Does it Take a First-Class Idea to Start a Business? Plus Answers to 4 More Questions About Business Success

Quick question: Whose fault when a business fails?

It best to start re-examining few facts known for business success and failure. Not on the authority of age and prestige. Rather on the authority of observation and experiment.

In 1988 to March 14, 1994. A group of scientists set out to answer one question only.

What traits makes lasting companies last?

The likes of  Disney, Motorola, and Wal-Mart.

During the study. The researchers observed a trend of things that shattered several misconceptions. About business success and failure. Here are five which matter most.

1. Does it take a first-class idea to start a business?

On August 23, 1937, Bill Hewlett and Dave Packard. Graduate engineers with no business experience. Met to discuss a founding of a new company.

With no idea what the company will make.

They decided they wanted to start a business with each other. In the broadly defined field of electronic engineering.

They started moving forward. Trying anything that might get them out of the garage and pay the bills.

With about $500 in capital, trying whatever someone thought they might be able to do.

In fact, the company stumbled for about a year before it got its first big sale. Eight audio oscilloscopes to Walt Disney for work on the movie Fantasia.

2. Do you need to be great and charismatic visionary leader?

What if high-profile charismatic leadership is just not your style?

Consider William McKnight? Do you know who he is? Can you describe his leadership style? Does he stand out in your mind as one of the great business leaders of the twentieth century?

His biographer described him as:

  • A good listener
  • Humble
  • Modest
  • Unobtrusive
  • Soft-spoken
  • Thoughtful
  • Serious

The company McKnight guided for fifty-two years. From 1914 to 1966 as a general manager, chief executive, and chairman. Earned fame and admiration of business people around the world. It carries the revered name Minnesota, Mining, and Manufacturing Company (or 3M for short).

McKnight is not the only significant chief executive in the history to break the archetypal model of the charismatic visionary leader.

Masaru Ibuka founder of Sony had a reputation for being reserved, thoughtful, and introspective.

3. Do you need to maximize profits to be successful in business?

In the early 1980s, Ford Motor Company found itself reeling, bleeding red ink. Wounds inflicted during the repeated thrashing it took from Japanese competitors.

Suffering from a $3.3 billion net loss (43 percent of its net worth) in three years.

What should they do? What should be their highest priorities?

According to Robert Schook who researched and wrote a book on the 1980s Ford turnaround. It did something unusual for a team facing such a tremendous crisis. It paused to clarify its guiding principles.

Something saying, this is who we are; this is what we stand for; this is what we are all about.

In other words. They understood Profit is like oxygen, food, water, and blood for the body. They are not the point of life, but without them, there is no life.

4. Do you need to play it safe for your company to endure?

In 1965, Boeing made one of the boldest moves in business history.

The decision to go forward with the 747 jumbo jet, a decision that nearly killed the company.

During the 747 development. A Boeing visitor commented, “You know, Mr. Allen, [Boeing has] a lot riding on that plane. What would you do if the first airplane crashed on takeoff?”

“After a long pause, Allen replied, “I’d rather talk about something pleasant—like a nuclear war.”

Boeing’s engineers made a significant breakthrough—the 727—largely because they were given no other choice.

Boeing became irreversibly committed to the 747—financially, psychologically and publicly.

5. Do you need to make your moves by brilliant, complex and strategic planning to have a successful business?

Post-it notes present just one example that you often get to where you’re going by stumbling. You can only stumble if you’re moving.

Post-it inventor Art Fry described: “One day in 1974, while I was singing in church choir, I had one of those creative moments.”

“To make it easier to find the songs we were going to sing at each Sunday’s service. I used to mark the places with little slips of paper. But they would flutter out at just the wrong time, leaving me frantic.”

I thought, “Gee, if I had a little adhesive on these bookmarks, that would be just the ticket,” so I decided to check into . . . Spence Silver’s adhesive.”

“The key to the Post-it adhesive was doing the experiment.”

“If I had factored it out beforehand, and thought about it, I wouldn’t have done the experiment. If I had seriously cracked the books and gone through the literature, I would have stopped.” “The literature was full of examples that said you couldn’t do this.”

Back to you

Growth is a gambler’s game.

You try something, and it works, you keep it. It doesn’t work; you fix it. Or try something else.

Try it.

A fault is with one who stops trying.