We’re excited to share this special guest blog post written by Acumen Partner Trace Thurlby, President of The Global Orphan Project. He is a distinguished United States Air Force Academy graduate, holds an MBA from the Katz Graduate School at the University of Pittsburgh, and is a CFA charter holder. Trace’s passion is to support his team in applying best practices to help care for local children and families in crisis from Kansas City to Kampala.
I don’t like wobbly stools. I think my issues go back 30 years to my days in the military. Part of a two-day interrogation simulation involved hours of sitting in a small, dank, dark room on – you guessed it – a wobbly stool. It was annoying and, after enough time passed, even unsettling. A good stool needs three legs (at least). Each must be strong enough and long enough to hold its share of the weight and keep things balanced. So it is with excellent organizations whose prospects sit on a stool with the three legs of a superior product or service, a healthy culture, and a strong financial model.
A Superior Product or Service
Excellent organizations have a product/service the market believes meets one (or more) of their needs/wants better than the alternatives. That’s a mouthful. Here’s a simplified version:
If you aren’t solving a problem for your customer or adding value in a meaningful way (better than others), you’re in trouble.
Without a superior product or service, you’ll be counting on people to buy your product because they like you or, even worse, because they feel sorry for you. That’s the making of a wobbly stool.
Of course, there’s more to the value proposition than just the product, which is the first “P” in the “4Ps” of the marketing mix. Price, Promotion, Place (Distribution) are the others. If you have the time, money, and interest, MBA programs would be happy to elaborate, or you can just Google “The Marketing Mix.”
A Healthy Culture
The second leg of the stool, a healthy culture, is essential to attract, retain, and develop an excellent team. Healthy cultures exude mutual respect. Vision is cast. A compelling mission unites. Values established. Clear expectations and goals are set. Communication is essential. Employees feel heard. Results are measured. Accountability exists. Leaders ask good questions and are willing to deal with bad news.
The organization invests in training, celebrates success, and makes the right decision the right way, even when (especially when) it’s difficult.
Sports announcers often talk about a “culture of winning.” I’m a KC Chiefs fan. Watch Coach Andy Reid, Patrick Mahomes, and Travis Kelce interact. It’s easy to tell when “colleagues” like each other. It’s not a stretch to think those men actually love one another.
Culture is as important to businesses or ministries as it is to sports franchises or government administrations. Drive-thru a Chik-Fil-A, and you’ll know their employees are well-trained and understand their roles. Pull out your iPhone and appreciate that Apple is the innovative market leader in the competitive industry of technological solutions. Peter Drucker is often credited for saying, “Culture eats strategy for breakfast.” Anyone who has felt the tailwind of a healthy culture, or the headwind of a poor one, will testify to how true that is.
A Strong Financial Model
The third leg is a strong financial model. A person can have a great idea or even a great product…a group of people can work well together…but if their efforts are not underwritten by a financial model that produces margin, scale, and transparency, growth will eventually be constrained by a lack of resources.
Don’t run out of money is the first rule of budgeting. Leaders who have been at the helm during a crisis appreciate the saying, “Cash is king.” As with the other two legs of the stool, courses have been taught, and books have been written on this topic. Concepts like diversification, seasonality, and capital structure are nuanced, dynamic, and critical to a strong financial model. Recognizing that and keeping it simple:
Organizations whose financial models produce a healthy profit margin can scale (grow) and, with transparency (predictable for their team and easily understood by the market), have a significant competitive advantage.
Superior Product. Healthy Culture. Strong Financial Model. These concepts can’t be unpacked on a page. That said, hopefully, the three-legged stool model provides a helpful framework.
Regardless of the industry, I love studying and learning from organizations that have “Winning Stools” built well enough to bear increasing loads year after year. Analyzing case studies and current events is worth the time. Still, experience tends to be one of the best instructors.
I have been blessed to work in a variety of organizations: the military, a publicly traded company, a start-up, and a non-profit. Each has had a measure of success. None were without challenge. In every case, the stool wobbled at times, and those wobbles can be unsettling. However, if, as leaders, we see those wobbles as evidence that one (or more) of our stool’s legs need attention, we take an essential step to making our organizations excellent.
April 6, 2023