The Three Legged Stool of Profit and Growth

The three-legged stool offers the advantage of stability on any surface, and the risk that if a single leg fails, the stool collapses. To accelerate profit and growth, we rely on three “legs:” Framework, Ideas and People. When all three legs are present and functioning well, companies can accelerate profit and growth.

The analogy of the three-legged stool has been around for a long time, although its origins are unclear. Some attribute it to sixteenth-century theologian Richard Hooker, who was supposed to have compared the relationship between scripture, tradition and reason to a three-legged stool.

profit growth circlesFramework: Answering the Questions, “Where?” and “Why?”

The Framework leg looks toward the future and provides a roadmap to lead the company toward the vision set by company leaders. Many leadership experts suggest that employees are more likely to get on board with change when they know both where they’re going and why. A clear framework creates effective followership and better execution.

For executives, getting up on the mountaintop to survey the countryside leads to more effective strategy and superior results. Companies who lack a framework are wandering in the wilderness, hoping for results but never attaining them.

Ideas

The second leg of the stool is Ideas. Being able to introduce new, disruptive ideas is critical to dramatically accelerating profit and growth. These ideas come from the management level just below the executive team. I refer to these people as the innovators in organizations because they sponsor new, inventive ideas ranging from Lean to partnerships and more. They’re the people who drive change and keep it on track, bridging the gap between executive visionaries and the people on the front lines. Without ideas, a company is like a stalled engine and nothing gets accomplished.

People

People are the third leg of the stool. Whether they come from inside or outside the organization is a key consideration, and one that’s often overlooked. Outsiders can bring in new thinking and fresh ideas that may not be available within the organization, which is often why companies hire consultants. You can certainly educate and develop your own people, but the time it takes may cost the competitive advantages of acceleration.

Internal skills can provide the advantage of sustainability. A balance of internal and external resources can provide significant lift to the rapid instantiation of ideas and change. In either case, the framework and ideas used to accelerate profit and growth need to be personalized to the staff involved in order to be accepted and sustainable. One client achieved dramatic results in just six months by using external resources, internal leadership and by bringing the first line people on board early in the change process.

Management should carefully consider the balance of internal and external resources to be sure that change lasts. Let’s look at an example of what not to do. A hypothetical company brings in Six Sigma Black Belts from outside the department, who, in this worst-case scenario, push people aside to make the needed changes, and then leave. The remaining employees don’t understand the whys and hows of the change – they lack an effective framework – and the change quickly erodes, returning to the way things were before, but now having wasted essential time. Without the right people, wherever they come from, there is no traction for profit and growth acceleration.

From the Flight Deck

Balance is critical to lasting change. A well-balanced stool comprised of Framework, Ideas and People can sit solid even on the shifting ground of industry and economic variations. The humble three-legged stool transforms into a flying carpet racing toward profit and growth.

© 2015 – Rick Pay – All Rights Reserved