2 vital signs of healthy companies

How do you know your company is healthy? We tend to think we're thriving as long as the business isn't obviously failing. If it's growing, and if the rate of growth is increasing, that looks great. But when I'm looking at businesses, there are two things I look for that tell me whether the company and its people have what it takes to get big and stay that way.

ORGANIC TALENT

How many people in the company have grown with it? If early employees have found and seized the opportunity to grow, then the hiring choices have been good and leadership has been nurturing. If, on the other hand, all growth has depended on outsiders, there's a problem: Either the leadership hasn't paid enough attention to the talent that is already there, or external promise is more highly regarded than internal execution. I've sat on the boards of many companies where talent was always the gating factor. Often that was because good people came - and went. That the company could always recruit strong players was a good sign but the fact that they left was not.

Hiring talent from outside the business is expensive, time-consuming and expensive. The best companies I know nurture young talent, train and develop it. IKEA is famous for almost never bringing in talent at a senior level, because they don't need to. This gives hope and encouragement to those throughout the organization and it means that appointments are much better informed than any hiring through interviews can hope to be.

REPEAT BUSINESS

A good sales team is wonderful - but even better is a company that delivers. When I want to know just how creative and professional a business is, I don't look at who's in the order book but how many of them are repeat customers bringing bigger volumes of business. While selling to a customer the first time is hard, all those sales numbers say is that you can close deals. If you can keep and grow customers, not only are you building relationships that are more likely to endure; you're also using your precious sales resources more effectively.

Lots of people judge businesses on their revenue alone. To me, that just says whether a business is viable - for now. What I really want to know is: Is it strong? Will it last? Would anyone ever want to buy it? If you can keep and grow both your employees and your customers, that tells me pretty much everything I need to know.