It’s flu season up here in the Northland, so I’ve been thinking about how to keep my household healthy. That includes, of course, lots of hand washing, bundling up when we go outside and staying away from people who are sick. The last one isn’t always so easy, which is when you need to count on your own body’s immune system to fight the bugs.
Which, of course, also relates to corporate strategy and organizational sustainability. Really? Actually, yes! Read on.
Here’s a pop quiz: How is Great Clips’ corporate strategy like a healthy body’s immune system?
Answer? They both operate on the principles of prudence, diversity and adaption.
I came across this novel way of looking at organizational sustainability when I happened upon a Ted Talk by business strategist Martin Reeves—director of the BCG Henderson Institute, a think tank for developing cutting edge ideas in strategy and business management—titled “How to Build a Business that Lasts 100 Years.” Reaching that goal isn’t easy.
Reeves, author of Your Strategy Needs a Strategy, says the average U.S. (publicly held) company can expect a life span of just 30 years. The probability of a business failing within 5 years is 32%—one in three.
Great Clips has certainly beaten those odds. The company has been around since 1982—almost 35 years! Both the corporate organization and the network of independent franchise salon owners are going strong. Great Clips is a billion-dollar corporation. It is into its 12th year of consecutive same-salon quarterly revenue growth and the 4,000th salon in the system just opened last summer. Great Clips stylists are on track to provide 100 million haircuts this year.
How do we do it? When I saw Reeves’s Ted Talk, I recognized a lot of similarities between the Great Clips approach and Reeves’s analogy of an immune system that supports a healthy body.
6 strategies for flourishing in a changing world
Here are the six characteristics of the body’s immune system that Reeves says can—should—be applied to business, whether small or large:
- redundancy: creating system backups to act as a buffer against the unexpected
- diversity: using a variety of weapons and coping mechanisms
- modular design: designing a progression of defense systems so if one fails, another can take over
- adaptivity: developing targeted approaches to fight new threats or circumstances
- vigilance: staying alert and on guard to detect and react to even the tiniest threats
- embeddedness: operating multiple systems, working in harmony with each other as part of the larger organism
Maybe this system doesn’t seem like the most efficient use of the body’s resources, Reeves says. Maybe the redundancies and diversity could be cut back for more robust growth in the short term. “Unfortunately, there’s one very tiny problem with that approach and that is … you or I would probably die within one week of the next winter, when we encountered a new strain of the influenza virus.”
In short, a healthy body—or business—is vigilant in scanning for and adapting to change. This strategy goes a long way toward guaranteeing long life—100 years, anyone?—for your human body and your business.
Wishing each of you the “prudence, diversity and adaption” of a successful business (and a healthy immune system!). Want to know more about what it’s like to be a Great Clips franchisee? Send me a note or give me a call. I’d love to talk with you.