How Great Companies Stay at the Top
All organisations seek to be leading in their fields. However, not all can. Here is how great companies stay at the top by following these principles.
We no longer live in a world where only the wealthy can execute their ideas. Thanks to the technological progression of our society, we are all capable of doing it. As we enter into this new era of business, we will see failings of large organisations.
However, throughout all of this, we will still see some companies that continue to thrive. These companies are what I call miracle workers. They manage to survive through the thick and thin and continue to lead their industry.
We all seek qualities that bring us this advantage. We do not want to be washed away by economic circumstances or changes to our market. Instead, we want to remain valuable and stay leading in whatever we are doing.
Although this is a great ambition to have, it is difficult to do. Companies like Google and Microsoft have not remained global leaders by chance. They have all implemented strategies that ensure they are leading their competition.
So, what are some of the things the global leaders do that others do not? And why do these strategies work for them? In this short article, I seek to reveal to you the three secrets of highly successful businesses.
Even if you are not a business owner, you can apply these rules to your individual life to stay at the top of your game. So, here are the three rules that keep a great business running.
#1 Better Rather Than Cheaper
One of the big mistakes entrepreneurs are making today is focussing on the cost of their product. A simple rule we learn in economics 101 is if something is cheaper, you will have more demand.
Although this rule is true, it does not tell the whole story. For example, some consumers are more price-sensitive than others. So, just because you can sell for £1 cheaper, do not expect everyone to come running to save £1. Many other factors are not considered in this simple rule as well.
It is hard for beginner entrepreneurs because they often try to undercut the market to get attention. They try to signal to the market that they can do the same thing those in their industry are doing but cheaper. Now the problem is not trying to undercut the market. The problem is making it a habit.
When running a business, you will find that efficiency becomes important. If you can make your processes faster, you can sell to your customer for cheaper. And of course, companies do this with hopes that they will profit from it with more customers coming to their product.
We also do this in our own lives. We believe that if we can offer our help, services or advice for cheaper, we are better off. That is why leaders spend a lot of time working on effective communication to get their message across in less time.
Although this approach will reap rewards in the short term, it will lead to devastating results in the long term. The reality is, you will never be able to run what you offer down to a cost of zero, so why head in that direction?
Great companies do not focus on making their products cheaper. Instead, they focus on making them better. Now, that may mean cheaper for the consumer, but in most cases, it is not. It often takes the form of spending more time in each unit sold and moving forward.
Your customers will appreciate cheaper goods, but they respond better to increases in quality. We all know that feeling when we see something new or receive an upgrade. Even if we are paying more for it, our initial feeling of excitement covers the cost.
So, great companies seek to constantly improve their products. They put the customer first and think about what would make their customer happy. They put their customer’s satisfaction over their efficiency.
#2 Focus On Revenue Not Cost
When it comes to life, we often try to encourage people to focus on the positive. After all, a life that is governed by the negative would not be very satisfying at all.
With almost everything in life, looking forward to the positive and being optimistic reaps reward. So, why when it comes to business, do we seek the exact opposite?
Much of companies operational system is to reduce cost. Employees spend a lot of their time trying to come up with new ideas to reduce the cost to the company. Due to the company culture, there are not many ideas that increase the revenue of a company.
I have found that companies have more projects seeking to reduce costs than increase revenue. Leaders of organisations spend much of their time focusing on the negatives rather than the positives. As a result, their approach to increasing profits is to reduce costs.
However, if we took this approach in life, we would find our lives to be miserable. We would not go out with our friends, go on holidays or have families. When we think about the cost in the profit formula, we become greedy and self-centred. We try to help ourselves and not others.
Great companies focus on revenue. They are constantly encouraging their employees to think of ideas that will bring more money in. You will find these companies have better working environments and are more forward-looking. They generate better ideas and build positive cultures.
These are the companies the younger generation want to work for. They want to be part of companies that are focused on increasing output rather than decreasing input. Even in our own lives, we would become lazy individuals if all we cared about was reducing our input. So, think about increasing your output to generate more revenue and positivity in the world.
#3 Increase Price, Not Volume
Number 3 is a result of the first two. As a result, the company will suffer increased costs as they focus on making their products better. However, the result is that they can increase the price of their products.
In the world of content creation, you will find that volume helps at the beginning of your journey. After all, you need to be noticed, so you need to make more noise than others. However, after a point, it is essential to know the difference between noise and quality.
When we try to make things cheaper, we reduce our costs to sell at a lower price. As a result, we increase profits because we can sell more, but each unit has a lower profit margin. Great companies do not seek to operate in this way because people do not remain leaders doing this.
Again, if we applied this to our life, we would find ourselves doing more just to climb. We would need to increase our number of projects, the number of businesses we run or the number of friends we have to be the best. But that is not how life works at all.
We find that the people who deliver the best quality and live the most fulfilling lives do not need much at all. A great consultant does not need thousands of customers. Ten is enough to run a profitable business. Why is that?
Well, the consultant can charge more for each unit because the quality of each unit is worth that much. The goal of great companies and individuals is not to increase how much they can produce or how much they have. Instead, it is to increase the value of the things they do have.
Through doing this, they remain at the top because they continue to get better.
When we focus on making things cheaper and our costs, we become greedy. These two things benefit the company and us because we have to do less to get more.
However, the best companies understand that if they are to be in business for the long run, the customers come first. The customers are the ones that drive businesses to the success they become.
So, listen to your customer and improve the quality of your products and focus on revenue. You will be surprised how much each customer will be willing to pay you for each unit.
I am a Visionary and Writer who seeks to enrich society by challenging how we do business today to lead to a world of better leaders and opportunities tomorrow.