There are many types of organisational statements and they all mean different things to different people. But which ones are worth having? Is there a hierarchy in their importance? And most importantly, do they matter?
Companies all over the world produce these statements without giving a great deal of thought to their meaning. They produce them because they think they should have them. It’s like authors who use quotes by famous people to get their point across. They like the words, they like the sentiment and by adding it to their work they think it validates what they are trying to say.
But it’s lazy. It’s really saying ‘I’ll put these words in, people will think that I’m smart and the words of someone else will support my words’. A bit like company owners that blindly create statements in the hope that it will present the reader with some kind of meaning or purpose that the author wants to attribute to their business.
But these statements mean EVERYTHING to the reader and you better live up to their meaning…or else.
Forest Mars, Sr. (yes, of the Mars Corporation) introduced it in 1947 in a memo, saying “the objective of our businesses is to create mutual benefit for all stakeholders.” And then they went ahead and made unhealthy products that their customer’s loved. The ‘benefit’ to which Mars referred is the enjoyment and satisfaction of his customers, he never considered their health.
This was the old principals of Taylorism where employees were grateful to have a job and employers put shareholders first. In many western businesses, it is a legal requirement for boards to put businesses first.
But this generation of business owners, entrepreneurs and thought leaders want more. They want PURPOSE to mean something. They will mend and make do instead of consuming more. They will consider sustainability ahead of profit. They want social integrity ahead of greed. They want the world to be a better place and top of their agenda is healthy people. They take these things seriously and so must you.
“We must accept the discomfort of the truth, as well as the discomfort of bringing to life a new way of doing business,” says Mars Corporation “Our kids are watching us. And we won’t be able to tell them we didn’t know.”
So choose your words carefully and mean every one of them. Your customers are your kid’s generation and you better not mess with them, they know what they want and they are uncompromising in what they do.
I’ve worked with hundreds of our oft named captains of industry, savvy business owners and budding entrepreneurs and without fail they all have great minds full of brilliant ideas.
True leaders have surprisingly little in their heads. Don’t get me wrong, they have an enormous capacity for thinking but they develop a hierarchy of thought and clarity of vision. And it is this that translates into action. The rest of it is just noise and this, they relegate to a secondary brain space. It’s just background noise to them.
All leaders want to be successful. Many are scared of the unknown and some are terrified of failure. Yet on their shoulders, many will depend and from their actions, businesses will succeed or fail. Strategy is the life-blood of any business. I hear people say that money is the lifeblood but that simply isn’t true. Money oils the wheels and is needed in various levels of supply to ensure that all of the other elements do their work.
The old saying “fail to plan and you are planning to fail” haunts many of our leaders as it did Benjamin Franklin. Simply described, strategy is no more than planning and attributing the available resources in order to achieve a goal or aim. So if it can sound this simple, why is it so hard to do for many good leaders?
Well, it’s down to two things in my experience. Firstly, many confuse tactics with strategy. Tactics are the tasks we do to work towards the strategic goal. Secondly, leaders try to serve too many masters. The first part is relatively easy to fix. Simply concentrate on the why instead of the what and the how. The second part is much more difficult. Masters are the people who have a stake in what you are doing. Time is indeed a punishing master, finances a constricting clerk. Competitors don’t stay still for long enough to shoot them and shareholders…well, they just don’t understand what you’re going through. As for family, they want what you want but they just want you home in time for dinner. And you! Well, many of our leaders work for psychopaths…themselves.
So if we think of an American football team, the goal is to win the Superbowl. They can only do this if they are consistently better than their competition, that they can consistently sustain that betterness and that they can score one more point than the third-placed team. So their first aim is to score enough points to get them to the Superbowl final.
Each area of the club will manage a prescribed range of outcomes and outputs. Physios will get them and keep them fit. Nutritionists will make sure they eat optimally to achieve their targets and ensure they have enough fuel to get them over the line. Finance will ensure that the income and expenditure flows to and through the club as and when needed. Groundkeepers will prepare an optimal playing surface including the exact dimensions of the pitch. Team managers will devise and impart to the players a whole range of tactical plays and team psychologists will ensure that they are mentally tough and resilient under any conditions. The players just get to dress up and earn most of the money…they are, after all, the dream team (and the product – the human capital). Once in the final of the Superbowl…all of these things form a microcosm of activities and events finely tuned to achieve one aim over a few hours in the game…finite details and knowing every strength and weakness both teams possess and finding those moments where the extraordinary happens.
So if we follow this model. We work out where we want to be in say five years from now. We can visualise what it looks like and how it feels. We examine where we are now and what we need to do to make the journey from here to five years away. We consider resources, the market, our products or offer and the health of the business. We know what we need to make the journey from starting point A to finishing point B. We have a plan, a strategy.
But we often disregard the most important part of the plan, the people. Imagine the Superbowl winners. They will have exactly the right person in the right role completing the right tasks at the right time. They are hired for their talent and the club then sets about developing their skills to the level at which they are expected to consistently perform. Everyone is matched exactly to the strategic needs. Most businesses fall short because they don’t recruit properly or develop their team to the optimum. Businesses simply hope that everyone will step up to the plate and do what is needed. Much of it is by chance.
The owner of the business will articulate their vision and ensure that each area of the business has the resources deployed at exactly the right time and monitor progress to ensure everything stays on track. Their sole responsibility is resources. To make sure everyone has exactly what they need to be highly successful. And as Franklin often said, “a penny saved is twopence (tuppence) dear”. By cutting corners in an attempt to serve a profit master, leaders can simply lose sight of the goal. The first thing that is cut is training…imagine setting out to win the Superbowl if you cut the training.
When I ran businesses I put myself through a system of development to learn about selecting Board Members based on their motivated abilities. When I use this tool to develop leadership teams, I can see very quickly where there are gaps and what impacts this will have on achieving the aims of the business.
A few weeks ago the world changed and people were asked to change and make changes to the way they lived. We are social animals, we like to operate in packs and we associate with our different tribes. Some people work with and for other people, a few have people working for them. Nobody was immune from the impact of these changes.
Everyone was asked to make sacrifices and in the true human community of spirit, we pretty much did what was asked and behaved in a way that was expected of us. History will pick over the bones of our actions and it will show us for good or bad the way our leaders performed in a time of crisis.
But changes were made, sacrifices were given and minds were changed. We adapted and very quickly learned how to make the most of what we were given and make do with what we had. Everyone suffered financial loss and yet the government stepped in and plugged some of the gaps. Of course, we will all have to pay it back in one way or another, but we are all in it together.
We have, however, discovered that a new work/life balance is possible and in the main, we are enjoying the benefit of becoming renaissance family people again and felt the value of our many relationships and the small things in our lives.
Those running businesses large and small are hoping that the workers return refreshed, enthused and reinvigorated, ready to get the job done and that their markets will be right where they left them and ready to place orders. I suspect that this hope may well be dashed as markets adjust to a reduction in consumerism and employees demand that the work/life benefits remain long after lockdown.
This week I heard a White House spokesperson, Kevin Hassett, eulogise over the idea that “our human capital stock hasn’t been destroyed; our human capital stock is ready to get back to work”. A chilling statement about how working people are seen and valued.
Many of our global businesses have thrived on consumer led economics. Human capital went out to work, they worked hard, they worked long hours, they were cubicled and ordered in lines of efficient output. When they finished they wanted to show off the rewards of their labour. They surrounded themselves with the symbols of success. It was how they became recognised for their efforts. But people are changing. Their values are changing. Their needs and wants are changing. Their outlook and aspirations are changing.
People want connection more than they want stuff. People want intimacy and shared experiences more than they want to jet off to an island in the sun or a ski resort to be seen. People became dry and burnt out. They sought nourishment in inanimate objects and they subordinated the art of cherishing life to the lusts of consuming more and more product.
Human capital isn’t coming back to work…people are coming back to live amongst work and lifestyle changes. There will be conflict and struggles. There will be a retrenchment of commitment. There will be downsizing of application. And all of this will impact consumer demand and work output.
Leaders of businesses will have to think anew about how they sanction a new way of working so that their business adapts and flourishes in these times of change. If you run a business and think ‘this won’t happen to me’…it will and it has, deal with it.
Within the world of business, there are only two types of thinkers. Conservative thinkers, those that become the really great managers. And their counterparts, the liberal thinkers, those that don’t become really great managers.
Conservative thinkers, and yes folks, that’s with a small c, are great at doing the right thing. They are very diligent, dutiful, and conscientious. They know what is right for them and they stick to it. They are happy making big decisions and most of the time they aren’t emotional about it, they just do what is clearly the right thing at the time.
Conservative thinkers work hard to maintain integrity in their world. They develop and maintain well-thought-through systems and they create good habits. Habits they revert to and rely upon time after time. Conservative thinkers are usually very reasonable.
Liberal thinkers are the flaky ones. They are really good at seeing the overall ‘aesthetic’ of an idea; the broader picture. Liberal thinkers are more abstract and likely to veer off at tangents and throw stones into the pond just to see it ripple.
Liberal thinkers are much more open to the ideas and concepts of others. They broaden out the debate and create a soup of thoughts and conjecture. They are very hard to pin down and are sceptical of reason or constraint.
So, who would be best to drive us forward as a nation and put us back on the map of greatness around the world? Well, it’s the small band of liberal thinkers. The Ferdinand Porsche or Nikola Tesla. The Alfred Nobel or Earnest Rutherford. The Isaac Newton or Albert Einstein. For these are some of the greatest entrepreneurs of all time.
And whilst greatness is largely built, commercialized and industrialized by conservative thinkers, it was done on the shoulders of our flaky liberals. Great entrepreneurs are a very rare breed and very hard to spot. In the wild, they look just like you and me. But if we release them from their cages, if we unshackle them from the ties that bind them and if we invest all that we can into them, they will be unstoppable in a new post-neoliberal virus riven world.
Britain has some great and amazing liberal thinkers, unfortunately, we are governed by managers.
It was George Bernard Shaw that said…
“The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.”
Now, before you start, I’m not advocating that all businesses should be franchised, hence the question mark.
What I am saying is that the most successful businesses on the planet could be franchised because they have wide ranging and far reaching systems. Systems are just repeatable ways of carrying out consistent business functions and tasks. Most businesses start with a team of people and then grow that team as demand increases. Many business owners then look at ways of automating functions to cut down on staffing. A cost saving.
I would suggest that the first thing any start up team should do is to look at the business when it is big. To imagine what it looks like when it’s all done and the size it could be. The reason for this is to design systems ahead of when they are needed and then build them as the business grows. But what happens next can strangle a business and become a constraint. Highly skilled and deeply knowledgeable people leave the business.
If you have run the business well with these people in post and invested in automation and AI then I would suggest that firstly, everyone is then trained to operate in all parts of the business. Why? Well, innovation. Everything that has gone into building the business has built a business that works as it is. Secondly, it frees up team members to think. To think and innovate and then think some more. To crystal ball gaze. To Imagine. To build a new future for the business. After all, they built the first one.
Whatever you do, whatever the pressure to reduce costs, whatever you think about rainy days…don’t lose this knowledge and talent. They are your future business.
I have always been interested in better-ness. Improvements that make things better than they are and what does this betterness mean? Statistically, Brazil dominated Germany in the recent semi final, they had more possession and they completed more passes yet they lost 7 – 1. Back in 2001 England beat Germany 5-1 and Germany decided to overhaul their entire footballing system and are the dominant force in the world game.
The statistic on which they centred their change programme
and one that is starting to be used in other improvement programmes is time on
the ball or the completion rate. When England beat Germany, Germany spent on
average around 3.4 seconds on the ball (the time each player had control of the
ball). When Germany beat Brazil they spent less than a second.
When we recognise change is needed we must focus on one key benchmark at a time and build a programme of improvements around it. Defining that benchmark is where the real skill lies. It is the single most important thing that is core to all decision making.
By reducing their time on the ball the German FA had created a core that affected everything else. Players needed greater skill, they needed to operate in more confined spaces, they had to think faster and read the game better, they had to be fitter and show more fortitude and mental resilience.
The alchemy and dark art of any consultant is to identify that key change champion. The one thing that will define all other changes. The one thing that will lead to success. They didn’t ask the players, they didn’t ask the manager, they asked consultant analysts to impartially study where wrongness starts and to replace it with a programme of betterness.
Competitive analysis is a statement of the business strategy and how its strategy relates to that of the competition. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.
The first step in a competitor analysis is to identify the current and potential competition. There are essentially two ways you can identify competitors. The first is to look at the market from the customer’s viewpoint and group all your competitors by the degree to which they compete for the buyer’s money. The second method is to group competitors according to their various competitive strategies so you understand what motivates them.
Grouping your competitors allows you to analyse their strategies and identify the areas where they are most vulnerable. This can be done through an examination of your competitors’ weaknesses and strengths. A competitor’s strengths and weaknesses are usually based on the presence and absence of key assets and skills needed to compete in the market.
Through your competitor analysis, you will also have to create a marketing strategy that will generate an asset or skill competitors do not have, which will provide you with a distinct and enduring competitive advantage. Since competitive advantages are developed from key assets and skills, you should sit down and put together a competitive strength grid. This is a scale that lists all your major competitors or strategic groups based upon their applicable assets and skills and how your own company fits on this scale.
put together a competitive strength grid, list all the key assets and skills
down the left margin of a piece of paper. Along the top, write down two column
headers: “weakness” and “strength.” In each asset or skill
category, place all the competitors that have weaknesses in that particular
category under the weakness column, and all those that have strengths in that
specific category in the strength column. After you’ve finished, you’ll be able
to determine just where you stand in relation to the other firms competing in
Once you’ve established the key assets and skills necessary to succeed in this business and have defined your distinct competitive advantage, you need to communicate them in a strategic form that will attract market share as well as defend it.
Many of the founding generations of any organisation can find themselves locked into ethos based thinking where the integrity of the original model is paramount and above any other consideration. Any organisation that has become ethos based and has no clear vision for either the Pathos or Logos elements of a vision will find themselves unable to articulate their vision. They have previously appealed to a sense of ethics, the reason they started up, and for those whom the way it was becomes their authority position, it has become everything for their attention and efforts. When their ethos is attacked, as we challenge their beliefs, they lose all reason, they have no argument, they revert to passionate and venomous vitriol.
Pathos is about connection, buy-in, believing the ethos rhetoric to be strong on facts (but it isn’t). The bible of our past iteration, the reason they all exist and that which brings meaning to what is otherwise an empty work existence. It’s the party line and it cannot be broken or they will have nothing left and no ethos on which to fight for solidarity and tribal relationships. The ethos mind is a campfire mind. They sit around the campfire, they watch the flames, they feel its warmth and they fear moving away, less it becomes unattended and goes out. The flames have mesmerised and paralysed them into a huddled mass. The ingredient missing from the leaders of this group is wisdom. So their only course is to revert to sympathy (pathos)…without you guys, we don’t stand a chance, so and so is too powerful…get behind the ethos and help us protect it…pathos has just teamed up with ethos…this isn’t a good place to be.
Logos, on the other hand, is logical, consistent, strategic and factual. It is based on reasoning, seeing the path to a bigger picture and focusing on the destination. It is the enemy of an ethos-pathos based group. Logos is the dry, emotionless face of big brother. The dominant thinking of the ruler, the heartless beast that will trample ethos and pathos to death.
But if it is handled wisely, carefully, compassionately and kindly, Logos is a powerful and phenomenal invitation to set aside fear and see that the world needs ethos and pathos alongside Logos, it needs to present a belief in all three to reach a new nirvana, a new destination, a fertile land from which we can all feed and nurture each other. Logos will point out the folly of ethos-pathos based thinking, it will attack their lack of reasoning and it will expose their weak underbelly. But when they team up…your message is loud and clear…everyone whom you want to follow you loves you…they get you, they want to be part of the story. Look at Apple…