Filed under: business

Three Things Every Business Needs

Some recent self-reflection and mentoring of soon-to-be alumni of my alma mater, St. Olaf, have caused me to think hard about those traits that make a person successful, regardless of the road they pursue.  

Reading Amar Bhide's "The Origin and Evolution of New Businesses" has prompted me to think about what assets might allow a business to be successful, no matter what road it pursues, both initially and over time. Here is a try at three:

Human Capital - Intelligent and open-minded people are more capable of adapting to the major external changes that determine the life or death of a company, both initially and when it is well-established. Execution and process-oriented people ensure that an organization (profitably) realizes whatever vision it sets out to achieve.  Hire and retain people like this, and you'll be well on your way.

Social Capital - This all about reputation and relationships. Build a strong brand, and do good by your customers, vendors, and employees. If you do, your ability to introduce new products and transform your business will be greatly facilitated.

Financial Capital - Money, like people and relationships, is fungible. If you can build a strong cash base and/or develop the reputation and relationships required to readily raise money, you can be much more strategic and planful in your execution.

Technology is Always a Complementary Strategy

@Justin_Bacon shared this fantastic blurb from Seth Godin on social networking yesterday. 

Seth comments:

"The internet this giant cocktail party with all these people swarming around connecting because they're keeping score[...] Networking is always important when it's real and it's always a useless distraction when it's fake. What the internet has allowed is an enormous amount of fake networking to take place[...] What matters is, Where are the real relationships?"

It sounds a bit reactionary, but he makes a great point, and one that I tried to convey in a short talk that I recently gave to a class at a local business school. While Godin is cautioning people against seeing online social networking as a cure-all, I was nudging an audience of relative non-users to get online as a way to complement their offline networking strategies. Our goals are different, but messages are very similar.

Here are a couple of the images I used to make my point. Hope you'll find them interesting/useful.

Which B-School is Best Prepared to Lead a Globalized World?

The Financial Times is not exactly transparent about how "International Experience" is calculated, though it sounds specific to students and their time during the MBA program.

If these rankings are any reflection of reality, it's amazing to see just how poorly many top US schools and, specifically, Harvard Business School rank. Are we preparing people to lead in an increasingly globalized world?

Gary Hamel: The Hole in the Soul of Business

One of my favorite New Yorker cartoons shows an office worker slumped against the wall, clutching his chest. As worried colleagues rush to aid the stricken employee, he mumbles: “Don’t worry, it was just a fleeting sense of purpose.”

[...]

Here’s an experiment for you. Pull together your company’s latest annual report, its mission statement, and your CEOs last few blog posts. Read through these documents and note the key phrases. Make a list of oft-repeated words. Now do a little content analysis. What are the goals and ideas that get a lot of airtime in your company? It’s probably notions like superiority, advantage, leadership, differentiation, value, focus, discipline, accountability, and efficiency. Nothing wrong with this, but do these goals quicken your pulse? Do they speak to your heart? Are they “good” in any cosmic sense?

Now think about Michelangelo, Galileo, Jefferson, Gandhi, William Wilberforce. Martin Luther King and Mother Theresa. What were the ideals that inspired these individuals to acts of greatness? Was it anything on your list of commercial values? Probably not. Remarkable contributions are typically spawned by a passionate commitment to transcendent values such as beauty, truth, wisdom, justice, charity, fidelity, joy, courage and honor.

I talk to a lot of CEOs, and every one professes a commitment to building a “high performance” organization—but is this really possible if the core values of the corporation are venal rather than venerable? I think not. And that’s why humanizing the language and practice of management is a business imperative (as well as a moral duty).

A noble purpose inspires sacrifice, stimulates innovation and encourages perseverance. In so doing, it transforms great talent into exceptional accomplishment. That’s a fact—and it leaves me wondering: Why are words like “love,” “devotion” and “honor” so seldom heard within the halls of corporate-dom? Why are the ideals that matter most to human beings the ones that are most notably absent in managerial discourse?

[...]

Why is it that managers are so willing to acknowledge the idea of a company dedicated to timeless human values and yet so unwilling to become practical advocates for those values within their own organizations? I have a hunch. I think corporate life is so manifestly inhuman—so mechanical, mundane and materialistic—that any attempt to inject a spiritual note into the overtly secular proceedings just feels wildly out of place—the workplace equivalent of reading a Bible in a brothel.

[...]

Every organization is “values-driven.” The only question is, what values are in the driver’s seat?

[...]

Which brings me back to my worry. Given all this, why is the language of business so sterile, so uninspiring and so relentlessly banal? Is it because business is the province of engineers and economists rather than artists and theologians? Is it because the emphasis on rationality and pragmatism squashes idealism? I’m not sure. But I know this—customers, investors, taxpayers and policymakers believe there’s a hole in the soul of business. The only way for managers to change this fact, and regain the moral high ground, is to embrace what Socrates called the good, the just and the beautiful.

So many fantastic bits of wisdom in this one post. Awesome.

Some similar thoughts in a SocialEarth.org post here.