The Leading Edge: Instant Success Takes Time

Dubai’s open economy still "serves as a model for its Gulf neighbours," BusinessWeek’s London bureau chief, Stanley Reed, argued in a recent issue of the magazine.

Yet Dubai World's recent debt proposal presents a classic case of the perils of speculation, even for a government-related property company like Nakheel.

This lesson can help leaders in any industry or country. In a global economy, surprises are the new normal. It’s dangerous to reach for the sky too fast without doing the painstaking groundwork necessary to be ready for anything.

My research shows that products, people, ideas and companies that appear to burst on to the scene and soar to the top are not always effective for very long. Some are temporary shooting stars that burn out quickly.

Companies or teams that sustain success often have long periods of preparation, rehearsal and trial-and-error experimentation before their towering achievements are visible. Instant success takes time. Do the slower work to build a strong foundation for growth, and you are more likely to stay at the top, even in difficult economies.

Consider Cemex, a Mexican cement company that in just a few years has become one of the largest in its industry. Its rapid rise since 2005 was the result of more than a decade of preparation. Slow and steady foundation-building readied Cemex for the challenges of doubling in size several times through large acquisitions. Years were spent testing, planning, refining models and building a strong culture that could be easily transmitted to new people.

Cemex first moved into neighbouring Latin American countries, learning how to add new people and facilities in familiar territories. Then it prepared for a larger acquisition in Spain by creating a set of "Cemex Way" principles and tools to smoothly integrate the Spanish company into the Cemex family. Next, in advance of its first US acquisition, Cemex spent many months creating a detailed "post-merger integration" process and training people in how to use it. This was the foundation for effectiveness when it was time to buy the US company.

Following that successful addition, Cemex prepared to double its size through a Europe-wide acquisition stretching from the UK to Croatia. Cemex enlarged its foundation by hiring and training more people than were immediately needed; this gave it experienced teams that were ready to ensure that the new global Cemex rose quickly and without flaws.

The company took on heavy debt with its most recent big acquisition – the Australian company Rinker (which doubled its size again). Cemex was temporarily shaken by the global market crash. But the foundation of a strong culture with sophisticated management processes and highly trained personnel helped Cemex weather the financial crisis quickly and return to high performance.

One of the more mundane differences between perpetual winners and long-term losers among businesses, sports teams and other organizations is that winners simply work harder and spend more time preparing to play the game. Winners are more likely to take the time to repeatedly hone skills and test ideas in preparation for change. Winners learn and experiment in a disciplined way, with a commitment to enduring principles and a long-term purpose that encourages patience on long quests for victory. They strengthen management processes and test the validity of their ideas.

This isn’t dramatic or glamorous, but it works. In contrast, teams or organizations headed for losing streaks lack discipline and don’t always rely on facts before chasing fads. They believe that their wealth or high-class status entitles them to winning without doing the work.

To be a long-term winner, invest in these three underpinnings of confidence:

1. Accountability. Face facts honestly and take responsibility for your own actions. (This is something that was noticeably missing in failed banks in North America and Europe.)

2. Collaboration. Invest in finding partners and allies, to support new initiatives but also to caution against over-indulgence.

3. Initiative. Encourage constant small innovations rather than relying only on the occasional blockbuster hit (or high-rise building). Toyota uses this method, and it’s now the world’s leading auto company. Toyota has big visions (like an engine that cleans the air as it is used), but the Toyota production system stresses constant small improvements, one step at a time. Plagued by recent quality problems in the United States, Toyota is using this methodical foundation to identify root causes, make changes and get back on track.

Winners are not necessarily flashy or endowed with the hottest new thing; they are steady, disciplined and prepared. They have some "instant successes" but, even better, they have few outright failures. They bounce back from setbacks because they stand on firm foundations.

There will always be companies, countries and capital-rich entrepreneurs who build ego-gratifying monuments before they’ve ensured a solid business foundation to hold them up. The faster they rise, the harder they can fall.

After an era in which the biggest and fastest got the attention, we may see more interest in smaller and slower. I am reminded of an ancient tale in which a plodding tortoise beats an arrogant hare through a strategy of "slow and steady wins the race."

Being a winner after the global financial crisis recedes will require hard work. It will require investing in strong business processes with accountability, talented people and strong partnerships, and the initiative to make continuous improvements or mid-course corrections as circumstances change.

That is the foundation on which a tower can stand firm. Remember: Instant success takes time.

Distributed by The New York Times Syndicate