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Wednesday, June 18, 2008

Six Secrets of Breakthrough Companies

Author Keith McFarland, a former Inc. 500 CEO, has spent years researching thousands of private companies and interviewing their leaders -- in an attempt to identify the secrets of "breaking through." Here are six of his most surprising findings.

  1. Happy employees make successful companies. How employees feel about working in a place is a significant driver of success. A key discovery, driven home in our visits to one breakthrough company after another, was that the task of building a great place to work wasn't delegated to the human resources department alone. The top people in the company thought about it every day.
  2. Money doesn't solve everything. You don't always need other people's money. We've all heard the professional investor's elevator pitch, "Sure, you can grow your business, but you can grow it faster with our money." We were shocked by the fact that not one of nine breakthrough companies was funded by venture capital in their start-up years.
  3. Many paths lead to success. It's not about where (or even whether) you went to school. The diversity of the people who established and/or are running the nine breakthrough companies is simply astounding.
  4. Talent is contagious. Don't look for extraordinary people; build a place where ordinary people can do extraordinary things. While they certainly obsessed about each individual hiring decision, breakthrough companies also focused on creating systems that helped their people grow along with the business.
  5. Change matters. Sticking to the knitting won't always get you there. Just as the breakthrough companies ignored the so-called experts when it came to the prospects for their industry, they also kept redefining their businesses.
  6. Breakthrough companies are found in unexpected places. The most interesting companies may not operate in the markets that Wall Street and the business press consider interesting or "cool." Many of the breakthrough companies began in market segments experts considered unattractive at the time.

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