Innovation…It’s a given companies must innovate but long-standing companies have a much harder time doing so. C-suite execs must ring-fence labs and pilots and encourage risk-taking. If you’re not comfortable with change not much will change. This includes active learning of new technologies, applications and potential sources of disruption.
Distinctiveness…Companies must have a unique reason-for-being…a real distinctiveness in the marketplace. I’ve always felt I needed to genuinely believe that when I “pitched” my company vs. others that I genuinely believed that we were uniquely positioned to do the job for the client better than anyone else. You must have people who believe in your “specialness” or you’re doomed.
Relevance…The pace of change is so rapid that the mandate to stay relevant is more essential yet harder to achieve. All companies wrestle with digital transformation, broad stakeholder engagement and understanding which hot button social issues they must engage in and which they should not. But the ones who succeed are the ones who embrace all these challenges and appreciate this “new normal.” They learn to get comfortable outside their comfort zone.
Culture…The dynamics of an organization – the way in which people collaborate, support and align with all others – is one of the greatest single critical success factors for corporate performance. Over time, too many veteran CEOs and their C-suite peers conclude “our culture is our culture.” It isn’t. Even in 100+ year-old companies, culture is a living, dynamic organism. If it’s supported passively, it will erode and hurt the company. But if it’s continuously nurtured and supported, then you may have a company that’s durable and well-suited for the changing dynamics of the marketplace.
Talent…I saved this for last but it’s probably number one. I have come to believe more and more that every business is a talent business, whether you run Walmart, Pfizer, McKinsey or Burson Cohn & Wolfe. The ability to recruit and retain the very best talent is far and away the greatest indicator of future performance.
M&A activity can be a way to accelerate growth and/or solve problems. But if the above fundamentals aren’t actively practiced, even new companies that are born from these M&A deals are destined to be challenged once again. Yet if they embrace these fundamentals, their future can be greater than just the sum of their parts.