The July-August issue of the Harvard Business Review has published the results of a fascinating four year study undertaken by Christian Stadler and his colleagues. They have produced the European equivalent of what have now become commonplace studies into what makes great American companies great. The main findings (which they call the four principles of enduring success) of Stadler and his colleagues’ research took them by surprise.

1. Exploit before you explore. The authors say, ‘Throughout their history, the great companies in our sample have all emphasized exploiting existing assets and capabilities over exploring new ones’. Zook makes a similar discovery in his study into what makes a business unstoppable.

1. Diversify your business portfolio. This is interesting since as Stadler et al say,
   ‘ Good companies tend to stick to their knitting, but the great companies know when to diversify’.

1. Remember your mistakes. As you and know well, some businesses are better at rehearsing their mistakes than they are at learning from them.

1. Be conservative about change. The lucrative change management industry will not welcome this finding with open arms! The researchers observe that great companies seldom make radical changes.

I don’t know about you but, as a business leader, I am challenged and mesmerised by the elegant simplicity of these principles: easy to articulate but so hard to hang on to in a habitual way. Food for thought – perhaps.

Tags: rehearsing

This entry was posted on Tuesday, July 24th, 2007 at 3:39 pm and is filed under Ideas to Action, Purpose and Vision. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.