There are 4 truths that I’ve discovered that if you respect these truths, the business will be successful! Think of them as the natural laws of the business system (or the business body). This stems from working in and with businesses with annual revenues of $200,000 to $12 billion over 25 years . . . giving me a deep perspective on the science of business.
Address the Systemic Issue, NOT the Symptom
Too many times, business leaders address symptoms to problems instead of solving the real root cause . . . the systemic cause. This puts a band-aid on the problem and it comes back day after day, week after week, even year after year at times. When you look at your business as a system, you will address the systemic root cause of the issue, resulting in a healthier system in the long run.
Business System Truths (BSTs)
BST #1 – The business system consists of the following 3 core components: People, Process, & Infrastructure. People deals with the human element. Process deals with the action or behavior element. Infrastructure deals with the resources or tools element. Since your business is a closed-loop system, a tweak in one of these components affects the other. In my client example in a past blog, he tweaked the Process component (flow of his operations) but didn’t tweak the People component (focus and mindset of his team and himself), which was really the root cause of his business woes.
BST #2 – The 3 components have to be balanced but it always starts with People. The People component is broken down into 3 key elements: Aptitude, Attitude, and Altitude. Aptitude addresses the person’s skills, talents, and experience level. It is their ability to perform tasks based on their education, training, and past experiences. Aptitude is usually reflected by your intelligence quotient (IQ). Attitude addresses the person’s motives and values. It is usually reflected by what Daniel Goleman defines as your emotional intelligence (EI or EQ). Gino Wickman refers to the right people in his book, Traction, as “the ones who share your company’s core values.” Altitude addresses the person’s outlook in life, their beliefs, and capacity to see a grander purpose. A person’s Altitude is what sets leaders and high performers apart from the rest.
BST #3 – Without Process, People are not deployed through the Infrastructure. Imagine a very talented individual that has the brain power and the values that could crush the competition. But those talents and values don’t ever get communicated to the rest of that individual’s body, rendering that body useless. Those talents and values represent the People in your organization. But if you don’t have the right processes in your company to utilize that talent, then you’re wasting resources (and the potential of your people) and competition will eat you up. Action requires a process. Without Process, nothing gets done. Read a previous blog about the breakdown of Process = Communication + Flow + Culture.
BST #4 – Peak Performance happens when the proper equilibrium is achieved across these components. When all three of the components are working together at their balanced equilibrium, the business is functioning at its best. Every business has a specific formula of the proper mix of People, Process & Infrastructure. Some are more people dependent while others invest a lot of capital in their infrastructure so they are less people dependent. Some are very process driven so they don’t need skilled workers and high functioning technology. So the balanced equilibrium for one business could be 40/10/50 in People/Process/Infrastructure while another could be 80/10/10, respectively. This may depend on industry, development stage of the business, and other factors. Regardless, there is a proper mix for peak performance in any organization.
Are You Staying True to the BSTs?
Imagine your business system operating like a well-oiled machine. It is strong in all 3 core components: People, Process, & Infrastructure. You have the right balance with these 3 core components that allows you to serve your customers well, profit fairly, and make an impact beyond the business.
Are you respecting the Business System Truths (BST)? Or did you start with Process before looking at your People? Or did you build an Infrastructure before strengthening your People and Processes? Take a hard look at what BSTs you’re going against. If you’re not getting the results you want, chances are you’re not honoring a BST. Which one is it?
Take the Organizational Checkup to gauge the health of your company! For more information on creating a healthy business lifestyle, read about the Entrepreneurial Operating System (EOS).
Be on the lookout for deeper dives on the BSTs in future blogs. My next blog will be about the first element in People – Aptitude. Aptitude should be your baseline for hiring!
To Your Business Health!