Throughout history the number three has proved significant in the fields of human knowledge, endeavour and culture. A basic maxim of one of the world’s oldest extant religions, Zoroastrianism, is ‘Good Thoughts, Good Words, Good Deeds’ – think good, speak good, act good. Or how about the Three Wise Monkeys? See no evil, hear no evil, speak no evil. The significance of the number three is worth a Google if you have the inclination.
Remembering things in ‘threes’ comes easily to just about everybody. A Holy Trinity is easier to recall than, say, a Holy Quaternity (four) or a Heptinity (seven). It’s even easier to say!
Throughout my career I have always sought to simplify in order to share what might be summarised as the ‘governing rules’ of making businesses successful. The principles I use are set out in the trinities below.
I also created Rubik’s Cubes (in mathematics ‘cube’ is the power of three…) to summarise company structure, roles and responsibilities because I heard myself, repeatedly, describe basic structure as “like a Rubik’s Cube”. And so it is.
My rules are not exclusively for the Boardroom – most, sometimes all, are even more valuable when understood companywide. An easy-to-remember lexicon to accompany the underlying principles makes it faster to get everyone on the same page.
For example, ‘miscommunication’ is a common source of catastrophes where what someone said and another heard turn out not to match. Deploying Rule Nº10 goes a long way to eliminating this by reminding both parties what an order/delegated task instruction must comprise.
I could pretend my ability to assimilate a business, identify the area(s) for attention and determine what to do is some sort of mystical power. But it isn’t. I have had plenty of practice – which of course helps, just ask a musician. My principles interrelate and they are numbered in the typical order I will work through.
Some of the most common difficulties I confront are insufficient sales, cash flow crises and staff problems. And the most common causes relate to direction, capacity (supply- or demand-side), process friction and capital. Roles are often poorly defined and expectations vague.
‘Over trading’ is common too – expanding rapidly without recognising the impact on liquidity and working capital. Why not recognised? Usually because there was no business plan that modelled the impact on capital at higher levels of supply and demand (Nº3). If we had done a plan together, we would have examined that under ‘Capacity’ in Rule Nº1. What often happens instead, is that a business hits a home run and the directors/shareholders extract their winnings …without realising that the bigger the business gets, the hungrier it becomes for cash. This accidental starvation can then lead to cashflow crises, reports of ‘insufficient sales’ and dissatisfaction with the team’s performance…
Whilst the Board’s ‘world view’ may be that their employees are the problem and the under-performers, the root cause will probably be in the Boardroom. This can be an emotive, thorny subject if ego is in the room with us but if we can instead focus objectively, I can do what a Chairman is supposed to do (and usually rather more). By helping and reinforcing the Board to direct more effectively (Nº4 to Nº8), the Board can make necessary corrections. Simple.
There is more about the trinities, and the trinities in action, throughout my web site. If you would like my help, please drop me a line.
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