“Success is how high you bounce after you hit bottom”

General George Patton

I recently had two conversations with sales reps from different construction companies, both of which serve the same market in the same area. One complained bitterly about the bad economy and what it is doing to his sales and to his company. The other beamed brightly as she relayed that “business is great,” and that she couldn’t be happier with how things are going. What distinguishes these two firms is not luck.  There are tangible differences in the ways that these two businesses are run, and it makes a difference.

No question, the construction industry has been hit hard by the economic downturn, which we all know started with the bursting of the so-called “housing bubble.” But these two companies are both operating in the same economy. Therefore, it only makes sense to consider some questions about how these two firms are doing business. Why is one enjoying so much success, while the other one is having such an awful time? And what could the one that is doing so badly do to improve its results?

One clue to the difference was evident from how the rep from the company whose business is on a roll described the key to its success: “We have a great team!” she said enthusiastically. While she didn’t give away any trade secrets, the language that she chose holds a clue.  

Note that she located the source of her firm’s success as internal — its people see themselves and their actions as responsible for their fate. Their success derives from taking charge of their situation. In contrast, the salesman from the other company identified the determinants of its success or failure as external — “it’s the economy.”  He, and doubtless others in his company, see their outcomes as determined by outside forces. When the economy gets better, their lot will improve — maybe.

Strategic planning: Essential for taking charge

Study after study of businesses that outperform their competitors show that they invest more time, energy, and resources in strategic planning. They review and revise their plans more often, they do more thorough research in developing them, and take more action to make sure that their plans are reflected in their daily activities. 

This puts them in the position of being able to determine their outcomes to a much greater extent, and it makes all the difference in the world. Case in point: The construction company that is doing so well is currently focusing on building retirement communities, which is a great strategic choice at this point in history. Planning pays.

As peculiar as it sounds, a surprisingly large numbers of businesses are run independently of a specific plan. Some simply don’t have one. In other cases, a plan was assembled at one point, but more as a matter of course than as a conscious set of decisions about the future. It is now someplace gathering dust and has little to do with day-to-day operations. In a turbulent economy, such approaches lead to problems that could have been avoided, and invariably give an advantage to competitors that manage in more proactive fashions.

Frequent reviews and revisions are essential

The process of strategic planning, if done properly, will force a useful review of the nature of a business and minimize conflicts regarding its direction and operations. In business environments characterized by the volatility and change that we’re witnessing, this is an essential activity. 

For example, for several years, the Blackberry was the digital communication device of choice for many successful executives. The company responsible for the Blackberry, Research In Motion (RIM) had been well positioned among its competitors, but lost that position to T Mobile’s “Droids” and Apple’s iPhones. Chief among the reasons for RIM’s decline was its complancency — failures in its strategic planning process, which simply was not aggressive enough to prepare the company to compete with the technology developed by its competitors.

Sound approaches to strategic planning

To be effective, a good planning process has to address a number of business concerns, some of which are of the “soft,” less tangible sort, while others are more clearly material in nature.  Some of these are discussed below:

Corporate identity: This is usually addressed by means of determining what your vision for the business is (what needs does it serve?) on the one hand, and its mission (how it will go about fulfilling that mission). It’s also best to include a statement of values, or ethical principles that will be guide the business and how it operates.

“S.L.O.T.” analysis: Serious research regarding the business itself and the environment in which it’s embedded. This would include the company’s Strengths that can be leveraged to its advantage, Limitations (what areas does it need to attend to be more competitive, or what it is not good at), Opportunities (what is happening in the external environment that will help it prosper if properly exploited), and Threats (competition, costs, regulations, and other external factors that could be serious disadvantages if not addressed and attended to).

Critical goal categories: Areas of activity for which you’ll be setting specific business goals (e.g., increasing sales, cutting costs, hiring & training of personnel, expanding/reducing range of products offered, etc.).

Specific goals: These must be measurable, attainable, and realistic. It’s important to quantify these in terms of tangible outcomes. 

Action steps: Exactly what you’ll be doing to realize these proposed outcomes.

Accountability: Who is responsible for progress toward goal achievement and how the progress is to be assessed.

Plans, goals, and success

Goal setting is perhaps one of the most inexpensive, yet most underutilized tools to achieve success in any area of activity, be it in business or life. Psychologist David McClelland spent an entire lifetime to studying individuals identified as high achievers, and found that the acquired habit of systematically using goals was more important than natural ability (e.g., IQ) as a determinant of success.

If you take a look at the advantages having clearly identified goals convey, they are numerous.  Those that follow constitute a very short list:

Staying focused: In a world of distractions, it pays to have ironed out an action plan that is based on desired outcomes.  By “beginning with the end in mind”, and constantly staying in touch with that end, it’s easier not to fall prey to all those things that can get you off track.

Simplifying the decision making process: Commitment to clear goals helps you avoid confusion by limiting the array of decisions to those that are directly related to your stated purpose.

Increasing motivation: There is nothing more exhilarating than successful goal attainment, even if the payoff isn’t material or monetary. The mere sense of accomplishment is exceedingly rewarding in its own right. Think of the fun of leisurely shooting a basketball at a hoop and making the shot, or any other simple successful action that brings a sense of completion to an action.

Building self-confidence: Goal attainment in any area seems to build a general sense of competency that “spills over” into other areas of activity.

Taking charge in life and business

Optimism, planning, and goal setting are all intimately related elements in stories of successful individuals as well as successful business endeavors. They all tend to feed off of one another, so that increments in any one of these areas is worth pursuing in its own right. The use of affirmations, or positive statements about one’s capabilities and strengths are one way to get the ball rolling in the right direction. Many successful people generate affirmations, write them out, and read them out loud several times a day. Some of the best professionals I know swear by them.

The fact of the matter is that success is much more of a choice than people often think.  There are numerous ways to increase your capacity for success, and those that use them enjoy distinct advantages over those who neglect them. This principle is applied diligently by successful corporate leaders.

Think and grow rich

I have to mention this. One characteristic of successful people is that they read a lot more than their less successful counterparts. Given the fact that reading is such an inexpensive habit, that’s one step in the right direction that just about anyone can take. 

What should you read? That matters, but less important than the fact that you do. I always recommend history, since it’s loaded with accounts of resourceful people who faced and overcame obstacles. I also recommend The Bible, since it’s the bestselling book in the history of mankind.

Perhaps all you care about right now is money — that’s understandable, given the situations that many individuals and businesses are facing right now. For those of you who have not read it yet, I’d recommend Napoleon Hill’s Think and Grow Rich. It will give you some insights and inspiration for dealing with obstacles and times of trial. By the way, it’s also chock full of stories from history, so you’ll get that, too.