The 4+2 assessment is derived from the key factors that are essential for sustained business success, based on extensive ground breaking research outlined in this study first featured in Harvard Business Review: What Really Works: The 4+2 Formula for Sustained Business Success. The assessment allows you to peg the four key primary management practices, strategy, execution, culture, and structure, and four secondary management practices‚ talent, innovation, leadership, and mergers and partnerships along 32 factors that are the most important for sustained business success.
The study showed that organizations needed to excel at ALL these four primary management practices.
- Formulating, implementing and maintaining a clearly stated, focused strategy.
- Developing and flawlessly executing a detailed operational plan.
- Establishing and communicating well-defined company values that inspire everyone to do their personal best tied to rewards.
- Structuring and maintaining a fast, flexible, flat organization to get tasks done and mission accomplished.
In addition, they needed to excel at any two out of four of these secondary management practices: which two don’t matter.
- Recruiting and holding on to talented managers and personnel.
- Instituting a strong leadership program that involves both the Board of Directors and management.
- Inventing and implementing innovations that are industry-transforming.
- Making growth happen with mergers and partnerships.
Over the ten-year study period, investors in the winning companies saw their money multiply nearly tenfold, with total returns to shareholders of 945 percent. By contrast, the average loser produced only 62 percent in total returns to shareholders over the decade.
From 1986 to 2011, these same winning companies saw average share price increases of 1,870% over this 25-year period, versus just 495% for S&P500 companies. During these 25 years, market capitalization grew by 4,040% or an average of 162% per year, and annual revenue growth was up 110% per year! The companies in the study included many well known names such as Avery Dennison, Campbell Soup, Cardinal Health, Citigroup, Duke Power, General Electric, Home Depot, Nucor, Procter & Gamble, Target and Walgreens, to name a few.
For the first time, these findings are presented in a easy-to-take survey that will give you a powerful overall perspective of how your organization fares on these factors, and where you might wish to focus key improvements that will have a significant impact on your bottom line and long term success.
To assess your organization against the 4+2 formula, click here.