People looking for the next big idea for their business should instead consider coming up with a series of successful smaller ideas that can be repeated. That is the finding of a new book written by Chris Zook and Chris Allen, co-heads of management at consulting firm Bain & Company, which found that businesses that ditched the big idea for a repeatable one were five times more likely to succeed.
Continue Reading Below
Repeatable business ideas and a repeatable model are the secrets to the success of many of the world's top companies such as Apple, Nike, Unilever and Berkshire Hathaway, according to the authors. The ability to repeat successful ideas has allowed those companies and others that are top earners to capture 85 percent of the global market from 2000 until 2010.
According to the authors of " Repeatability: Build Enduring Businesses for a World of Constant Change" (Harvard Business Review Press, 2012), the reason for this success comes from that fact that businesses are able to repeat simpler measures that brought them success in the first place rather than having ideas become a "one and done" situation.
"The most successful growth strategies consist of a business model that allows the company’s greatest successes to be tailored to new areas with the positive result repeated," the authors said.
Although these practices are associated with many large and successful businesses in the book, the principles translate to businesses of any size. Businesses looking to emulate the success of Apple and Berkshire Hathaway can follow three steps, according to the authors.
- A Well-Differentiated Core — The authors found that 93 percent of the of the top 20 performing companies had strong differentiation in their core, which ranged from low cost to differentiated products or services.
- Clear “Non-Negotiables"— Business models need to be able to be repeated easily by all members of the company. The authors found that "non-negotiables form the 'commander’s intent' of business, which acts to reduce the distance between the CEO and the front lines."
- Closed-Loop Learning— Businesses must also be able to adapt quickly to changes as they arrive. The authors said that "business history is littered with great business models — like Kodak, General Motors, Xerox and Sony — that eventually succumbed to their 'arrested adaptation' and not being able to change fast enough."
Reach BusinessNewsDaily staff writer David Mielach at Dmielach@techmedianetwork.com. Follow him on Twitter @D_M89.
Copyright 2012 BusinessNewsDaily, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Read more from BusinessNewsDaily:
- The 10 Scariest Business Blunders of the Year (So Far)
- The 10 Best Business Plan Software
- 10 Great Business Ideas for 2012
Continue Reading Below