Create Your Future and Ascend to Greatness

Leaders must be proactive in creating a better future that can put the enterprise on a more predictable path to ultimately climb the summit of elite.

Elite companies thrive and endure because they excel at creating a better future. So, how do companies create a better future and ultimately become elite? What’s their secret formula for creating such an extraordinary company? These questions are answered in my new book, Ascend to Greatness: How to Build an Enduring Elite Company. The idea for my book emanated from my lifelong quest to answer the Holy Grail question in business, “What specifically makes a company elite and, importantly, how do you build and sustain such an exceptional organization?” I believe remarkable companies are built and sustained by following the elite enterprise model that is unveiled in the book. 

Ascend to Greatness charts a course that takes the reader on a step-by-step journey focused on metaphorically climbing the ultimate summit, where the air is thin and where only the elite can successfully climb. In today’s turbulent and uncertain business world, it is vital that leaders be proactive in shaping a future with a more positive outcome. As Peter Drucker said, “The best way to predict the future is to create it.”

Three Foundational Pillars of Business

The elite enterprise model is built on the three foundational pillars of business—leadership, strategy, and execution—all impelled by seventeen principles. For a company to climb the summit and become elite, it must first get the right leadership team in place. Once an elite team is built, the company must develop a brilliant strategy. The strategy must then be superbly executed. Yet, getting all the foundational pillars and core principles right—at an elite level—is no easy task. 

If you closely examine elite companies that have endured, you will find—without exception—that they are excellent at all three foundational pillars. On the other hand, companies that have either fallen or have never reached the summit of elite, you will likely find that they have not performed well on some or even all of the pillars. 

Why Do So Many Companies Miss the Future?

Companies that fail to create their future do so at their own peril. The inability to properly create the future can have severe adverse consequences. The evidence is just too compelling to ignore. Let’s examine one key data point that shows what can possibly happen to companies that are unable to create a brighter future. 

If you examine the history of the Fortune 500 list (1955 to 2021), you will probably be shocked to learn that nearly 90 percent of the company names on the 1955 list don’t appear in the 2021 list. Such statistics should alarm all leaders. Obviously, over this period, some companies merged, restructured, and some even disappeared completely. This is normal in a dynamic and highly-competitive marketplace. However, I would argue that a nearly 90 percent disappearance rate is excessive and perhaps points to other reasons for the failure of an unknown number of enterprises. I suspect that some leadership teams were unable to see the future. This idea was captured perfectly by the cofounder of Google Larry Page when he stated, “The main thing that has caused companies to fail, in my view, is that they missed the future.”

Of course, without a proper study being done, it is impossible to draw any definitive conclusions for the excessively high disappearance rate. I suspect that an undefined percentage of companies disappeared primarily for the reason stated by Mr. Page. Missing the future can mean many things. I believe that the demise of companies can usually be narrowed down to one or more of the following: loss of discipline, outsized hubris, complacency, not enough of the right people in the right positions, and inadequate lifelines to weather unexpected storms. 

Elite Leaders Build Great Teams. Elite Teams Build Great Companies

So, what is the antidote to counter the illness of missing the future that has afflicted so many enterprises in the past? The answer is actually simple, it’s all about the leadership team making the right choice that they want to create a better future. Leaders must first decide that they want to ultimately ascend the summit and become an elite enterprise. Once this fateful decision is made, elite leaders can commence their journey by first building great teams. Elite teams then build great companies. 

Seventeen Core Principles Drive the Foundational Pillars

The three foundational pillars of leadership, strategy, and execution are underpinned by seventeen core principles. These proven principles—along with key metrics and mechanisms—are the drivers of excellence. There are six principles under leadership, six under strategy, and five under execution.  

Leadership. Leadership success is all about having the right people. I call this people excellence. Without enough of the right people occupying the right positions, an organization is destined to fail. Since people excellence is so crucial to becoming elite, I have segmented this vital element into four core principles. 

These four principles are all interrelated to building an elite leadership team. People excellence begins with each leader needing to possess five essential leadership characteristics that are consistently manifested at an elite level. People excellence is then followed by the need to properly identify the elite teams that will lead the company, and ensure that the right people are in the right positions. The remaining two principles under people excellence is the need to excel at talent acquisition and at talent management and leadership development, which includes succession planning. 

The foundational pillar of leadership also includes the need for a distinctive culture and creating a learning enterprise. Since culture is the cornerstone of enduring greatness, it should be at the top of the list for all leaders. Learning is critical to developing talent and for ensuring that constructive lessons are learned from both mistakes and successes. 

Strategy. Strategy begins with the principle of purpose, values, and vision. Strategy is then simply how an organization is going to successfully realize its stated vision, guided by its purpose, while strictly adhering to its core values. 

For a company to achieve its vision, it needs to have an innovative business model. The business model is segmented into two separate core principles, the unique practices of the company and its organizational structure. The unique practices are the specific activities on how a company will differentiate itself in the marketplace. These activities provide unambiguous guidance to everyone in the organization on what to do and what not to do. The organizational structure is then designed to execute those elements in the most effective and efficient way possible. 

Visionary leaders consistently focus on building an enduring elite company. A crucial principle that is needed for accomplishing this objective is the building of lifelines. Lifelines are utterly indispensable. They not only protect a company against adverse turbulent events but they also help build exceptional capabilities. I believe that there are seven essential lifelines that must be built for a company to withstand any turbulence.

The other two remaining principles of innovation and technology and a high-performance plan are driving forces that enable and accelerate the execution of the vision statement. Innovation and technology need to permeate the organization in all areas so that the company does not lose its way. Innovation is a strong incubator of ideas for new products and services. While technology can provide the enterprise with a competitive advantage in the marketplace. 

A high-performance plan, which is more commonly known as the strategic plan, consolidates and summarizes all the key breakthrough objectives of the enterprise in both quantitative and qualitative terms over a stated time span. Each time frame is then used as a building block to ultimately reach the summit, that is, to realize the vision of the company.  

Execution. The third foundational pillar is execution. Execution excellence begins with the core principle of disciplined execution. Disciplined execution must be driven by an integrated management system that has its grounding in continuous improvement. Every process and every daily activity that occurs throughout the enterprise in delivering its products and services, hiring and developing people, and building exceptional capabilities requires discipline and a mindset of continuous improvement. 

The next principle is a growth engine. The equity markets truly value organic and inorganic growth. That’s because growth is widely viewed as the lifeblood of an organization. Disciplined growth is one of the most difficult challenges that all leaders face. Without discipline, an enterprise at some point will likely stumble by making some bad investment decisions, which cumulatively can have a significant adverse effect on the performance of the company. 

The remaining three principles under execution include commercial, operational, and administrative excellence. Commercial excellence is inextricably linked to the principle of growth engine. Commercial excellence includes creating innovative new products, possessing strong contract negotiation skills, implementing successful pricing strategies, delivering an extraordinary customer experience, building strong brand loyalty, and optimizing sales channels. Operational excellence includes enhancing the supply chain, delivering a superior product, possessing strong technical and engineering capabilities, standardizing processes, and managing inventory effectively. And, administrative excellence includes maintaining a nimble governance framework, establishing an efficient global shares services center, and managing risks well.

Metrics and Mechanisms Are Indispensable

Metrics and mechanisms need to drive the three foundational pillars and the underpinning seventeen core principles. It’s impossible to build an enduring elite company without the proper metrics and mechanisms. Metrics are well understood by everyone. What’s important is to select the ones that can measure what’s truly critical to the company. Mechanisms, however, are another matter. My experience has shown that some CEOs don’t utilize mechanisms as frequently as perhaps they should. Enterprises that underutilize mechanisms are likely losing out on some important benefits to culture and performance.

The Journey Never Ends

Leaders need to understand that the journey to climb the summit never ends! To achieve elite status, an organization must climb a multitude of summits over a long horizon. Each summit must equate to the bold vision of the company. As each vision is realized over the stated time frame, a new vision is established. This cycle is then repeated. 

Written by Salvatore D. Fazzolari.

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