The people factor.

• Author: Hall, Walter R., Jr.
• Position: DOLLARS SENSE - Business management

THE MAJOR CHALLENGE facing all businesses is to achieve consistent, long-term profit and growth. The key word is consistent--that is the toughest challenge. When I first became involved in selling services to companies that, in turn, sold services at the retail level, it struck me that what they all were looking for was a "magic pill." Swallow it (painlessly) and you miraculously will become the dominant force in your market, possessing something special of high customer value that none of your competitors have. The only trouble is, there never has been any such magic pill. There is no easy, painless way to success--for companies or individuals.

What many businesspeople thought came close to the magic pill was the fad du jour that gripped the business community periodically during the latter half of the 20th century. These included fads like managing by objectives, conglomeration, reengineering (shorthand for major staff reductions), continuous process improvement, Six Sigma, quality circles, T-groups, and the granddaddy of them all, the Internet, which obviously has changed everything. The typical reaction to a particular fad went something like this: "So, let's get the technology, and we'll crush the competition. You ask how we're go ing to apply it? We haven't figured that out yet--but we're afraid all of our competitors are going to find out before we do."

Some of these fads were effective and live on, such as Six Sigma and the truly important idea of quality, which now is viewed as a profitable necessity, not an expensive add-on. However, many of the fads were disasters, like conglomeration (i.e., buying lots of disparate businesses with the theory that when one was down, another would be up). Most conglomerates that took shape in the 1960s died in the 1970s.

I cite this brief history of fads to point out that they all have one thing in common: people. That is the constant. It never changes. What has changed, however, is that there now are four other must-haves to compete successfully in the markets of the 21st century. The top people also must have the best knowledge, supported by the best values, leadership, and organizational structure. That is what is required to achieve that long-sought-after, elusive ideal of profit and growth resulting from a sustainable competitive advantage. That is the real magic pill.

The term "best people" is, of course, relative and a bit of a misnomer (as is the so-called "best" of everything else). Every...