Some companies succeed and others fail. There are plenty of business books about how to achieve business success, but most of them are based on the author’s personal observations and consulting experience. That is perfectly valid and useful, but there’s something more.
Geoffrey James shows that there are some scientific principles behind business success, and you can also apply them to yourself.
Five principles of success backed by science
1. Successful companies tell stories
We live in the information age, but human beings are genetically identical to the humans who lived in the Stone Age. Back then, what set humans apart from apes was the part of the brain called the cerebral cortex, which in humans is huge compared with other mammals.
An important element of that enormous neocortex is what neuroscientists call “mirror neurons”: brain cells that fire both when we do something ourselves and when we watch someone else doing the same thing. When a storyteller tells an emotional story, those emotions are mirrored in the listener’s mirror neurons.
According to Brian Sturm of the University of North Carolina, swapping related stories brings people closer and builds trust, making them part of the same team and therefore suitable as business partners.
While stories connect people emotionally, people quickly forget facts presented outside the context of a story. In fact, most people forget 90 percent of the information presented to them within a relatively short time.
So although you’ll need facts and information to verify and support your stories, your success depends on the stories you tell, because the stories you tell are how customers and investors decide what it means to do business with you.
A practical example of how stories are useful in business: “A pen is worth nothing, but that same pen can be priceless if Abraham Lincoln used it to sign several peace treaties.”
2. Successful employees work smarter, not longer
Many companies encourage their staff to work long hours, in the belief that having fewer employees working more hours increases profits. That belief, however, has no basis.
According to studies carried out by the Ford Motor Company at the beginning of the last century, the sweet spot for worker productivity is around 40 hours a week. Adding overtime creates only a small increase in productivity, which turns negative within three or four weeks.
See also: Two of the most brilliant business strategies in history: IBM and Ford
The problem is that overworked people start making avoidable mistakes, which then take more time to fix. The solution, of course, is to “work smarter”. But what does that mean?
It certainly doesn’t mean adding more technology: there’s an obvious correlation between the amount of technology in business and the lengthening of the working day. Technology makes it easier to work ever longer hours.
The only real way to work smarter is to spend your time on the things that matter rather than the things that don’t. This is a practical application of the Pareto principle, the economic law by which 80 percent of your results come from 20 percent of your actions.
In business, the Pareto principle is best known as the rule of thumb that “80 percent of your sales come from 20 percent of your customers”, or sometimes “80 percent of your sales come from 20 percent of your sales force”.
But Pareto patterns apply to almost all human activity, which means that in most companies only 20 percent of the effort spent generates 80 percent of the results.
So you and your company can become more successful by doing more of the 20 percent that really matters and less of the 80 percent that doesn’t.
See also: 9 traits today’s business owners need to succeed
3. Successful companies hire team members, not superstars
Conventional business wisdom says an organisation will succeed more easily and quickly if it hires a few of the best possible performers: in other words, the biggest stars in their profession.
That is the philosophy behind concepts such as stack ranking, in which “a workforce is ranked according to the individual productivity of its members”, and best practices, in which you try to hire the candidates who most resemble your best current employees.
Although all this sounds reasonable, it doesn’t work in practice. In fact, superstars tend to succeed at the expense of others, according to statistical analyses of a database of 400,000 salespeople and 700 sales forces carried out by Chally Worldwide.
As Chally’s CEO Howard Stevens explains, in practice top performers often rely heavily on internal resources and connections that are meant to be available to the whole sales staff, so as not to harm other parts of the business.
Business success, however, is always a team effort, which means successful companies need to hire people who can set their egos aside and help everyone become more effective and efficient.
According to a recent study carried out at MIT and published in the Harvard Business Review, the most effective teams are those in which members talk and listen in roughly equal measure, shared evenly among everyone, while lower-performing teams have dominant members, and members either talk or listen but don’t do both.
Those latter behaviours are more typical of superstars than of team players.
In other words, your company will be more successful if you hire the best workers who work together as a team, rather than a team of superstars who succeed at everyone else’s expense.
4. Successful companies make honesty their best policy
In recent decades, many companies have tended to see business ethics as an expense. The assumption is that cheating is more profitable than playing fair, as long as you don’t get caught.
However, groundbreaking research by business professor and author Robert B. Cialdini indicates that deception generates huge hidden costs, even when leaders think they’re getting away with it.
According to Cialdini, employees who know their company is cheating fall into two categories: those who feel a conflict of values and want to leave, and those who feel perfectly fine with it.
Most of the best employees fall into the first category, which creates staff turnover, and turnover is expensive for the company. Because turnover costs can easily be two or three times the cost of an employee, the result of cheating is a lower profit margin.
Far worse are the employees who are fine with deception at the corporate level, since they tend to be good at deception on a personal level too, which explains, among other things, why there are so many crooks in the world of finance.
In other words, rather than an unnecessary expense, building an ethical corporate culture avoids unnecessary expenses.
5. Successful companies try to reduce employee stress
There’s no easier way to say it: science says stress is the number one enemy of success. According to the American Psychological Association, stress triggers a whole range of health problems.
They include headaches, muscle tension and pain, chest pain, fatigue, upset stomach, insomnia, anxiety, restlessness, lack of motivation, poor concentration, irritability, depression, eating problems, addiction and social isolation.
Health problems of this kind lead not only to absenteeism but also to presenteeism: staff coming to work even when they have a contagious illness.
In business, the main sources of stress are the feeling that there’s too much work to do, and fear based on the belief that the company will punish failure.
There are, of course, many companies that run a fear-based culture. But these companies don’t relieve stress on a regular basis, which leaves their workers burned out.
Because of turnover costs, though, a more effective approach is to create a less stressful work environment by implementing principles 1 to 4.
Not every successful company embodies all five principles, but if we read some of the many books on business success, we’ll find that every successful company implements at least three or four of them.
Further reading
Featured image: Detroit Publishing Company, Public domain, via Wikimedia Commons.
