How to Make a Great Business Great

Authors Mark Thompson and Brian Tracy explain why small companies outpace bigger rivals, how employing excellent workers is "free," and why recession is the best time to invest in your business

By Marshall Goldsmith

The only way to survive and thrive is to build a great business that can withstand the economic shocks of any market as it rises to the top of the industry. It's now more important than ever to develop sustainable strategies for attracting good customers and recruiting better leaders to serve them.

I recently sat down with my friends Mark Thompson and Brian Tracy to talk about this subject, which is also the topic of their new book Now, Build a Great Business! (Amacom, 2010). Brian, a prominent voice in analyzing personal and business success, has consulted for 1,000 companies and spoken to five million people worldwide in the last 30 years. Mark, co-author (with Jerry Porras and Stewart Emery) of Success Built to Last (Plume, 2007), is a successful senior business-communication executive and angel investor. He has served as a board member and adviser to Global 1000 companies and as an executive at Charles Schwab (SCHW).

Marshall Goldsmith: How do you define a "great" business?

Brian Tracy: In its simplest terms, a great business is one that has a great product or service. This is defined as something that people want, need, can afford, and can enjoy and take full advantage of. The simplest measure of all to predict business success is to calculate the number of times that a customer—after using your product or service or visiting your place of business—says the magic words: "This is a great company. This is a great service. This is a great business."

Every successful business or product in the marketplace is described as being a "great" product or business. When everyone in your company is focused on eliciting this response from every single customer, your business will transform—and often very quickly. One of the seven key elements that Mark and I found that all great companies have is a great product or service.

When it comes to breakthrough success, why do small startups routinely beat big businesses? How can corporate executives and managers apply your principles?

Mark Thompson: Most successful companies started small and took market share from larger competitors to succeed. Why should any small company be able to compete against big companies that have more money to spend on experienced people, better equipment, better distribution and service for customers, etc.? It shouldn't be possible, but the one core competency that big companies avoid (and managers often sabotage, even while pretending to support it) is the one thing that makes little companies win. It's innovation. All innovation requires experimentation and all experiments require failure. How many big companies tolerate failure? Would you like to be fired, demoted, or humiliated? Not likely. Managers in big companies avoid risk and failure. They think they can avoid it, but eventually it catches up with them. Small companies have no choice but to take risks that are relatively bigger (and [they] fail more often) than their larger competitors.

This is also true about individual people. According to our global research in 110 nations, successful people take risks and fail more often than unsuccessful people. Winners ultimately set themselves apart, innovate more, get smarter, more skilled over time, and get ahead because they make themselves vulnerable to risk. Ironically, unsuccessful people don't worry enough about winning. They are more concerned about avoiding failure, which severely limits their ability to grow.

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