What Really Works: The 4+2 Formula for Sustained Business Success
by William F. Joyce and Nitin Nohria
If you watch television, read the newspaper and/or magazines, frequent the Internet, or simply move in any kind of a business circle, you must have, at one time or another, pondered the following:
- Why do some organizations consistently outperform their competitors?
- What do managers at the best companies know—and do—to keep their organizations on top?
- When it comes to implementing management practices that can propel a company to lasting success … WHAT REALLY WORKS?
Well, what better way to find out than a massive five-year study in which more than 50 consultants and business school professors at top universities around the country analyzed ten years of data on 160 companies and more than 200 management practices? They called it the Evergreen Project, and their goal was to correlate superior corporate performance with the companies’ adherence to 200 commonly used practices.
Companies they identify as winners consistently followed successful practices in all four of the primary areas (strategy, execution, culture and structure) and any two secondary areas (talent, leadership, innovation, and mergers and partnerships).
- Strategy: Devise and Maintain a Clearly Stated, Focused Strategy
- Execution: Develop and Maintain Flawless Operational Execution
- Culture: Develop and Maintain a Performance-Oriented Culture
- Structure: Build and Maintain a Fast, Flexible, Flat Organization
- Talent: Hold on to Talented Employees and Find More
- Leadership: Keep Leaders and Directors Committed to the Business
- Innovation: Make Innovations That Are Industry Transforming
- Mergers & Partnerships: Make Growth Happen with Mergers and Partnerships
The key to long-term success, they argue, is implementing effective programs in the six areas simultaneously. After analyzing the data, William Joyce and his colleagues concluded that a company following this “4+2” formula over the ten year period had a better than 90% chance of being a winner.
Anecdotes from the successful companies will interest general business readers, but the contrast with the experience of companies that stumbled should be particularly instructive. The detailed profiles of “winner” and “loser” companies were especially interesting. Replete with incisive discussions of various companies’ approaches for each of the four primary and four secondary areas of practice, the book also offers summaries of the study results in table format. For managers who wonder how anybody can keep six areas of practice fine-tuned at the same time, the authors agree it may be a challenge but point to their wealth of success stories to show it isn’t impossible.
“It is time for the first book identifying the fundamental practices that create business success–the ones that do indeed really matter.”
(This book review was originally published in 2003 as one of the Top 10 Books – Edition 12.)