Building the machine that builds the machine
There are typically 3 states of being for a company with an ambitious goal and each leads to a different outcome. The best of these is when things move really fast in the right direction and keep accelerating as the growth compounds, in which case the likely outcome is success. The worst is when things move really fast in the wrong direction, worsening over time as all key metrics fall and morale fades, in which case the likely outcome is failure. The middle ground here defines a comfortable yet risky goldilocks zone where the business is cruising along, neither gaining altitude nor crashing toward the ground at any significant pace, in which case the outcome is uncertain since the business could at any point start trending down towards failure or start trending up towards success.
Every company aims to be in the first category and yet the reality is that 99% of companies never make it there. I’ve spent a long time thinking about what sets these organizations apart and have after extensive study distilled it down to four functional attributes that I believe are absolutely critical in determining whether a company with a sound vision and a solid strategy fails outright, merely survives, barely succeeds or outlandishly thrives. In my opinion the difference-makers are:
- How they make decisions.
- How they organize.
- How they hire.
- How they innovate.
At Finplus, we’ve condensed our approach to each of these attributes into a single mathematical expression that’s easy to understand, easy to recall and easy to repeat. Why a mathematical expression? Because mathematical expressions are a simple, elegant way to express relationships and when viewed logically, that’s all a business is. A set of relationships that produce an outcome. Establish the right relationships and your outcomes improve. Do any less and your outcomes deteriorate.
It just so happened that each of these mathematical expressions is in the form of a linear inequality and while a purely unintended consequence, I found it to be in this case particularly appropriate. Why an inequality? Because unlike equations (=), inequalities (< / >) tend to express a sense of priority. They clearly show what’s greater or less than required. Your priorities as an organization determine how you organize, innovate and make decisions (such as how to organize or innovate and who to hire or fire and why). Your priorities define your methods and your methods determine your outcomes.
Here’s how we optimize for better outcomes in each of these four critical areas:
Read more on How we make decisions
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Read more on How we innovate