By Ron Sidman

How long you see yourself being involved with your company can have a significant impact on the degree of your business success. Long-term thinking and commitment can lead to superior short-term and long-term results.

I suppose one thing I can claim to be an authority on is how to run a business over an extended period of time. I created my company, The First Years, in 1972 and managed it for 32 years. It didn’t ever become the biggest company in the industry but we were always profitable and earned, I believe, a solid reputation for being progressive and innovative. At the time of our sale in 2004 to the RC2 Corporation, sales were around $140 million.

I don’t know the statistics but my guess is continuity of leadership like that is very rare and not just in the juvenile product industry. It might not surprise you to hear that I attribute a lot of my company’s success to the fact that I always had a long-term mindset. From the outset, I expected the company to exist indefinitely and I expected to be the guy running it for as long into the future as I could imagine. As a result, my dreams for the company were bold. And my commitment to riding out the inevitable ups and downs was very strong.

On the other hand, there are entrepreneurs that start companies with the clear intent to get the company established and then sell it for a pretty penny within a few years. This does happen to some degree in the high tech world where the market is huge and things can go viral quickly but rarely in our industry. The problem is that if you’re thinking is short term, your vision of success will likely be tame and conservative. And if things don’t go well in the early stages—which they usually don’t—it can be very discouraging to see your imagined time frame become less and less realistic.

If you are a serial entrepreneur, this post is not for you. If however, you think of your business as your career or at least a multi-year proposition, here are some suggestions for how to sustain it for a long length of time based on what worked for me.

1. Have a Clear Vision

Having an exciting dream that is shared by your key employees is what creates the direction and generates the energy that will propel your company year after year. Especially when times are tough, it’s that exciting vision that will keep everyone going. At The First Years (TFY), updating our long-term and medium-term visions was always the first step in the strategic planning process.

 2. Document and Enforce a Set of Core Values

The most successful and long-lived companies usually have a very clear set of values that are consistently espoused and enforced by leadership. It’s those values that allow them to establish and sustain a solid reputation that attracts the top talent, customers, and partners. At TFY, we established early on a set of core values related to customers, employees, and commitment to excellence that allowed us to align our daily behaviors in a positive and consistent way.

 3. Stay Vigilant

You can’t fix what you don’t know is broken. You can’t cope well with changes that catch you by surprise. You need a feedback system in place to make sure you are always aware of everything going on inside and outside the company that could impact your future. At TFY, one of the first things we did was to establish a “Parents Council” that started as meetings with local groups of moms but eventually became a nationwide internet-connected network that was a significant competitive advantage for us. We also had a data reporting system called “Vital Signs” that generated weekly and monthly performance charts.

 4. Appreciate Your Employees

People leave bosses not companies. Hiring and retaining talented people is critical to long term success. Employees need to know you recognize and appreciate the role they play in the company’s success and that management is there to help them be successful in their jobs. At TFY we taught our managers that there job was to enable their direct reports to be successful. We also maintained open support and communication through company-wide meetings, “lunches with the President”, and employee appreciation special events.

 5. Always be Recruiting

Speaking of hiring, as you grow you will need more people and people with higher skill levels. Think like a pro football team general manager. You need to always be on the lookout for talent so that when you need someone you know where to find them. As CEO, I did many things to learn about and meet potential new employees via networking at industry events and through other contacts.

 6. Live Within Your Means

I admit to being fiscally conservative. I’m not a proponent of living in an atmosphere of high debt or wondering where the money will be coming to meet the next payroll. I like to sleep at night. As soon as possible, you want to be able to finance your business via profits. At TFY, we always operated within our means and ended up when the company was sold with no debt and almost $30 million in cash on hand.

 7. Be Obsessed with Improvement

You simply have to keep getting better at the key components of your business model because you can be sure your competitors will. At TFY, we were a process-centered organization that used Six Sigma techniques to drive continuous measurable improvement. Every senior manager was expected to improve their department’s quality and efficiency every year.

 8. Leverage Processes to Maintain Consistency

Designing and continuously improving your key processes (e.g. product development, production, marketing, customer service, etc.) makes managing a company infinitely easier because it allows employees to manage themselves. A key is to make sure that process participants understand the purpose of the process and don’t just blindly follow the steps.

 9. Know Your Costs

We once had a new competitor that rose up quickly and undercut our prices by a considerable margin. We couldn’t figure out how they could do it. There was a reason we couldn’t figure it out. Turns out they had no idea what their costs were and had to announce about a $100 million loss at the end of the year. At TFY, on the other hand, we were meticulous about monitoring costs by product, by account, by department, etc. And we were quick to act if we found we weren’t making money in some aspect of the business.

Next Steps

Do some soul searching about what your time frame is and what you want it to be. If you’re thinking short-term, get out as quickly as you can and work on something else that you can really build over time. If you’re in it for the long haul, consider implementing some of my suggestions. They worked for me!

If you’d like more information or assistance from me regarding your unique challenges, consider taking advantage of JPMA’s Executive Mentor Program. Check the JPMA web site for more information or contact Steve Clark at sclark@jpma.org.