Here’s an interesting statistic: According to author Keith McFarland, only one tenth of one percent of small businesses ever break through $250 million in sales.
There’s a good reason he dug up that stat; it helped him write a book, “The Breakthrough Company – How Everyday Companies Become Extraordinary Performers.”
As much as I’d like to take credit for sharing this info with you, I have to be honest. It was Taz Murray, president and ceo of Dynamic Confections (featured this month) who turned me onto McFarland.
And although I haven’t gotten through the book yet, there are a couple of bullet points I’d like to share with you that I gleaned from the publishing house’s synopsis on it.
Before I do, however, it’s important to note that McFarland spent five years winnowing through 7,000 companies in order to come up with his list of nine breakthrough examples. According to publisher Random House, he spent five years analyzing “the world’s largest growth-company performance database and interviewing more than 1,500 growth-company executives on four continents.” Looks like he did his homework.
In any case, some of the takeaways cited in the book are fairly common-sense truisms. Nevertheless, they’re worth repeating since it’s so easy to lose track of where we come from, where we’re going and how we’re getting there these days.
First, there’s a belief that founders and entrepreneurial leaders have to step aside for professional managers at some time in order to “get to the next level.”
According to McFarland, that’s not the case as long as the cult of personality doesn’t get in the way. As the author says, founders can stay on for as long as they “crown the company” and not themselves.
Second, don’t hesitate to bet on the company’s future, even if it means going up against multinationals. The true risk is staying complacent and being afraid of getting into the fray. Getting one’s nose bloodied teaches you to duck the next time and level a counterpunch that gets you the knockdown.
Now, I’m not advocating picking a fight, mind you, but don’t back down just because the company you’re competing against is bigger. The thud will simply be that much louder.
Third, it’s important to surround yourself with “networks of outside resources,” or “scaffolding” as McFarland calls it.
In an interview with Inc. Magazine at the beginning of the year, McFarland shared additional thoughts about what kinds of personalities head up breakthrough companies. For one thing, none of the entrepreneurs who broke through fit a particular mould.
What was common amongst them?
Rather than impose their own vision, these leaders aimed at creating an environment that fostered loyalty to the company as opposed to him- or herself. Moreover, these executives – be they larger-than-life or low-key – knew when to get out of the way.
They recognize that employees don’t have to be loyal to them, just to the company. Occasionally, that means getting an earful and listening to what’s screwed up and what needs fixing. Yes men and women are often the first to flee when the ship starts listing.
But I’m going to stop right here with McFarland’s advice, knowing that talk is cheap. The demands put on small and midsized entrepreneurs are overwhelming, and I’m in no position to council anyone on how to run their business. I can, however, pass along tips on what promises to be interesting reading. Give it a go and let me know what you think.