Soft Work, Hard Results

by Jo Anne Nelson on October 25, 2012

I had the pleasure of hearing Rich Kaarlgard, the publisher of Forbes, speak last week at the Fall ACEC conference. He had a fascinating take on the current state of the economy and historical equivalents to where we are today, as well as what it takes to win in current market conditions.

While there have been a number of articles and discussions about how this recession is similar to the Great Depression, Rich says it’s most similar to that of the recession of ’74-75. During that time, we experienced similar economic challenges, as well as challenges in the political realm. Stocks fell a similar amount in value, Hanoi fell, Spiro Agnew and Richard Nixon resigned in disgrace. Unemployment rose to 11%, and the recovery was slow. We had a period of time, around six years, where it felt like we took three steps forward, then two and half steps back.

Rich says that right now, we have the most uneven or spiky economy he’s seen in his lifetime. Some companies and people are doing really well, and some are really struggling. The same thing happened in the ’74-75 recession, though the disparity between the highs and lows wasn’t as great.

During that recession, it was also a period of great opportunity. Why does he say that? Here are a few of the companies that were started during that time: FedEx, Southwest Airlines, Microsoft, and the most valuable company in the world today, Apple.

Why were these companies able to launch and be so successful during a time of such uncertainty? There were individuals—entrepreneurs—who looked at the market and the businesses of the time and saw better ways to produce and/or deliver specific products and services. Today, the same opportunities exist.

Individuals with a computer or mobile device, access to the internet and cloud, located anywhere in the world, can put ideas and products forward, compete on a global scale and have impact. What does it take? Reading the world, seeing what’s there and what’s missing, and putting ideas, products and services out there in a way that differentiates them from their competitors.

But to sustain that success, they need to focus on more than just getting their product or service to market. Rich spoke a lot about the hard and soft sides of running a business. The hard side—cost, supply chain, and particularly, speed to market—have to be there. But, these things can be easily analyzed and copied by competition. So those that are winning today are also focused on the soft side of the business.

While Rich defines the ‘soft stuff’ differently than we do, he’s right on target. You can imagine this is music to our ears!

When we launched Aperio International, we saw an opportunity to add measurable value by focusing exclusively on optimizing the soft side of the business equation—intangibles. Early on, when we talked about this at networking events and conferences, we were often met with blank stares. Many considered anything labeled intangible to largely be a waste of time. One CEO, responding to my response when asked what we do replied, “Intangibles? Then I don’t need your services. What we need are tangibles.”

Now, thirteen years later, there is general recognition that intangibles are the key differentiators that separate competitors in terms of performance.

To be sure, the hard stuff is essential. You’ve got to have it to be in business, and optimize it to succeed and sustain success.

That said, compelling products, services, effective operations, etc. fundamentally represent tickets to the playing field. The companies and individuals who build differentiating capabilities in key intangible drivers of revenue generation and value appreciation—talent, focus, collaboration, innovation, leadership and execution—set themselves apart and are most likely to build sustainable success. Those that continuously strive to optimize the contribution of intangibles have the greatest likelihood of consistently performing at peak.

Taking a systematic and progressive approach to building and optimizing the soft side of the business produces hard results. Check out a few of our case studies for some examples.

Fortunately, the understanding of the need for a focus on the soft side of the business equation has changed dramatically since we launched Aperio International. No longer seen as ‘fluff’, much of the business press, like Rich, now devote substantial attention and column inches to the soft side of business performance.

Where do you need to focus? Do you and your teams have the skills you need to collaborate seamlessly? To lead optimally today and tomorrow? To drive leadership and innovation through all levels of your organization? To execute efficiently and effectively?

Look at what you are currently doing well, and what you can do better. Build a plan to address the gap in skills required to optimize the soft side of the business. Doing so will lead to increasingly improved performance and sustainable success.

Why wait?

Jo Anne Nelson

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