What Really Works: The 4 2 Formula for Sustained Business Success

From Publishers Weekly
Managers burned too often by following the latest highly touted formula for business success will welcome this cogent summary of a wide-ranging, systematic study about fundamental practices associated with long-term corporate health. Joyce, a Dartmouth business professor, and his collaborators surveyed hundreds of companies from 1986 to 1996 to correlate superior corporate performance with the companies' adherence to 200 commonly used practices. Companies they identify as winners consistently followed successful practices in all four of the primary areas (strategy, execution, culture and structure) and any two secondary areas (talent, leadership, innovation, and mergers and partnerships). The key to long-term success, they argue, is implementing effective programs in the six areas simultaneously. After analyzing the data, Joyce and his colleagues concluded that a company following this "4+2" formula over the 1986-1996 period had a better than 90% chance of being a winner. Anecdotes from the successful companies will interest general business readers, but the contrast with the experience of companies that stumbled should be particularly instructive. Replete with incisive discussions of various companies' approaches for each of the four primary and four secondary areas of practice, the book also offers summaries of the study results in table format. For managers who wonder how anybody can keep six areas of practice fine-tuned at the same time, the authors agree it may be a challenge, but point to their wealth of success stories to show it isn't impossible.Copyright 2003 Reed Business Information, Inc.


Book Description

Why do some organizations consistently outperform their competitors?

What do managers at the best companies know -- and do -- to keep their organizations on top?

When it comes to implementing management practices that can propel a company to lasting success . . .

WHAT REALLY WORKS?

With hundreds of well-known management practices and prescriptions promoted by consultants and available to businesses, which are really effective and contribute to the growth and continued success of a company? Which do little or nothing?

In their groundbreaking new book, What Really Works, William Joyce, Nitin Nohria, and Bruce Roberson put forth findings that will revolutionize the art and practice of management.

Based on the Evergreen Project, a massive five-year study in which consultants and business school professors at top universities around the country analyzed ten years of data on 160 companies and more than 200 management practices, the authors discovered that all successful companies simultaneously master six specific management practices.

The 4+2 formula divides the practices into four primary practices, all of which must be followed, in the areas of strategy execution culture organization

and any two of four secondary practices involving talent of employees leadership and governance innovation mergers and partnerships.

The authors also reveal which of the many management nostrums available do not contribute significantly to a company's performance. Their findings on quality programs and information technology, for example, will shock their legions of adherents.

In What Really Works, the authors present their stunning findings through lively case studies focusing on companies they've designated Winners, Climbers, Tumblers, or Losers, depending on their performances over the ten-year period studied.

What Really Works singles out the areas that are truly important for management to focus on to achieve success. Equally important, it shows readers where not to waste their efforts.

FROM THE PUBLISHER

  Why do some organizations consistently outperform their competitors? What do managers at the best companies know -- and do -- to keep their organizations on top? When it comes to implementing management practices that can propel a company to lasting success . . . WHAT REALLY WORKS? With hundreds of well-known management practices and prescriptions promoted by consultants and available to businesses, which are really effective and contribute to the growth and continued success of a company? Which do little or nothing? In their groundbreaking new book, What Really Works, William Joyce, Nitin Nohria, and Bruce Roberson put forth findings that will revolutionize the art and practice of management. Based on the Evergreen Project, a massive five-year study in which consultants and business school professors at top universities around the country analyzed ten years of data on 160 companies and more than 200 management practices, the authors discovered that all successful companies simultaneously master six specific management practices. The 4+2 formula divides the practices into four primary practices, all of which must be followed, in the areas of ￯﾿ﾽ        strategy ￯﾿ﾽ        execution ￯﾿ﾽ        culture ￯﾿ﾽ        organization and any two of four secondary practices involving ￯﾿ﾽ        talent of employees ￯﾿ﾽ        leadership and governance ￯﾿ﾽ        innovation ￯﾿ﾽ        mergers and partnerships. The authors also reveal which of the many management nostrums available do not contribute significantly to a company's performance. Their findings on quality programs and information technology, for example, will shock their legions of adherents. In What Really Works, the authors present their stunning findings through lively case studies focusing on companies they've designated Winners, Climbers, Tumblers, or Losers, depending on their performances over the ten-year period studied. What Really Works singles out the areas that are truly important for management to focus on to achieve success. Equally important, it shows readers where not to waste their efforts. With these and other findings revealed, the authors have at last uncovered the real keys to true long-term business success and What Really Works

FROM THE CRITICS

Publishers Weekly

Managers burned too often by following the latest highly touted formula for business success will welcome this cogent summary of a wide-ranging, systematic study about fundamental practices associated with long-term corporate health. Joyce, a Dartmouth business professor, and his collaborators surveyed hundreds of companies from 1986 to 1996 to correlate superior corporate performance with the companies' adherence to 200 commonly used practices. Companies they identify as winners consistently followed successful practices in all four of the primary areas (strategy, execution, culture and structure) and any two secondary areas (talent, leadership, innovation, and mergers and partnerships). The key to long-term success, they argue, is implementing effective programs in the six areas simultaneously. After analyzing the data, Joyce and his colleagues concluded that a company following this "4+2" formula over the 1986-1996 period had a better than 90% chance of being a winner. Anecdotes from the successful companies will interest general business readers, but the contrast with the experience of companies that stumbled should be particularly instructive. Replete with incisive discussions of various companies' approaches for each of the four primary and four secondary areas of practice, the book also offers summaries of the study results in table format. For managers who wonder how anybody can keep six areas of practice fine-tuned at the same time, the authors agree it may be a challenge, but point to their wealth of success stories to show it isn't impossible. Agent, Helen Rees. (May 6) Forecast: This is Harper's lead business book for summer; the publisher is comparing it to Good to Great, which was published in 2001 and is still on business bestseller lists. If Joyce can garner praise from business bigwigs and get attention from a few CEOs, his book may catch on among corporate types. Copyright 2003 Reed Business Information.

Soundview Executive Book Summaries

Business is full of mysteries, but none greater than this: What really works? Today's managers realize all too painfully that many, many things matter in achieving business success, but few of them can tell you much more than what worked for them. They spend years guessing at what really matters in business, and guessing wrong - they pursue fads and follies without getting to the heart of the fundamental practices that create business success.

The strategy and business administration experts who authored What Really Works conducted a 10-year study that turned 50 academics and business consultants loose on dozens of companies, looking for the answer to that elusive mystery - What really works? From that study emerged the 4+2 Theory, which provides the correct combination of primary and secondary management practices that form the crucial practices that achieve lasting business success.

According to the authors, there are eight management practices - four primary and four secondary - that directly correlate with superior corporate performance, as measured by total return to shareholders (TRS). Winning companies achieve excellence in all four of the primary practices, plus two of the secondary practices - hence, the 4+2 formula.

The Four Primary Management Practices
The authors explain that the four primary management practices are strategy, execution, culture and structure. Strategy. Managers must devise and maintain a clearly stated, focused strategy. Whatever your strategy - whether it is low prices, innovative products, or some other initiative - the authors explain that it will work only if it is sharply defined, clearly communicated, and effectively understood by employees, customers, partners and investors. Execution. According to the authors, companies must develop and maintain flawless operational execution. You might not always delight your customers, the authors write, but you must make sure you never disappoint them. Winners consistently meet the expectations of their customers by delivering on their value proposition, slashing operational costs, and increasing productivity consistently, year in and year out. Culture. Organizations must develop and maintain a performance-oriented culture. It is the setting of performance standards and consistent achievement of those standards that make the difference. How one deals with poor performers, the authors write, is also a key factor. Structure. Companies must build and maintain a fast, flexible and flat organization. The authors explain that simpler and faster are the best goals for all reorganization efforts.

Any combination of two secondary management practices (talent, leadership, innovation, mergers/partnerships), when combined with the four primary management practices, can make a company a winner, the authors write.