“Cash is king” – We’ve all heard the phrase many times, and there is
no doubt that it’s a great maxim to adhere to in any business.
Lack of cash is pretty much the primary cause of complete failure for a business,
but 0n the opposite side, what is the primary cause of success? There are myriad books
expounding the secrets of business success – they cover topics such as leadership;
client focus; quality control; innovation – an almost never ending list that purports
to holding the key.
There are business students struggling through challenging MBA courses
trying to master all of the disciplines it takes to run a successful business.
Yet many businesses are still just struggling along. It seems that business
leaders are more stressed and confused than at any point in the preceding 100 years.
In my thirty plus years of working as an executive in global businesses,
I have learnt that there are really only two factors that matter fundamentally.
One is to manage the organisation with energy and discipline but the other,
in fact the single most important cause of success, is to manage context.
Managing context is the art of understanding where your business is right now;
what got you there; and what the forward trajectory is. You need to appreciate
where the likely path forward will take you, and where, if nothing changes,
will be the inevitable end point.
Fully getting to grips with where your business is also requires the assessment
of your competitors position. This constellation perspective, as if looking
through a telescope, will develop your view of how the systems that affect the
business are changing. A sense of distance allows you to maintain objectivity
about what is really going on and counters the typical human trait of being
overly optimistic about our own chances of success.
By understanding your place in the universe through this initial constellation view,
you can begin to create new possibilities based on whatever overlay you create.
What you are trying to discover is a map towards a future that meets your goals,
one that you can plot the journey to and that allows you to bring the rest of
the organisation along.
Whether you are running a small department or a major corporation,
this ability to be really clear about how you articulate your context means
a shared perspective and understanding can be developed for the entire organisational unit.
Steve Jobs determining that technology could be treated like fashion and
Blair creating a ‘New Labour’ movement to win successive elections are
examples of leaders shifting the context to achieve great success.
Many years ago the hallmark ‘Made in Japan’ gave the perception that the
product bearing this identifier may be cheap and nasty. The Japanese countered
this view by creating a context whereby they ‘owned’ quality. These new ideas
and maps are born out of a new context.
However, not all of us are trying to save the world, many of us would just
like to do a bit better for our business. This contextual approach can be
equally efficient whether the business is a local bookshop shifting to becoming
a community hub or an airline correctly predicting that pricing and punctuality
are all that a certain (lucrative) section of their market care about.
That many people will dislike the examples given is exactly the point.
A shift of context can create new desirability for a firm’s offering that creates or
magnifies new segments of the marketplace. At the same time it disenfranchises
those who have equity in the existing model. It creates as many believers as it
does non-believers. And that means your business has a distinctive place
in the hearts and minds of the market.
Cash may well be king, but context will always be kingmaker.