The famous photo of early Jeff Bezos is somewhat comical to look back on today. Bezos, working at his (very bulky) computer, is next to a sign with “amazon.com,” crudely spray-painted across it it. Given Amazon’s unbelievable success in becoming the e-commerce platform to rise from the ashes of the early 2000s tech-bubble, such a dingy looking office is a far-cry from the company of today.

A million articles are written on Amazon’s success each year. Same with Apple, Nike, and a host of other unforgettable icons of the business world. Each article points to a different factor as the reason for such success. “It was Bezos!” “It was the business model!” “It was luck!”

In fact, it’s more reasonable to say that Amazon’s success was a product of everything. The right leader, the right management, a solid business model, efficient marketing, and beyond. Like a snowball, each part builds on the last. A solid leader attracted the right talent, the right talent created a great business model, the business model outlined the right marketing which supported great sales systems, which ultimately delivered on the insanely efficient operations that has made Amazon a world class brand.

So what happens when the sun comes out and the snowball stops growing? A perfect example of this is Pets.com, arguably one of the most well-known “tech-bubble” failures of the turn of the century. Their failure is explained very well by Brainmates.com: “Pets.com did no market research before launching. They made a lot of big assumptions: that pet owners would want to buy online and knew how to (remember, this was 1998); that selling pet products alone was compelling enough.” [1] Here, the snowball stopped at the business model.

The snowball model explains why good companies are able to use their talented founder and founding team to create long term growth.

The Model

 

Companies begin on the mid-line. Teams with the right people in the right positions create their snowball by moving right one space, towards a championship team. Companies with the wrong talent, move left, towards the vortex of failure. From there, companies move left or right, (depending on their strength or weakness in an area), in an exponential fashion. Each move builds on the last, accelerating a company’s elite-performance, or elite-failure. If the company finishes on the vortex side of the graph, they need to make changes. If they finish on the champion’s side, they are headed for elite performance.

Talent is the backbone of the model, starting a company down one drastic pathway or another.

What happens if a company has, say, the wrong talent, but a great business model, marketing strategy, and operational effectiveness? They may still end up on the championship side, but not finish as well as they could have with the right talent.

Take Uber for example. When they began, they had the wrong people on their management team. Even though they had a pretty solid business plan, great marketing, and an operational system that worked, they lagged behind and fell-prey to new companies like Lyft. How many points higher, (and how much more revenue could they have generated), would they be with the right talent?

Now when completing this on your own company, there are a few benchmarks you can use to determine whether your team is championship, or vortex, bound.

Talent – The backbone of success, talent can be determined by getting to know your employees at a DNA-level. By using analytics-backed indicators like The Predictive Index, you can have a dashboard to determine if each employee is naturally fit for their job.

Business Model – Experienced consultants with industry experience are your best indicator of whether a business model can succeed. Try to use one with current experience; what worked last year may not work this year. Based on sales figures, you can generally understand whether or not your company has succeeded in this area.

Marketing – By using sales-linked Marketing dashboards, you can see whether marketing efforts are actually creating sales and awareness.

Operational Effectiveness – Circling back, talent indicators are often your best measure of operational effectiveness. At the end of the day, operations don’t exist without people. The circle continues.

The Predictive Index

Do you want to see how big your company snowball can get? The Predictive Index, delivered by Certified Partner Predictive Success, gives managers analytics-backed insights into their employees. The dashboard’s self and self-concept graphs allows managers a clear look into whether they have the right personalities doing the right job.

See if you have a championship candidate for your next employee with a FREE hire on us. Contact Lauren Danes at ldanes@predictivesuccess.com, or 905-4309788×105.

Sources

[1] “Pets.com – a Classic Example of Product Development Failure.” Brainmates, June 7, 2016. https://brainmates.com.au/brainrants/pets-com-a-classic-example-of-product-development-failure/.