Jun 24, 2023

The 19 Traits of Top 1% Performing Businesses

What does it take for a business to operate at a high level? Here are the 19 traits of top 1% performing businesses, from having internal and board-facing KPIs to audited annual financials. Find out what it takes to be the best of the best.

BUSINESS FINANCE ECONOMICS

Michael Girdley

I share 25 years of direct business knowledge and life advice. $100M (and counting) HoldCo owner. Fireworks, software, school + 9 others.

Member of Business & Startups

“How do you know a business is operating at a high level?”

These are the things I look for.

My 19 traits of top 1% performing businesses:
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have internal and board-facing KPIs.

They are updated regularly and give a complete picture.

They often predict problems before they happen.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have audited annual financials.

Also, they promptly close their books each month+quarter.

The CFO can answer reasonable questions on the spot.

(And the CEO can do the same.)
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have financials mostly “up and to the right.”

High-performing companies are profitable+growing.

And good at predicting it with a solid budgeting process.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have board materials distributed on time.

Well-prepared and free of typos.

They follow a consistent template used at each meeting.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have strong employees stick around.

Weak performers quit or leave.

Employee churn is low.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have leaders set deadlines, and they’re mostly met.

If the company meets all deadlines, I worry we’re sandbagging.

If we never meet deadlines, something is wrong.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have the team at a “healthy” level of stress.

Not burning out.

But healthily working hard on an inspiring mission.

Good stress is how we grow.

Same for companies.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have people who get along. No drama. No politics.

Body language is good.

I don’t see co-workers who hate each other.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have problem employees identified.

And moved on quickly.

I worry when the same problem festers for months.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have a clear business plan.

Ideally, something like EOS’s V/TO or another 1-page business plan system.

Everyone in the company sees it and is bought in.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies publish their core values and behaviors.

Leaders evaluate, hire and fire using them.

Unethical behavior is not tolerated.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies know why they're winning.

They have a clear picture of differentiators.

They use them to win.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have CEOs that come to board meetings prepared.

They make the most of their time with the board.

Focused on solving hard problems.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies let simple stay simple.

Underperforming orgs love to make easy things hard.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have me pulling and not pushing.

When I’m on the board of great teams, I find I’m usually asking:

“Are you sure we’re not trying to do too much?”
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies make good decisions.

At a fast pace (see OODA Loops).

And create repeatable processes to minimize fire drills.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have leadership with a growth mindset.

They listen to feedback and ideas.

They seek to understand criticism rather than argue.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies measure employee engagement regularly.

Ideally, by a system like Q12.

Leaders address problem areas directly.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Companies have a good office vibe.

They are also clean and tidy.

Especially the little things like bathrooms and kitchen.
— Michael Girdley (@girdley) June 24, 2023
Top 1% Company leadership answers questions well.

They can explain their logic soundly.

They say, “I don’t know, but I’ll find out.”
— Michael Girdley (@girdley) June 24, 2023
I’m sure there are more I missed. What’s yours?

Follow me @girdley for more on business and life.

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— Michael Girdley (@girdley) June 24, 2023
I learned all this over 30 years, building a $100M HoldCo.

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— Michael Girdley (@girdley) June 24, 2023