John
Bennett, a mathematician, linguist and philosopher who lived in the early part
of the past century, proposed that the realization of potential requires five
specific elements. This article takes that concept as a starting point and
applies it to the realization of business potential. These elements translated
into business language may sound familiar, but the relationships between them
will be a new insight.
The
five elements or terms are Values, Vision, Mission, Process Regeneration
and Stakeholder Support. When these five terms are mapped onto Bennett’s
pentad, they take on very specific meanings. For example, Values become
the very essence of what a business is at its heart. It isn’t the products,
the profit, the market share, the technology or the CEO. It is the values that
can be used to describe the essence of what a business is all about. Many
companies pay lip service to values, and have a litany of values that hang on
the wall and look nice. However, if we think of values as the very essence of
what the business is about, we would be careful in how we articulate them
because of their importance in defining the business
Obviously
different members of a business will hold different personal values that will
guide their behavior either consciously or unconsciously. The challenge for
the leader to coalesce these individual values need into a short list of
values for the whole business. Each member should adopt these values along
with their own as long as there are no conflicts.
The leader needs to be a role model as regards business values for the
rest of the organization. This means that his/her behavior must be aligned
with the stated values of the business or else the values will be seen to be
meaningless. For this reason, the leader has a key stake in what the list of
values will be. If the leader unilaterally declares what the values of the
business are, he/she may find himself in conflict with a portion of the
organization. Consequently, when developing or changing values, a process of
consultation is desirable.
The
Vision becomes an articulation of what the business could become as
accepted by internal stakeholders. Clearly it should be
living out its values. The leadership
of a business plays a critical role in establishing what the vision for the
business is. All together too often a clear vision is not articulated, but is
the unstated interpretation of management’s actions. This is to say that
there may be a defacto vision whether it is intentional or not.
Often times it is the status quo that calls for very little growth in
performance. Developing a clear vision statement is an opportunity to
challenge the organization to grow toward its potential.
The
Mission becomes a statement of the value being provided to society by
the business. It is its statement of higher purpose. This is what is most
visible as an outcome of the business realizing its potential. At that point,
it will have achieved a level of mastery in serving society by meeting the
needs of its customers.
The
mission of a business is its reason for being. The mission may be clearly
understood throughout the organization or it may be quite vague at all levels.
It is a wonderful thing to have a sense of mission in one’s life. It brings
forth passion to succeed. Similarly with a business. A mission shared by all
employees is critical to the business reaching its potential.
Capturing
that sense of mission in a mission statement is not an easy task, but well
worth the effort. Again, the process of doing that should result in a shared
understanding of what the words mean. Words have different meaning to
different people or in different situations.
Process
Regeneration focuses back on the
business’s internal operations. Clearly, a business must have highly
efficient and effective processes if it is to realize its potential. However,
in today’s fast changing world this is not enough. Processes must undergo
regeneration continuously if the business is to operate at potential on an
ongoing basis.
What
do we mean by process? We define process as any activity, which causes
material or information to change form into a desired outcome. This definition covers both the production of widgets and the
preparation of a report. It also
covers the conduct of a meeting as well as many daily routines.
All of these processes bear on the performance of an organization and
determine whether it is reaching its potential or not.
One
approach to upgrading a process is called process mapping. This involves
representatives of everyone touching or touched by a process working together
to document in detail the steps necessary in carrying out a process. It may
sound easy but is actually difficult to do; especially the first time. Apart
from gaining a better understanding of the process being mapped, participants
learn how to apply the method to their day-to-day routines.
To
be efficient, a process must waste a minimum of time or material in its
operation. To be effective a process must deliver an outcome that fully meets
the criteria that have been established based on the needs of its
beneficiaries. That of course is easy to say and difficult to do, but not
impossible to do.
A
business has three primary Stakeholder groups: owners, employees and
customers. For a business to reach full potential, each group must be
supported in realizing their assigned role. This is not easy to achieve,
especially since these groups compete amongst themselves for benefits from the
business.
For
example, the profit achieved by a business could be used to increase the
compensation of employees, to lower prices for customers or to pay dividends
to owners. The business will achieve greater loyalty from each stakeholder
group by sharing benefits where possible to maintain a balance.
This
mutual dependence can be better understood as follows. Owners need to ensure
that employees and customers remain loyal, just as it is important to the
employees that the owners and customers remain loyal. Although it might not be
obvious, if the business is a good supplier, it is in the best interest of the
customer that owners and employees remain loyal. In an ideal world, these
three groups would all collaborate to insure that an appropriate balance is
maintained. In the real world, it is up to management to recommend or take
appropriate action to ensure an equitable balance is preserved.
This excerpt summarizes
the five key elements that are important to a business for it to realize its
potential. A more detailed discussion of these elements and their interactions
can be found in the book, “Capturing Business Potential.”
The author, James Patton,
is an international management consultant and president of Patton Associates,
Inc. He has 47 years of
management experience and has assisted executives in companies such as DuPont
and Vertex, Inc. He is the author of the books Capturing Business Potential
and Patterns of Meaning. His web
address is http://www.pattonassociates.net/
