These three overlapping circles aren’t the only themes to cover when it comes to the art of business, but they provide a great frame when we’re looking at the human side of our businesses.
Profit is usually the first – and, unfortunately, only – objective that many people focus on when building businesses. It’s an important information point, but business can be so much more. In a corporate capitalist system, though, it make sense for executives to worry – an investor’s primary concern is profit, so the executive must play that game if she wants to keep her job. We get to play a different game in small business.
Businesses also have impact, whether that impact is specified at the customer, employee, owner, societal, economic, governmental, or global level. Business is the primary driver of social change in the 21st Century. If we so chose, we can divert the surplus created from the efficiencies of technology and the science of business into social profit as much as we can individual profit.
You might not like Fun as a main theme – you may prefer values, principles, personality, alignment, or so on. It so turns out that infusing fun and happiness as part of the process of business rather than a secondary outcome of business makes it easier to achieve the other two themes. Cultivate fun and happiness in the work and it’s much easier to deliver happiness as a product of the work. (Don’t like fun? Sub in whatever word from that list above you want. You should get to the same end of happiness – the flourishing brand of happiness, not just the ephemeral affect of happiness.)
That sweet spot in the middle is where the stuff of building and maintaining great businesses is. (Click to tweet – thanks!) Why?
A business that lacks sufficient fun is one in which all parties involved merely use the vehicle to get whatever else they want. The humans “in the machine” do whatever they can to spend as little time in there as possible.
A business that lacks sufficient profit is a volatile, anxiety-ridden place where people are scared to fail and, thus, learn the best lessons of life and business. It also can’t deliver on its big vision – it’s much safer to get a single than swing for the fences. In time, playing small becomes the team’s or culture’s mindset.
A business that lacks sufficient impact has a hard time thriving in the rich later stages of businesses. It’s akin to riding a moped – it’s all fun to ride but you don’t want your friends to see you on it.
As if finding that right balance weren’t hard enough, businesses have an annoying tendency to shift along the axes through their different stages. They get more complex in some dimensions and simpler in others. What was fun yesterday is old today. Activities that were profitable in the past lose their return. Setbacks on fulfilling the vision pulls focus away from impact.
Further adding to the complexity is that it’s the dimensions of impact and fun that make our businesses so different. Take a similar set of economic ingredients, add different people to it, and you get dramatically different business. You get Microsoft versus Apple. In small and micro business, you see one person who thrives being a solo and another who thrives with a team. One may have a hyper-profitable business with a smaller scope and human footprint; the other may be less profitable but have a larger scope and human footprint. Neither is intrinsically better than the other.
Steering a business through that sweet-spot of convergence is no easy job – the winds go one way, the current the other. Being a good executive, no matter the size of business, requires an odd combination of delicacy, attunement, vision, delusion, and willpower. It’s a skill that takes a lifetime to master, so don’t worry – you’ve got time.
John Falchetto says
Thanks for this great take on the Hedgehog concept. We need to think differently and this entails looking at impact and including FUN.
Now, off to run this diagram on my business model.
Great post. I think of “creative spirit” for the fun category–but fun is good too. I use similar elements when deciding on new clients/projects/opportunities, but it’s really nice to have this wholistic frame for our whole business. Also, I like the reminder that we’re constantly recalibrating (and often out of sorts) because the work, the people, the models are not static! And one circle not here: “Learning/stretching/growing” is a circle for me – close to “fun” but not exactly.
@JanetGoldstein Thanks, Janet. I love that you added “learning/stretching/growing”, too – for me, as a learner, it’s in the Fun category, but it may not be that way for everyone.
Interestingly, it could also be put in profitable – being one of the best at what you do gives you a competitive edge, and stretching increases your businesses capabilities. Knowing you, though, It seems closer to “Fun.” 🙂
Max Bumisanti says
Ahhh, I keep coming up against this diagram, this is like the 3rd time in as many months. It’s high time to start applying these principles to my own business model