BUSINESS PLANS

5 Essentials Your Business Plan Probably Lacks

A brilliant strategy and flawless tactical execution aren't enough. You've got to plan for the human side of things.
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So you've got a killer strategy that's ready for customers, competitors, and possible disruptive technology. And you've created and are executing to a plan that harnesses big data for logistics, supply chain, and distribution.

Success is inevitable, right? Wrong. You'll be a flash in the proverbial pan if you neglect five essential, nonanalytic, humanistic factors, according to Rich Karlgaard in his new book The Soft Edge: Where Great Companies Find Lasting Success.

On the basis of his study of dozens of highly successful companies, Karlgaard draws the parallel between personal health and corporate health by showing both as equilateral triangles. Here's the one for personal health:


"That triangle is intuitive. To be truly healthy, you must not only take care of your body and mind but also have a social connection. The lack of that connection is deadly; prisoners in solitary confinement, for instance, often go crazy and try to kill themselves."

According to Karlgaard, companies have a "health pyramid", too:


"Your strategy (market, customer, etc.) is the foundation while the hard edge (supply chain, distribution, etc.) supplies the tactics by which you execute that strategy."

However--and this is essential--without the third side of the triangle, the human side, even the best strategies and tactics fall flat. Here's what you need for long-lasting success:

1. Trust

Trust comes in two varieties: external (whether your customers, partners, and investors trust you) and internal (whether your employees trust you and one another).

Without trust, every activity has to pay a "mistrust tax." Suddenly, lawyers are everywhere, gumming things up. Employees spend more time covering their butts than doing their jobs.

The source of trust, internal and external, doesn't lie in your corporate ethics statement or your brand promise. It lies in consistency. People trust bosses and co-workers who are who they say they are, even if they're jerks.

For example, Steve Jobs was a jerk, but he never pretended to be anything else. Similarly, Jim Goodnight, CEO of SAS, is a famously nice guy creating an environment that regularly wins "best place to work" awards.

Despite diametrically opposite management styles, both CEOs built incredibly loyal, effective teams, because their employees knew exactly who they were dealing with. Neither company tolerates hypocrisy.

2. Smarts

You already know that smart people are essential to a company's success. However, there's another element of smartness, which is creating an environment where smart people needn't do dumb things in order to survive and thrive.

For example, in the early 1990s, I worked at DEC with some of the smartest people I've ever met. Despite that, though, they acted like idiots, expending vast sums of intelligence in playing pointless internal politics.

Take a look at the most successful companies and you'll find that they give their smart people the opportunity to be smart. Managers in these firms listen--really listen--to what their smart employees have to say.

Whether in high tech, or in something as low tech as selling insurance, when you've got a culture that values people and their native smarts, you end up with better products, more customers, faster growth, and greater staying power.

3. Teams

The concept of teamwork has been practically done to death, but it still remains a corporate attribute that's usually "honored in the breach rather than the observance."

In companies that are all about strategy and the hard edge, teams are where smart people with good ideas get smacked down into mediocrity.

To my mind, the best example here is Microsoft with its incredibly short-sighted "stack ranking" system that encouraged smart people to sacrifice everyone else on the team in order to look good themselves. (Perhaps that explains the weaknesses in a product like Windows 8?)

By contrast, Google by all accounts is really good at setting up teams and letting them run plays without too much management interference. Though the team culture at Google produced a lot of frustrating dead ends, it also created Android--a product that might eventually kill both Microsoft and Apple.

4. Taste

Taste is the most primal of the senses and speaks to the deepest part of who and what we are as human beings. In the context of business, taste isn't what happens on your tongue (unless you're in the food business) but what happens in the gut.

How do people feel inside when they use your product or service? Do they feel like a hero or a fool? Are their spirits exalted or left cold? Do they spread the word or do they shrug it off? Do they love or dread dealing with your company?

These are not analytic questions but deal with the imponderables of human nature. You won't find the answers in big data but instead in the daily practice of empathy, gratitude, and hope.

5. Story

The final humanistic element is story--not the prepackaged "how we helped our customer" stories that emerge with sad regularity from second-rate marketing groups.

The stories that matter are the human stories, in which real people did something, learning and growing in the process. It might be customers, it might be your CEO, it might be a field sales rep who has learned to believe in the value of what she's selling.

Story is also the story that you tell yourself about yourself, and that every employee tells himself or herself. Story is what gives meaning to everything, both inside and outside the business world.

If those stories are lacking or, worse, depressing, there is simply no amount of strategy and tactics that can make your company great. Same thing with the other four elements. Ultimately, the only way to be more successful is to be more human.

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IMAGE: Gallery Stock
Last updated: Apr 21, 2014

GEOFFREY JAMES | Columnist

Geoffrey James is an author, speaker, and award-winning blogger. Originally a system architect, brand manager, and industry analyst inside two Fortune 100 companies, he's interviewed over a thousand successful executives, managers, entrepreneurs, and gurus to discover how business really works. His most recent book is "Business Without the Bullsh*t: 49 Secrets and Shortcuts that You Need to Know."

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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