organization
• Whatever Happened to Quality?
• How's Your Mood?
• What Does it Take to be Truly Great?
• Warlords and Dickensian Factory Owners

NOTES FOR THE EPISODE:

Timeline:

00:54 —

In this episode, I will present some evidence that there is only one competitive advantage in business. It is one sparkling diamond with a number of facets — different ways of describing the same thing. The facets of this diamond are:

• Energy
• Excitement
• Enthusiasm
• Engagement
• Passion
• Ambition
• Determination
• Drive
• Discipline

04:17 —

However, even though this sequence seems logical (and can be proven to be the most effective) it remains true that, of all the goals that businesses say they have (make money, please client (or customers) attract and develop talented staff), the least well done are those related to managing people.

05:01 —

Let me read off to you a list of the characteristics of the most finically successful operations in my database, businesses that were achieving double the margins of the average operation, simultaneously with achieving double the growth rate.

Here’s what all the people in those offices said was true about their business:

1. Enthusiasm and morale around here has never been higher.
2. Management gets the best work out of everybody in the office.
3. Management of our office is successful in fostering commitment and loyalty.
4. The management of our office always listens to our people.
5. People are more dedicated here than in most other organizations.
6. Considering the office as a whole, the compensation system is managed equitably and fairly.
7. Management around here is trusted.
8. The quality of the professionals in our office is as high as can be expected.
9. Management operates in accordance with the firm’s overall philosophy and values: they practice what they preach.

08:12 —

There is, of course, a troubling paradox here. Many businesses, including professional companies, have nothing to sell except their people.

11:23 —

Let me give you another list from the study, which makes this point, but gets a little more specific. I asked about 74 things in my survey, and had the computer tell me whether any topics were more predictive of profits than any other.

The computer, obedient little beast that it is identified 9 things that can account for over 50% of all the variations in profitability in my database regardless of size of operation, country of operation or which industry sector the company was in.

Just knowing whether people said these things were going on took me more than half way to being able to predict their financial outcomes. Here’s the list of the key 9 factors:

1. Customer/client satisfaction is a top priority at our company.
2. We have no room for those who put their personal agenda ahead of the interests of the clients or the office.
3. Those who contribute the most to the overall success of the office are the most highly rewarded.
4. Management gets the best work out of everybody in the office.
5. Around here you are required, not just encouraged to learn and develop new skills.
6. We invest a significant amount of time in things that will pay off in the future.
7. People within our office always treat others with respect.
8. The quality of supervision on client projects is uniformly high.
9. The quality of the professionals in our office is as high as can be expected.

14:09 —

This concludes PRACTICE WHAT YOU PREACH the third episode in my series, Strategy in Professional Businesses.