RISMEDIA, March 29, 2008-(MCT)-What makes a successful company? And equally important, why do some companies fail? There is no simple answer to either question. Academics, business schools and consultancies certainly devote large amounts and resources to answering both.
But according to Eric Rosenkranz, the chief executive officer of the business consultancy e.three Asia, success starts with understanding the customer.
“You need to identify the customer group, their needs and problems, and create a product or service that solves their problems and satisfies their needs,” Rosenkranz said. “You can’t forget to first move and continue to do it better and better.”
Rosenkranz, speaking at a recent entrepreneurship forum, said that only by understanding customers can a business tailor your products and services to meet their needs and create brand loyalty.
“The shift from products to customers is the most critical one that every company must make,” he said.
“The organization must learn to think of itself not as producing goods or services but as buying customers and doing the things that will make people want to do business with it.”
Success does not necessarily depend on being first into a new market segment, said Rosenkranz, a 30-year veteran of the marketing communications industry and a former senior executive of Grey Global Group.
He noted that Microsoft achieved global dominance in PC operating systems even though Windows was not the first platform in the world.
Knowing why companies fail is an equally important question.
One survey by the Harvard Business School noted that 95% of the typical workforce do not understand their organization’s strategy and that 85% of executive teams spend less than an hour per month discussing strategy.
The survey also noted that 70% of organizations do not link middle management incentives to strategies and 60% of organizations do not link their strategies to budgeting. A huge 90% showed that companies fail to execute planned strategies.
“Strategy is not a vision or next year’s operating plans. You need to know your customers before planning strategy. It’s the customers who will dictate what to produce and where to sell,” Rosenkranz said.
Yen-Lu Chow, the managing director of the Singapore-based WholeTree Ventures, said entrepreneurs needed to be proactive, have a sense of teamwork and be aggressive in identifying and pursuing different opportunities.
Leadership and vision, perseverance, self-confidence and optimism were other marks of a successful entrepreneur, he said.
“Every entrepreneur should stay foolish and hungry,” Chow said. “Staying foolish means you must be like a student who is forced to study, and staying hungry means being eager to learn all the time.”
Copyright © 2008, Bangkok Post, Thailand
Distributed by McClatchy-Tribune Information Services.