Often we try to make the keys to success complex.  Whole industries have sprung up around involved methods that purport to drive companies towards successful achievement of their Goal.  Six Sigma, Lean, Balanced Scorecard – the various “solutions” go on and on.  The more involved the solution, the more the business owner becomes dependent upon a mystic “expert” to guide them to their commercial nirvana.

For the owners of businesses who still know the employees by name, who think about their business like a family member, these processes are intimidating.  And overwhelming.  And ultimately inapplicable to their day to day concerns.  Success in business can be, should be, simple to describe and personal to deliver.  Something as small and simple as a PEA can describe the elements of success.

PEA stands for Preparation, Execution, and Accountability.

Preparation:  Define, Understand,  Decide, Explain

Define:  Just like a football team prepares for their next opponent, a company needs to prepare for their next year of business.  A coach defines his team as a passing team by focusing around a quarterback, or a running team by building around a running back, or a defensive powerhouse that wears down their opponent.  Defining their team is important to how they approach the next season.  As business owners, defining the business is the key first step to approaching the New Year.

One key way to measure of a corporate definition is the owner’s elevator speech.  As an owner, think of being in an elevator with a key business prospect.  You have six floors to tell this business prospect what it is your company does, and does better than the competition. If you can do it compellingly in 60 seconds, you have defined your company well.

Understand: One of the keys to understanding your company’s abilities is to look at it through the eyes of your customer.  As the business owner, you should know what draws your customers to your company, what makes it unique enough that they want to continue to do business with you in spite of numerous companies that do much the same thing.

How do you do this?  The best way is to ask them.  The Owner or President of a company should be THE BEST salesman for the organization.  Call up your customers, take them out to lunch and ask them for three to five reasons what it is about your company that attracts them to buy from you.  Listen to their responses and write them down.  If you are like most companies, a handful of customers make up the bulk of your sales, so the process won’t take long (and you might get some additional sales out of the process).  Don’t send out questionnaires; don’t do this over the phone.  Look them in the eye and watch their body language.  This will tell you as much as their words will.

Decide:  Just as a football team has a play book with hundreds of plays, success depends on selecting the right plays for the opponent that they will face.  A team could use every play in the playbook and never repeat themselves but the confusion and inefficiency of doing so would lead to a certain loss.  Instead a Super Bowl Team tailors their plan, using the same or similar plays over and over again because they want to focus at what they are good at and the weaknesses of their competition.

You as the owner need to decide what your company is good at.  The decision is straight forward -  your best customers have told you what you do well and what distinguishes you from your competition. The difficulty is giving up those things that you don’t do well.  Peter Drucker once said that Americans are strange managers – they always work to improve what they don’t do well.  Successful companies, he said, do more of what they do well and less of what they don’t.  Your CFO will provide key information regarding gross profits by product line, sales growth trends, and the effects of the decisions on expenses and profits.  The key to the decision step is to pick no more than three characteristics or products or services that your customers have told you distinguish your company, focus on them and stop doing everything else.

Explain:  As the owner, you now need to explain your game plan to the other players that are going to help you execute the plan.  Working with your CFO, you need to document the steps that you have completed.  This document is your business plan for the next year. 

The other stakeholders – those people who will help you in achieving your goals – such as your banker, insurer, tax preparer and employees, need to have a clear understanding of the plan and how it may affect them.  Working with your CFO, you can explain whether the plan requires additional working capital for sales growth, additional equipment to replace or expand productive capacity, or changes in the standard performance ratios as obsolete inventory is liquidated.   By explaining in advance, all the supporting players know what will be expected of them in the coming year.  But preparation, no matter how strong, requires strong execution.