Book Review: What Really Works: The 4+2 Formula for Sustained Success

Book Review: What Really Works: The 4+2 Formula for Sustained Business Success by William Joyce and Nitin Nohria (Harper Business, 2003,ISBN 0-06-051278-4)
by Ted Isensee

The book is the result of an exhaustive study by these authors in concert with many other researchers and business school professors from top universities.

The study asked the question: What Really Works in business? The study looked at about 200 different business practices and found that there were only 8 primary strategies that were highly related to distinguishing business winners from business losers. Of these successful strategies, 4 are primary — every winning company did well in all four. The other 4 strategies were considered secondary, but the study found that companies had to do well in at least 2 of the 4 secondary strategies in order to become a winner.

Thus, the study says you need to take a "4 + 2" approach: do well in all the 4 primary strategies and do well in at least 2 of the 4 secondary strategies.

Here is a summary of the strategies:

The 4 Primary Strategies:

Make Your Strategy Clear and Focused

Build a strategy around a clear values proposition for the customer
Develop strategy from the outside in. Base it upon what your customers, partners and investors have to say — and how they behave.
Maintain antennae that allow you to fine-tune your strategy to changes in the marketplace.
Clearly communicate your strategy within the organization among customers and other external stakeholders.
Keep growing your core business; beware the unfamiliar.

Execute Flawlessly

Deliver products and services that consistently meet customer expectations.
Empower the front lines to respond to customer needs.
Constantly strive to improve productivity and eliminate all form of excess and waste.

Build a Performance-Based Culture

Inspire all to do their best.
Reward achievement with praise and pay-for-performance, but keep raising the performance bar.
Create a work environment that is challenging, satisfying, and fun.
Establish and abide by clear company values.

Make Your Organization Fast and Flat

Eliminate redundant organizational layers and bureaucratic structures and behaviors. Simplify, simplify, simplify.
Promote cooperation and the exchange of information across the whole company.
Put your best people closest to the action and keep your frontline stars in place.

The 4 Secondary Strategies:

Make Talent Stick Around and Develop More

Fill mid- and high-level jobs with internal talent whenever possible.
Create and maintain top-of-the-line training and educational programs.
Design jobs that will intrigue and challenge your best performers.
Become personally involved in winning the war for talent.

Make Your Leaders Committed to Your Business

Inspire management to strengthen its relationships with people at all levels of the company.
Inspire management to hone its capacity to spot opportunities and problems early.
Appoint a board of directors whose members have a substantial financial stake in the company's success.
Closely link the pay of the leadership team to their performance.

Make Industry-Transforming Innovations

Introduce disruptive technologies and business models.
Exploit new and old technologies to design products and enhance operations.
Don't hesitate to cannibalize existing products.

Make Growth Happen with Mergers and Partnerships

Acquire new businesses that leverage existing customer relationships.
Enter new businesses that complement your company's existing strengths.
With a partner, move into new businesses that can use the partnerships' talents.
Develop a systematic capability to identify, screen, and close deals.

For every one of the above strategies and sub-strategies, there is a real world example in the book that helps explain how it can be implemented, and how it has worked.

I first heard of this book in a radio interview with one of the authors. I was immediately interested because of the huge amount of effort that went into determining, from among the myriad recommendations from so many supposed authorities in the world, exactly What Does Really Work in business. This study is the most exhaustive I have ever heard of on this topic. I have read through most of it at this point and highly recommend it. It does a great job of explaining the successful strategies with many real world examples. The book is not a detailed manual of how to implement the actual strategies, but it does tell you the strategies you should work on implementing in your own company, in your own way. By implication, it also tells you what NOT to waste your time working on. It's interesting to read in the book about the many strategies that do NOT correlate in any significant way with business success. Many sacred cows and holy oxen are thereby gored...

I think you will find the book a very useful and enlightening read, if you take the time to do that. Since I realize that is a significant amount of time for busy people to do, I present a summary below of the successful strategies. For most of the strategies, there are sub-strategies that I also detail. The appendix of the book contains a bibliography of sources to consider for help in actual implementation of the winning strategies.

As the study says, there is no magic bullet, just continuing work on making improvements in the areas that yield the most results. The key is to identify those areas, and to start and continue the process. The process never really ends but it can yield tremendous results if a company really engages in it...

Ted Isensee is a business coach in Houston, Texas. He and his associates help organizations select, develop, and keep talent. He can be reached at 713-271-2333, ext 1, or by email at .