Getting a firm grip on the six drivers of success

By TERRY HOSKINS*

A study of business practices and performance by the Ministry of Economic Development provides a useful model for success, some insights on ways business performance can be improved and key strengths and weaknesses of New Zealand businesses.

The ministry's Firm Foundations report studied the capabilities of 2700 businesses, across a range of indicators, including: leadership and planning, employee practices, customer focus, quality and supplier focus, innovation and technology, and information.

The study shows that successful firms are proficient in all these areas and, to achieve that, make significant investments in staff training and development across a range of skills. The report also confirms that most businesses employ fewer than six people.

These insights highlight a fundamental challenge facing most businesses today and raise an important question. How, when they employ fewer than six people, can businesses acquire the essential knowledge and skills to be successful?

Businesses can be easily overwhelmed when applying the study's six indicators model of the myriad things businesses need to master for success.

It takes significantly more than a business with fewer than six people working together to be proficient in all of them. In time, small businesses can grow into larger businesses that can support additional skilled employees necessary to cover all aspects of the model.

Growth, however, relies on successful business performance and, ipso facto, small businesses need to be proficient in all areas from day one to achieve success.

This conundrum challenges all start-up and small businesses. The answer is for businesses not to try to do everything, but obtain outside help when needed. Businesses with fewer than six staff cannot hope to be good, interested or motivated enough to address all the management, operational, financial and marketing tasks effectively, let alone excel in all of them which, as the study reveals, is necessary for success.

It is essential then for start-up and small businesses to recognise the need for outside assistance while they grow. They need to engage appropriate resources and partners to effectively augment available competencies, knowledge and skill.

This is where economic development agencies such as Enterprise North Shore come in. The agency works to improve North Shore City and its region's economic performance.

It helps businesses identify and understand the nature of gaps in expertise that right now limit performance and their ability to contribute to GDP growth.

It then helps businesses to close those gaps in a timely manner by enlisting outside advice and support using Enterprise North Shore's comprehensive network of contacts, including: business mentors, professional advisers, trainers and sources of finance. In this way, businesses survive, prosper and employ additional people, and thus improve the local economy.

To prepare for outside help, businesses can use the "Business Practices and Performance Survey", on the ministry's website. The ministry will provide a benchmark report so you can compare your firm's practices and operational outcomes against average scores for firms of a similar size in your industry.

* Email team@enterprisens.org.nz or phone (09) 414-1341.

* Terry Hoskins is chief executive of Enterprise North Shore.