Skill and Will

Once purpose has been elevated, specified and integrated the next step is to consider the skill and will of the people within the company. It is important to ensure the right people are in place and the mix of people is appropriate.

This brings us to the first sub-blade of the People blade in the Windmill Theory within Powered By Change (PBC), which is Skill and Will. In essence, this is about the ability of people within the company, in particular leaders, to identify opportunities for business growth and ensuring there is the willingness and processes in place to enable these changes to be implemented.

That is, Skill and Will reflects how the company goes about getting inspiration for opportunities once it has elevated its purpose and views the business with a clear understanding of the main thing. Then how it executes upon these opportunities. This is a key reason why the People blade is adjacent to the Purpose blade. And likewise why it is also adjacent to the Product blade. Without the right people in place to make decisions to enact the company’s purpose, the purpose will not be fulfilled. Similarly, the right people are needed to identify opportunities for innovation and enact these through the development of products that reflect the company’s purpose. 

The Skill and Will sub-blade is not an annual ‘tick and flick’ exercise or performance review. At its core, Skill and Will is about understanding whether the company has team members with the ability and desire to execute the company’s purpose. As well as the overall distribution of team members across the Skill/Will matrix to understand if the company has sufficient leadership and people who are willing to learn, if there are actively disengaged people that could be re-engaged, and not too many people that are the wrong fit for the company. The focus is on the attitude, mindset and alignment. It is these things that ultimately manifest throughout the company to create:

  • A culture of curiosity about inter-industry innovation
  • A willingness to test, learn and improve
  • An impetus to actively engage in innovative activities 
  • The disposition toward change, i.e. resist or embrace
  • The lens through which decisions are made that determine company success or failure.

This is the spirit of the people needed for the company to succeed and thrive, particularly in times or perpetual change. Therefore, having the right people in place is crucial. 

In regard to Skill, this is referring to the ability, experience, understanding and knowledge of people within the company. Whilst Will refers to the attitude, desire, alignment and engagement. It is possible to move from either no or low skill/will to high skill/will and vice versa. Personally, I’d rather have people at the company that may not have the most skill but have a willingness to learn and the desire to try over people who are highly skilled but just not interested or have a really bad attitude, i.e. the brilliant jerk. This is because there is disengagement and misalignment which, as has been discussed in previous articles, impacts on productivity that translates to lost revenue and profit. The willingness to try is, to an extent, more important than ability or skill longer term as skill can be improved. Whereas it can be much harder to actually change someone’s attitude or mindset, although it’s not impossible and is worthwhile trying to do this through alignment. Therefore, there is a dire need for people that will consistently try. They don’t need to consistently win and succeed but they do need to be willing to learn and have that effort metric. 

As the pace of change today is as slow as it ever will be, and the only real certainty is that things will continue to change, ensuring there are people in the company who are willing to change and use change as a fuelling mechanism is essential. It is often the problem in the willingness to change that has led to many companies going under. Some examples of where this has occurred include Blackberry, BHS and MySpace. According to the Association of Insolvency and Restructuring Advisors, over ¾ of bankruptcies are attributable to management decisions, or lack thereof in the face of change. This illustrates the importance of ensuring the People blade is operating effectively. This is paramount to ensuring perpetual success. In fact, having the right people in place ultimately determines the company’s ability to respond to change. As the pace of change is only going to increase, this ability and willingness is absolutely required.  

Within PBC, one of the tools used to assess Skill and Will is the Skill/Will Matrix, which is the below 2 by 2 grid that plots skill level and will level or people into the 4 quadrants:

There are 4 quadrants into which the people within an organisation can be mapped to see the distribution across the quadrants. People who have skill and will should be in a position or have some ability to lead, even at a matrix level rather than hierarchical. If there are not enough leaders or too many leaders the outcome is confusion and lowered productivity. Likewise, if people with the ability and desire to lead are not given the opportunity to do this they will likely become leavers and go to your competition where they can lead. People who have no or low skill but have will are learners. These are people that should be nurtured and given opportunities to learn to develop their skills and progress within their careers to eventually become leaders. Again if they are not given the opportunity to learn they will also likely become leavers and go elsewhere. People in the lead and learn quadrants are engaged. That is, they believe in and align with what the company is doing. These segments are 50% more productive and 33% more profitable than those that are not engaged. Therefore, it is definitely worthwhile from a financial perspective to provide learning, growth and leadership opportunities to retain them. 

People with no skill and no will should be avoided. Largely because they don’t have the desire to learn. Having too many of these people can create a toxic environment so its important to manage people in this quadrant ethically but ultimately there is probably not a place for them within the company. Finally, those people who have the skill but are lacking in will fall into the ‘potentials’ quadrant. This quadrant is usually representative of people who are actively disengaged due to a lack of alignment with purpose, either theirs to the company or the company to theirs, or unengaged as a result of a lack of clarity of purpose or limited leadership within the organisation. Statistically, this quadrant accounts for approximately ⅔ of the workforce globally. It is possible to create alignment and move them into the learn or lead quadrant which costs the US economy $350 billion annually so it is definitely worthwhile. 

In terms of trying to re-engage those in the align quadrant, the below 5 steps can be used:

  1. Establish most understandable way of communicating mission
  2. Speak to the people about what resonates with them in their life 
  3. See where there is potential overlap for the company’s mission to empower their personal mission 
  4. See where there is a potential overlap for their desires to fuel the company’s mission
  5. If no alignment is possible, attempt to learn from them as much as possible.

Failure to do this is essentially leaving ⅔ of profit on table and ⅔ of market share at the door.

In the PBC toolkit, thresholds have been identified to optimise the balance between each of these quadrants and solutions are provided to rectify imbalances. Likewise, within the toolkit the assessment can be conducted at the lowest granular level, i.e. each person, and then roll-up to the team, department or company level. 

Remember, the difference between success and failure is how we respond to change. Its the willingness and ability to make decisions to embrace and use change rather than resist it. To do this though requires having the right people in place. In light of the significant financial impacts of having the wrong people in place, it makes sense to regularly monitor and review how the company is performing in this regard. The PBC solution provides the ability to do just that to ensure ongoing success, especially in times of change. 

Key Takeaways:

  1. Skill and Will reflects how the company goes about getting inspiration for opportunities once it has elevated its purpose and views the business with a clear understanding of the main thing.
  2. The willingness to try is, to an extent, more important than ability or skill longer-term as skill can be improved. This manifests in an unwillingness to change, which is a problem as the pace of change will only accelerate in the future. 
  3. Many companies have gone under due to the in the willingness of leaders to change. 

For more information on how the PBC solution can help your business feel free to get in touch, we would love to talk with you, at:

info@poweredbychange.com

The People Blade

The second blade of the Windmill Theory within Powered By Change (PBC) is the People Blade. Although the blades are not sequential, but rather, inter-related and interoperable, it makes sense that once the company’s purpose has been identified, the right team of people are in place to be able to execute this through the creation of resonant products and supportive processes. This enables the entire windmill, and indeed the company, to operate optimally. 

There appears to be an almost universal mantra espoused by many organisations that its people are its greatest and most important asset. It is frequently used for PR and marketing purposes so much so that it is becoming quite literally meaningless. Sadly the reality appears to be the proposition people are the most important asset is more lip-service than what actually occurs. There are numerous examples of dubious employment practices, zero-hour contracts, forced workplace agreements, minimum and living wage bands, broken supply chains, employment contracts heavily weighted in favour of employers that contradict the idea of people being the most important asset. In fact, there is a lack of investment and underinvestment in people. One particular first-hand experience was an instance I witnessed where an employee was told the company was not going to pay for a course they needed for their role. The justification given was that the only reason they’d need the qualification was if they were going for a job with another company. This is in stark contrast to the company’s tagline of putting people first. Indeed it is a contradiction in terms that people are even referred to as human ‘resources’. This terminology inherently implies that people are essentially no different from any other organisational asset. 

It is important to define what is actually meant by people and the underlying premise of the People blade. Within PBC, people are not relegated to simply being an exploitable commodity. Likewise, the People blade is not focused on how an organisational chart should be structured or what ‘roles’ are needed. Rather, it goes much deeper than this superficial overture. The People blade is really about the mindset, attitude or behaviour and curiosity of team members to innovate and adapt to change. It underlies the fundamental essence or fabric of how decisions are made that either lead to success or failure. 

To this end, the definition of people that we are talking about is around how the purpose of the leaders, managers and team members who make decisions that cumulatively dictate whether the company thrives and survives or dies in a time of perpetual change is held together. It is about the management, mindset and moulding of those people together around purpose and how they interact with the resonant purpose in the organisation and thereby become more profitable, effective and efficient. It’s super important. 

The Association of Insolvency and Restructuring Advisors have identified the key reasons for businesses going bankrupt. The distributions are:

  • 52% are due to internal issues, specifically management decisions 
  • 15% occur due to external triggers 
  • 24% arise due to internal and external factors that management don’t do anything about
  • 1% occur due to bad luck and 
  • 8% are due to things completely outside the company’s control.       

The fact that over ¾ of bankruptcies are attributable to management decisions, or lack thereof, illustrates the importance of ensuring the People blade is operating effectively. This is paramount to ensuring perpetual success, particularly in the face of change. In fact, having the right people in place ultimately determines the company’s ability to respond to change. If a company can create an effective People blade, with the right team in place it is possible to create resonant products and develop effective processes that lead to improvements in the bottom-line. 

If the People blade is under-performant, this leads to issues with productivity. This occurs as a result of a number of factors, including: 

  • Having the wrong people in place
  • Lack of leadership
  • Misalignment between skill and will
  • Little alignment to purpose and
  • Limited or no innovation.

The culmination of one or more of these issues is reduced revenue and profitability. 

Within the People blade, there are three sub-blades which are complementary and equally important. These are:

  1. Skill and Will – identifying whether the company has team members with the ability and willingness to execute the company’s purpose. 
  2. Productive Paranoia – understanding what could fundamentally disrupt the company.
  3. The Paradox of Exploitation and Exploration – ensuring the company is innovating whilst continuing to exploit existing assets.

For the People blade to be truly effective all three sub-blades need to be considered. 

Remember that change is the only constant, and the difference between success and failure lies in our response to change. Therefore, it is essential the right people are at the helm with the curiosity, desire and willingness to embrace change rather than resist it. Right now this is more important than ever as the global economy is transcending into continually changing unchartered waters. As the winds of change are blowing right now there has never been a better time to embrace them. However, this requires that the People blade is optimised to be able to leverage these changes to identify and capitalise on the opportunities presented. The PBC solution provides the necessary tools to ensure this is achieved. 

Key Takeaways:

  1. The People blade is about the mindset, attitude or behaviour and curiosity of team members to innovate and adapt to change.
  2. Over ¾ of bankruptcies are attributable to management decisions, or lack thereof, which illustrates the importance of ensuring the People blade is operating effectively.
  3. it is essential the right people are at the helm with the curiosity, desire and willingness to embrace change rather than resist it. 

For more information on how the PBC solution can help your business feel free to get in touch, we would love to talk with you, at:

info@poweredbychange.com

me@jonathanmacdonald.com

Integration Inside Purpose

Integration of purpose refers to how well all stakeholders across an organisation understand what it is the company exists to do and how it does this. That is, the extent to which the specified purpose infiltrates everything the company does. Integration is the third sub-blade or component of Purpose and should be completed after Elevation and Specification. It is the final requirement needed to ensure the Purpose blade is effective and optimised. Once our elevated view of our main thing has been specified into tangible terms that people can understand, it needs to be integrated across the organisation. This is a core component of the Powered By Change business modelling tool.

All parts of the company need to be integrated with the specified purpose. This is vitally important for the success of a company because it is through integration of purpose that alignment can be achieved. This includes alignment of people with the company’s purpose, which leads to engagement. In past pieces, I’ve mentioned the significant impact that employee engagement has on profitability so I won’t repeat that salient point here. It also includes alignment of products and services provided by the company to its purpose. Finally, processes need to be defined in such a way that they can enable and support the company in executing its purpose. There is a ‘flow-on effect’ to all other blades within the Windmill Theory. Failure to integrate purpose throughout all supporting mechanisms will have a flow-on effect of suboptimal performance. This is due to the fact that purpose is a key driver of business success. 

In terms of measurement of integration, this is essentially the proportion of the people at the company that truly understand, embody and align with the specified purpose. Ultimately, integration helps to clarify what good looks like. A great example of an integrated purpose is McLaren Technology. Everyone at the company from cleaners to engineers and designers to executives know that they are in the business of accelerating performance. Another example is Under Armour which is a global sports apparel organisation that has nailed the Purpose blade. The vision statement is” “Empower athletes everywhere”. The mission is: “Make all athletes better through passion, design, and relentless pursuit of innovation.” Under Armour has explicitly declared what it is for, what it aims to achieve and how it goes about making its vision a reality. In addition, the company has established its four pillars or greatness in addition to a “4 Wills” pledge that all employees take. Both of which clearly outline what good looks like which is communicated throughout the company. Everyone has clarity and knows the direction of the company. 

In this way Under Armour has effectively integrated its main thing in practice. Clearly this approach has been effective for the company in terms of financial performance. Its profit per employee is approximately $300,000 and in the decade after floating on the stock market it achieved growth of over 2000%. This is what the impact of a Purpose blade looks like when it’s integrated.   

Unfortunately, this is something that many companies overlook. Although given the importance of purpose to the bottom-line it is not clear why any company that wanted to achieve ongoing, perpetual success would not ensure purpose is integrated. Likewise, integration of a specified purpose could be seen to be something that maybe HR needs to do. However, that’s not really optimal. Integration of purpose requires more than an HR policy, or a tagline or a memo. It needs to become part of the company’s DNA. Once this is achieved you will have people that truly believe in what the company is doing which significantly enhances success.

Within the PBC solution, there are tools available to identify how well purpose is integrated and to solutions provided to help with integration to help you design your company for ongoing success.  

Key Takeaways:

  1. Integration is the extent to which the specified purpose infiltrates everything the company does. 
  2. Integration of a specified purpose helps define what good looks like. 
  3. As seen with the Under Armour example, having an integrated specified purpose that reflects the elevated purpose can seriously improve the financial performance of a company. 

For more information on how the PBC solution can help your business feel free to get in touch, we would love to talk with you, at:

info@poweredbychange.com

me@jonathanmacdonald.com

Specification Inside Purpose

Specification is the second sub-blade of the Purpose blade that is outlined in Powered By Change (PBC). Once we have elevated to discover our main thing, we need to specify precisely what our main thing has the purpose of doing. The reason for specification is to communicate the elevated purpose of your company in order to equip it with qualities that enhance its agility and ability to respond to change. It is worth thinking about whether you are doing this with your business. If not it is probably a good idea to start as there is a direct, empirical link between a company’s ability to specify its purpose and its profitability. In fact, establishing purpose is one of the highest drivers of success.

High performing companies demonstrate a strong sense of a clearly specified purpose that propagates through shared values across the entire organisation. They also have a well-defined mission that depicts the reason that the company exists and which inspires people to join them. This is the reason why such companies win. An excellent example of a company that knows exactly what it is doing and why is IKEA. Its mission statement says: “Our vision is to create a better everyday life for the many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.” This is one of the reasons for IKEA’s success. Their mission is what it enables as an outcome for its customers. 

Specification is the method of establishing the company’s elevated purpose. It is linked to the company’s inherent skills, enjoyment and value creation. When specifying purpose start by completing the following three steps:

  1. Identify what your company loves to do.
  2. Identify what your company is great at doing.
  3. Identify what your company can add extreme value by doing. 

The intersection point is what is being enabled for the end-user. This is essentially the mission and there is a way to express this that enables the elevated purpose to be executed. The  specification technique is a way of finding the best combination of the holistic and the practical. As an example, imagine a company that makes loft ladders. This company could think it is in the loft-ladder business, or in the ladder industry, or in the accessing lofts market or even the house utilisation industry. The holistic and practical approach can be applied to specify how this is manifested. 

Firstly, look at the elevated purpose in the most holistic way, which is the  maximisation of space. Secondly, we then turn to the practical in order to give our purpose focus and direction, and in this example “the maximisation of space” could be specified as “maximising space in people’s homes.” The benefit of the specification is that people understand the business they are really in, and also their role inside that. If you then wanted to execute your elevated, specified purpose in the most practical ways, you can now see that you would be able to get involved with what happens under people’s beds, and what happens under floorboards, or what happens inside people’s rooms in terms of dimensions, or what you could create with bi-folding doors, and on it goes. Elevation properly defined using specification opens up the opportunities from just being in the loft-ladder industry, to absolutely practical ways of maximising space in people’s homes more generally.

Not only is it important to understand how to specify purpose. It is important to understand why you would want to in terms of business impact, aside from that mentioned above. Profitability is the primary measurement used globally by businesses and specification of purpose has an important impact on that. In terms of profit and revenue increases, over 11 years an average company sees a rise of 1% in profit and 166% in revenue. Whilst an exceptional company experiences an increase of 756% in profit and 682% in revenue for the same timeframe. The reason for this is that an exceptional company has a purpose that is clearly defined and that its people believe in. Where such belief exists there is also greater alignment and employee engagement. The upshot of this is a significant increase in productivity and ultimately revenue and profits. This is directly linked to the fact that engaged employees are 50% more productive and 33% more profitable than their peers who are not engaged or actively disengaged. In the UK alone, the cost in terms of lost productivity to organisations is $35 billion per year from workers that are not engaged or disengaged. This figure is $350 billion for the US. This alignment and engagement is down to how well purpose has been specified. There is a clear, empirical argument that purpose is one of the highest drivers of business success.       

Another benefit is that by specifying what our purpose does, we focus managers and employees on key objectives, avoid becoming waylaid by ideas or initiatives that are too niche or sideline projects, and remain alert for opportunities occurring in what we have defined as our “swim lanes.” Specification can therefore almost be part of a company’s compliance. If an organisation is doing something that, on reflection, does not correspond with its stated specified purpose, then that action probably needs to stop. 

Within the PBC solution, we provide the tools needed to ensure the creation of a specified purpose that is aligned to the elevated purpose. Given the significant financial implication that failure to specify purpose can have for a company, it makes sense to ensure this is done.

Key Takeaways:

  1. Specification is the method of establishing the company’s elevated purpose.
  2. There is a direct empirical and mathematical link between organisations that have a clearly specified and resonant purpose and a company’s bottom-line and profitability.
  3. Establishing purpose is one of the highest drivers of success.

For more information on how the PBC solution can help your business feel free to get in touch, we would love to talk with you, at:

info@poweredbychange.com

me@jonathanmacdonald.com

Elevation inside Purpose

In clearly defining and understanding your purpose the first consideration is elevation. That is how you can elevate your purpose. Before doing this, however, you need to identify what you are truly in the business of doing. Within Powered By Change (PBC), the first sub-blade in the Purpose blade is Elevation. It is the first for a reason. If a company is not able to elevate then it is absolutely limiting its ability to innovate and adapt to change. This is really about finding the higher perspective of what the company is truly in the business of doing and utilising this view to survey the landscape for new, exciting and unexplored opportunities.

To give some concrete examples of an elevated purpose and potential opportunities arising from this will help to provide context and understanding around what could be seen as an obscure or difficult concept to grasp. Firstly, one could argue that Google isn’t in the business of providing a search engine. Rather, its elevated purpose is to organise the world’s information and make this accessible. Taken from this perspective it is easy to see how Google has launched Google Travel as an online travel agency, moved into the smartphone market and are offering financial services amongst other things. In relation to Google Travel, the result of this is that companies such as Expedia, TripAdvisor and Bookings.com, previously some of the biggest Online Travel Agencies (OTAs), are now losing out to Google Travel as it is promoted in the first spot for hotel and flights searches in Google which is used for the majority of all online searches. As a result of elevating its purpose, Google is now unencumbered in regard to how it can innovate, diversify and change. Whilst some of the other OTAs are at risk of being disrupted altogether as they haven’t elevated their purpose beyond being in the business of providing OTA services.  

Interestingly, there are many companies that could elevate their purpose higher than they have and innovate far more than they do but they fail to do so. An example of this could be Wonderbra which I believe is really in the business of promoting self-confidence. Looking at what they do from this perspective, it is possible to start to see other opportunities or avenues the company could pursue that are outside of simply making underwear. For example, in light of the elevated perspective, the company could create an academy aimed at helping people develop higher levels of self-confidence. Another example is Nokia. If they were really in the business of connecting people they could have created something like Facebook which does just that. But they didn’t. Both of these examples demonstrate that if those companies elevated their purpose their opportunities for innovation would have increased exponentially and not have limited them to the business they thought they were in.

Once you elevate your purpose and truly understand what you do the opportunity for innovation and growth is almost limitless. In addition, you are no longer bound to the confines of the industry in which you currently operate. This provides the ability to be industry agnostic. It also opens up the space for competitive advantage as you will be operating in a space with few competitors but boundless opportunity.

Elevation is not a one-time exercise. It is highly unlikely that you will elevate to your higher perspective immediately. Instead, it will be an iterative process that takes deliberate practice and commitment to doing it. However, over time your ability to elevate will increase. As shown in the diagram below, an initial elevated perspective will probably be around point A on the curve where there is greater opportunity available but a large number of competitors.

However, over time as you practice and implement this more you will start to move upward along the opportunity curve through points B to E. At point E you will have reached an elevated perspective where opportunities are much greater and there are fewer competitors. This enables the creation of competitive advantage. By finding what it is that you actually do in a space with a lot of opportunity and few competitors is the point of elevation. Ultimately, it provides a positive impact on revenue whilst opening up many new opportunities for innovation to ensure ongoing perpetual success. Which is incredibly important especially in times of significant change.

In terms of actually going about elevating, there are 3 key steps to undertake:

  1. Describe what your company does without using the words you normally would.
  2. Apply this to other industries and consider where else could you add value, even if it would be outside of the industry you’re currently in.
  3. Identify what gaps or problems would be left if you stopped doing what you do.

The elevated purpose is then derived on the basis of these three activities. Failure to elevate will lead to lower success than what is otherwise possible, in addition to limiting the ability to innovate, transform, grow and adapt to change. This has a direct impact on a company’s ability to deal with disruption and change and increases the risk of disintermediation. Elevation needs to be practised continually. The PBC solution provides the tools needed to elevate and design your business for ongoing perpetual success, especially in such times of change. 

Key Takeaways:

  1. Elevation is what everyone inside the company is in the business of doing.
  2. The ability to innovate and adapt to change is directly proportional to the ability to elevate. If you are unable to elevate you are limiting your chance to grow.
  3. An elevated purpose is agnostic to industries and provides an unbridled potential to innovate. This creates a competitive advantage, improves chances of success and leads to higher commercial opportunities. 

For more information on how the PBC solution can help your business feel free to get in touch, we would love to talk with you:

info@poweredbychange.com

me@jonathanmacdonald.com

The Purpose Blade

The first blade of the Windmill Theory within Powered By Change (PBC) is the purpose blade. The reason it is the first blade is that the purpose of an organisation needs to permeate throughout its entirety and to essentially become its DNA in order for it to operate effectively. Arguably the term purpose has become overused and oftentimes misunderstood. Quite often purpose is portrayed as a tagline that is used in a PR campaign. More recently companies have been defining purpose in terms of a ‘social purpose’. Whilst noble and admirable, the existence of a social purpose doesn’t really translate into an organisation being able to clearly identify what it actually does. Rather this type of purpose is more a benefit provided of the company being in business and giving back in some way. The meaning of purpose within PBC is quite different to any of these connotations. It is actually something that runs inherently throughout the organisation to its core and is clearly understood by everyone. Purpose is really identifying the business that you are actually in rather than the business you think you are in. That is, what your main thing is that epitomises the value the company provides. 

The manifestation of purpose is an ability to pivot the business in multiple directions and create numerous income streams. This is important, especially in times of uncertainty and change as it provides an ability to hedge bets on success to achieve longevity. Have you ever looked at how some companies innovate in the most bizarre ways that kind of make sense and in which they are successful? Businesses that are able to do this are generally in a fairly established place of purpose. They not only understand why they’re doing what they’re doing and how but also why it matters and to whom it matters.

One such example of a company that has truly elevated its purpose is Harley Davidson. Aside from selling motorbikes, Harley Davidson have spawned a range of other product offerings from motorbike gear, retail outlets to cafe and hotel chains. Ostensibly, some of these things at first glance appear unrelated or unaligned to selling motorbikes. However, Harley Davidson isn’t really in the business of selling motorbikes, they are actually in the business of enabling the experience of freedom. When looking at what they do and how they do it from the perspective of the business they are really in, their ability to pivot and innovate to explore new opportunities such as this that they can execute and be successful in makes sense. Their willingness to elevate and integrate their purpose has given them an ability to create multiple income streams and hedge their bets for success. This is incredibly important in a time of turbulence and change as it means their opportunity to succeed is enhanced. This is something that any business can do if they are willing to.

Within the Purpose blade, there are three sub-blades which are complementary and equally important. These are:

  1. Elevation – understanding what business you are really in
  2. Specification – identifying how you can execute on your elevated purpose
  3. Integration – ensuring the purpose is fully understood and embedded within the entire organisation and that there is alignment to this purpose

For the Purpose blade to be truly effective all three sub-blades need to be considered. Having an elevated and specified purpose enables companies to pivot in times of uncertainty and to utilise the winds of change by looking at other innovative ways in which the company can innovate to survive. This is something that would be done regularly and in combination with the other blades of the Windmill Theory which is what enables such elevated companies to hedge their bets. It is important to note that simply having an elevated and specified purpose is not enough. Purpose also needs to be integrated throughout a company. It is this integration of purpose that creates alignment. Additionally, this is not a one time thing. It needs to be repeated and practiced. This enables a company to continue elevating, adapting and changing. 

The ramifications of failing to do this can be severe as businesses are left more vulnerable to the forces of disruption and disintermediation. Resulting in detrimental impacts to the bottom-line. Without a clearly elevated, specified and integrated purpose there will be a state of confusion. Meaning a lack of understanding of what the company is doing and why which directly affects productivity. If employees are confused about purpose or are not aligned to the purpose this leads to a reduced productivity and disengagement. Ultimately the impact is lost revenue. A clearly defined and resonant purpose is also important for attracting top talent as talented people want to work for companies whose purpose and value aligns with their own which creates a sense of engagement. Engaged and talented team members are more productive and help with customer retention and higher revenue. Failing to elevate, specify and integrate purpose is essentially leaving money on the table and increasing vulnerability to competitors. 

Following from this, if the company’s purpose is unclear and there is confusion how can the company create resonant and relevant products? The short answer is it isn’t really possible. When the products or services don’t align to the company’s purpose the situation will be such that there is little to no product-market fit and likewise little internal suitability. Also the ability of the company will be impaired in relation to being able to innovate and new and exciting ways as it is not clear what the company exists to do. If the products being offered don’t resonate, don’t make sense or don’t solve problems the outcome is a lack or revenue. Finally, if the purpose is unclear then it’s relevant processes can’t be created, implemented and executed which results in inefficiency and further negatively compounds issues of productivity.

Ultimately all of this impacts the bottom line and leaves potential revenue and unexplored opportunities on the table for competitors. When the Purpose blade isn’t properly effective the company is not setting itself up for perpetual success, especially in turbulent times such as now where the pressure of change to transform and innovate is immense. Having an elevated purpose is what enables companies to create resonant products that solve messes, ensuring there are the right team members in place who are aligned to the purpose and have the desire to create innovative products and strategies and to implement the processes needed to execute them. Purpose is vitally important as it permeates all the other Windmill Theory blades. When done effectively the end result is improved business performance, an ability to innovate and adapt to change to ensure ongoing success.

The enemy of a great company is a good company that is sailing along fairly well with a complacent attitude that things will continue as they have been. There is a reluctance to move out of that comfort zone. This is especially true when times are good. However, if you have failed to continually elevate your purpose and meaningfully integrate it whilst simply staying inside your comfort zone, there is the very real risk of being disintermediated and disrupted when times change. This is exactly what is happening globally now. The good news is that you do have the opportunity to start doing this now. If you choose to. Remember, the difference between success and failure is how we respond to change. There are gale force winds of change blowing right now and there has never been a better time to embrace them.

The hardest part is probably knowing how to do this. The PBC solution toolkit can help and has been used by many successful companies globally in the quest to elevate their purpose and use change as an enabler to accelerate their success.

Key Takeaways:

  1. Purpose is about understanding the business you are actually in, how you do what you do, why it matters and to whom. 
  2. The willingness to elevate, specify and integrate purpose is directly proportional to your ability to innovate and transform using change as an enabler.
  3. Failure to clearly define and understand purpose creates confusion which seeps through all other aspects of the company resulting in unproductiveness and inefficiency. This has a detrimental impact on revenue and profitability as well as leaving the company more exposed to competitors, disruption and disintermediation.  
  4. The only time it’s too late to start doing this is when the company no longer exists.

For more information on how the PBC solution can help your business feel free to get in touch, we would love to talk with you, at:

info@poweredbychange.com

me@jonathanmacdonald.com

Designing Your Business For Perpetual Success

Given the current global economic crisis that has been sparked from a health pandemic, the notion or idea that change is the only constant has never been more apt. In fact, the changes that are occurring are so rapid it’s like walking on shifting sands. It is our response to how we deal with such change that will make all the difference and determine our failure or survival. Ultimately, success is about how much we change and adapt whilst failure is about how much we resist and don’t change. This analogy is distilled succinctly in the proverb that “some build a wall whilst others build a windmill”. 

Despite the seismic changes that are happening right now, on a daily basis it is not all doom and gloom. The time is ripe for innovation, transformation, reinvention and using the changes that are occurring as a fuelling mechanism. Opportunity always exists in challenging times if we are willing to look for it and explore alternatives. Organisations that fail to adequately respond to change risk becoming redundant. There are many examples of this, with some of the most well known including Blackberry, Blockbuster and Kodak.  

Disintermediation, democratisation and disruption represent three of the biggest transformative changes. Many organisations are currently ill-equipped to deal with these. This has been clearly demonstrated in light of the recent COVID-19 pandemic, which has led to millions of job losses and large numbers of business closures. The reality is that many of the top businesses may not survive. However, their chances of success would be greatly heightened if they started to look at how they could change what they are doing and respond differently.

To enable this to happen, I have taken the cutting-edge methodologies of business performance and enhancement found within my bestselling book ‘Powered By Change‘, and translated them into an advanced business modelling tool that enables organisations to be designed for perpetual success. The Powered By Change (PBC) solution exists to empower companies to understand how effective they can be in adapting and responding to change, and indeed, use change as a catalyst for innovation and growth. The entire ethos is to provide a framework to design your business for perpetual success.

PBC is for companies and people in business who are going through uncertain times and, given that pressure of change, have the desire to do just that. Quite frankly, there has never been a better time to be powered by change and to utilise those changing forces to super-charge your business. The PBC solution is based on the principle of how we can use change as a fuelling mechanism rather than something to resist. This requires a framework to do this successfully.

In our perpetually transient business environment, it is widely considered (and predicted by consultants like McKinsey) that only one-third of transformational business strategies actually succeed. It can be very difficult to see accurately what is happening and how to efficiently interpret this and develop effective strategies that are executed successfully. This requires a “satellite navigation” system to undertake this effectively which is what PBC provides in the form of The Windmill Theory.

The Windmill Theory comprises four interconnected and interoperable blades, which are each composed of three sub-blades. The blades are:

  1. Purpose – is about understanding the business you are truly in and establishing deeply resonant purpose.
  2. People – is concerned with the curation of the most advantageous mindset and ensuring there is a willingness to test, learn and improve.
  3. Product – is aimed at the creation of the most powerful ideas and relevant product offerings that solve real-world problems and reflect the company’s elevated purpose.
  4. Process – is about the development of the most rapid and flexible processes and underlies every single part of the infrastructure.

For a company to optimally design the business for perpetual success, all of the windmill blades need to be operating effectively. It is possible to be succeeding in some aspects or blades whilst simultaneously being suboptimal in others. There can be significant impacts to the business and its bottom line, competitiveness and ultimately viability in instances where there is suboptimal performance.

As an example, approximately ⅔ of all employees are not engaged or actively disengaged, according to a Gallup Poll. In the US alone, lost productivity is about $350 billion per year. Whilst employees that are engaged and talented are a third-more profitable, create significantly higher customer loyalty and retention and are twice as productive. Although these figures relate to people, the engagement/disengagement conundrum is directly linked to how well the company’s purpose is specified and integrated. That is, how well employees align with, believe in and/or understand purpose. Ensuring purpose is specified and integrated throughout an organisation is vitally important and has significant strategic and commercial implications. 

Likewise, if you have employees who possess both skill and will they should be either in a position of leadership or given leadership opportunities. Failure to do this will see these people turn into leavers. More than likely they will go to a competitor where they are given leadership opportunities, which has financial ramifications for the company in addition to knowledge loss. Furthermore, if there is an imbalance within the company in regard to the skill and will levels of team members this leads to productivity losses. If there is a lack of innovation, no product or a product with a poor market fit (i.e. it doesn’t solve a mess), or the product isn’t highly resonant in terms of purpose; the outcomes include lack of revenue and even potentially bankruptcy. Finally, if processes are inflexible and difficult or the effort needed to achieve something exceeds the value received this creates inefficiency which costs companies money. 

The Windmill Theory and underlying principles provide a playbook to ensure that companies are established in the most optimal way to ensure they can embrace the opportunities offered when the winds of change are blowing. Whilst also assisting with ensuring the business reaps the strategic, commercial and competitive advantages of having the capabilities of purpose, people, product and process working effectively and avoiding the issues related to sub-optimal performance or one or more of these. 

Change is constant. With the right tools, you can use the power of change to unlock perpetual success. The PBC Solution provides a blueprint for companies to design their business for continuous success by enabling systems to be more effective by embracing and leveraging change as an enabler to supercharge performance. This provides the fundamentals to manifest into real-time tangible benefits for your company. This type of enhancement and enablement toolkit is needed now more than ever before. 

Key Takeaways:

  1. Our response to change is the difference between success and failure. We can choose to build a wall and ignore change, or build a windmill and embrace change.
  2. Even in times of immense uncertainty and change the ability to desire your business for ongoing success exists. It simply requires a willingness and an approach or process to do this.
  3. The PBC solution is really an A to Z of how a company can be enabled and improved in times of uncertainty and change.

For more information on how the PBC solution can help your business feel free to get in touch, we would love to talk with you, at:

info@poweredbychange.com

me@jonathanmacdonald.com

© Jonathan MacDonald 2020