Business is often compared to a competitive sport. So, let’s pick NASCAR or the Indy 500 and figure out what competing teams have in common:
- The idea or conviction of one’s own beliefs about what is possible (= vision).
- A meeting place for testing one’s ingenuity against that of rivals.
- Sporting the best performing vehicle they can bring to the race at any given time.
- Employing the best driver to lead the team to victory.
- Employing the best support team to produce and deliver success.
- Insight into the capacity and capability of their vehicle (and that of others).
- Attracting the best financiers who believe in realizing that belief of what is possible.
So without a vehicle, you cannot realize your dream. You can dream about testing your capabilities against rivals all you want, and talk about racing all day long and even registering for a race, but without a vehicle, you’re not even getting to the starting line. The least you need is a jalopy.
It’s needless to say that the outcome of every single race is determined by the capabilities of the vehicles that enter the race, that of their drivers and the interaction between a driver and his/her vehicle. So, how do you measure performance during the race apart from lap time? Well, there’s the instrument panel with multiple gauges that provide you with read outs for speed, engine revolutions, oil pressure, oil temperature, engine temperature and fuel consumption.
Furthermore, the performance of even the best vehicle in the world is limited by the abilities of its driver. In turn, the performance of even the best driver in the world is limited by the capabilities of his/her vehicle and that of its mechanics.
Top performance depends on:
- The ability of organizing every single aspect of racing into a single competitive force. Organizing requires trade-off decisions among equally desirable properties; choosing more of one at the expense of something else. For example, will you hire a better but more expensive driver or invest in a set of brand new tires? However, “Gold-plating” one single component part of a vehicle is a waste of resources because success depends on how the vehicle performs as an integrated whole. Optimizing a single component part far beyond the over-all standard of the vehicle will only command a marginal rate of return. Furthermore, any trade-off decision to deliberately apply lower standards of craftsmanship or safety for one or more component parts of the vehicle is a form of predatory cultivation, which compromises top-performance of the vehicle as a whole.
- The ability to intelligently directing that force towards the realization of one’s dream. All employees, including all executives, need to be united in achieving this one vision. In order to take ownership of the idea, everyone needs to agree on the definition of winning and therefore understand what’s expected of them as a team and thus of each and every one individually. Neither micro-management nor zero-tolerance policies are an option when unleashing the full might of one’s force.
Hence, you can only achieve first place, receive the coveted trophy and collect the prize money through compliance with the objective of the sport; complete the fixed number of laps without any safety violations in the least amount of time with an authorized vehicle.
The trophy and prize money represent the accolades and distinction for a job well done. Stealing the prize money and trophy or making a replica of the trophy does not bring you the honor and distinction that is earned by winning the race. However, the winner of the race will always be the winner, with or without trophy and prize money; period!
Being in business is no different and yet management education prescribes different principles. Instead of encouraging leaders to comply with the objective of business, giving buyers more in use-value than you take from them in cash-value, they teach the opposite. They emphasize making money, by teaching best practices that restrict allocation of resources that would increase a business system’s capacity and capability to serve clients, force employees to do more with less and undermine rivals!
Justifying the sports analogy
A) Every business starts with an idea or a vision of improving the lives of other people and giving the entrepreneur the satisfaction of fathering that idea and bringing it to life.
B) The success of an idea can only be ascertained in a place where demand and supply meet. In other words, in the absence of an audience to demonstrate the uniqueness of your products or services, you have no chance of being recognized for your abilities. Without recognition for your achievement, you will not be rewarded.
C) The purpose of any business system is to realize the dream. A business system is thus a vehicle for demonstrating your unique abilities; if you have no vehicle you cannot race and will receive no accolades, no trophy and no prize money. The purpose of a business system is thus to run the race in order to qualify for the opportunity of winning.
D) Business systems like vehicles are impartial regarding their performance and deployment. That means they function according to how they were designed, built, implemented, maintained and managed. In other words, a business system functions according to its Business Governance. Given the importance of business governance, any system requires a single person to assume ultimate responsibility for the success and failure of the system and therefore be granted the right to exercise ultimate authority for governing the system. That person is the driver of a business system.
E) No system designs, builds, implements, maintains or manages itself; it requires a support team that can draw upon multiple areas of expertise. These areas of expertise need to be organized and intelligently directed at achieving a unifying vision of service to others.
F) Business systems would perform better when their governance is guided by measurements of their capacity and capability like in a car instead of financial measurements. Imagine a racing car which dashboard provides read outs for the team’s, Accounts Payable, Accounts Receivable, Return on Investment or Price/Earning ratio. What is the benefit of that information to the driver for winning this race or the next? Financials are important but not for improving the capacity and capability of the system under your command & control. Furthermore, no performance can exceed that what the system is physically capable of demonstrating. So, don’t set unrealistic goals!
G) Investors in a business provide financial support for the realization of a unifying vision of service to others, and they’d better back a vision in which they firmly believe. After all, their Return on Investment is directly linked to the purpose of that business system. If they don’t subscribe to the purpose of a business system, they should not bet their money on its success either. Therefore, it is unrealistic to expect that every trade-off decision would be measured against the realization of any purpose other than creating use-value for others. How many clients do you know that are inspired to do business with you when explaining that the purpose of your business is to give them less in use-value than you take from them in cash-value? Profits are the accolades, trophy or prize money that one receives in recognition by your clients for a job well done!
Independent C-Level Thinking
Leadership is like a golf game where you play against yourself in moving the ball from the tee box to the hole. However, business is a team-sport. So, as a business leader you’d better take heed of what General George S. Patton US Army said: “Never tell people HOW to do things. Tell them WHAT to do and they will surprise you with their ingenuity.”
This adage not only applies to subordinates but also to their leaders. After all, ingenuity is the power of creative imagination; a skill set or aptness in organizing knowledge into a force and directing that force intelligently towards the realization of a unifying vision of service to others.
Therefore, leaders who rely on strict adherence to best practices for leading their team to victory are lacking ingenuity and thus authenticity. Col. John R. Boyd, USAF said that: “leadership implies the art of inspiring people to enthusiastically take action toward the achievement of uncommon goals.” Success at the art of inspiring people depends on a leader’s authenticity, which cannot be outsourced! There is no best practice for being Authentic.
Our expertise is describing the principles that govern the cause and effect relationship between a business system’s component parts. Once we have identified the component parts at your disposal and shown you their intricate relationships and interdependencies, you can unleash your unique creative imagination for organizing resources into a competitive force and directing that force intelligently towards the successful realization of a unifying vision.
Your Take-Away Lessons
We learned that even the best leader needs a vehicle, or business system, in order to BE in business. The success of any vehicle depends on it’s leader’s ingenuity to organize the many component parts, such as marketing, sales, leadership and finance, into an integrated force. Most competing forces contain the same component parts that are obtained from the same Original Equipment Manufacturers, and its work force is educated and trained by the same institutions for management education. The difference between forces is in their organization; how the component parts works together as a singular, unique, integrated and open system.
Unfortunately, the current dominant thought of management education teaches leaders how to commit predatory cultivation on the vehicle under their command and control. This happens when the next available step in operational efficiency must be obtained from lowering the standards for quality and safety, which cannot fail to result in poor design, incorrect implementation, deferred maintenance and careless management. Therefore, collapse is a failure to adapt to variations in the business system’s capacity and work-load or its surrounding market-conditions. Collapse is often times self inflicted.
We also learned that the prerequisite for success is defining a unifying vision of service to others and unleashing the force of integrated knowledge towards the realization of that vision.
In conclusion, no matter what you want to achieve in business, you’ll need a vehicle to make it happen. Therefore, cherish your business like a NASCAR vehicle so that you can have peace of mind when pushing it to the limits of its performance envelop.