The Simplicity of Business Framework
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Introduction
Sometimes understanding businesses can seem so overwhelming complex. When that happens, it’s best to break things down into their most universal elements…to find clarity and to solve problems.
Let’s start by considering businesses as fundamentally human endeavors, at their most basic level.
Over the years, I have found that if you start with the human element, you can build a universal model of business that is complete, timeless, and provides a sound foundation to add any level of complexity you desire.
To that end, we have created a Simplicity of Business Framework that seeks to define business at that human level.
This article describes this Framework, and how you can use it as a sound model for understanding business, and hopefully help you manage the complexity that always befalls us as we try to lead change in an organization.
A Story:
Being a young auditor at Arthur Andersen, I quickly learned that business is nothing like what I learned in college!
For business is a deeply human endeavor with all the messy imperfections, personality challenges, and emotions that come with the human condition
Business is much more like an episode of the Office, or an old fashion Soap Opera, than a totally scripted “case study” you mastered in college…like in your Accounting class.
You learn early on you are not in control of most situations, you are a fish out of water emotionally, and you struggle to do your best to complete your assignments as best you can. Furthermore, in the auditing profession, the stakes are high in the human condition department!
If you think about it, auditors are there to discover mistakes that client personnel make that, in the end, could result in erroneous financial statements.
So, as in human nature, the client is not particularly happy to see you coming…
Not only do auditors take up a lot of your time (as a client), with demands for analyses and seemingly endless questions about what you did, remember…they are there to identify your mistakes…
On the other hand, since you are the client, you have many more years of experience and understanding of how systems and accounts work…Vs. the skeptical judgment of a first-year auditor. You as the client definitely have the upper hand!
So, what did I learn from these early experiences?
I quickly learned to observe how my more experienced seniors, managers and partners “navigated the human condition” during an audit! They taught me the way in the most basic “on the job” training I could have…Through these observations, I soon discovered it’s all about adopting a people-first approach to understanding clients and their backgrounds, motivations, knowledge of their jobs, and points-of-view. And for that I am eternally grateful to their life-saving help!
As a result of these lessons learned, I adopted a broader “mental model” about business for myself, as to how to assess the business in a more human-centered way.
The Simplicity of Business Framework, stated in the form as a Definition of Business, which I'm about to share, is that Framework… This has worked well for me throughout my life… particularly in an effort to seek clarity and simplicity from complexity…
The Definition of Business
“Business is all about People, in Relationships, performing Work (Processes), to create Value, gain Wisdom, and reach Goals”
Simple and universal enough, right?
Let’s examine each of the 6 Highlighted Elements of the definition to seek clarity, completeness, and usefulness:
1) People
Human Beings, with varied backstories and experiences, talents, skills, dreams, aspirations, values, points-of-view, and goals.
Business is an intensely human enterprise… for it is all about People…Customers, Employees/Associates, Suppliers, Owners, etc. Business is more like an episode of The Office, than a neatly orchestrated and well-oiled machine!
People is the most important element of the Framework.
2) Relationships
At its core, business is a network of separate human relationships. All are based on a varying level of engagement and trust, based on how they have been treated in the business enterprise.
- Customers
- Employees/Associates
- Suppliers
- Owners
- Community
These are collectively the Stakeholder Relationships of any business.
3) Work (Processes)
This element of the model describes what the People are “Doing”… the business processes in each of these Relationships.
By design, a business establishes defined work processes to prescribe how People interact with each of the 5 Stakeholder Relationships described above.
Processes are developed to execute financial transactions, communicate key activities and tasks of the relationship, and to establish a protocol for problem solving and innovation.
Technologies play a major role in executing the full complement of Work (Processes) of an organization; however, technology is an enabler, just as any other tool and resources are enablers.
Leading companies make these processes simple, visible and integrate their internal processes with the parallel “external processes” of The Customer Journey, the Hire to Retire Lifecycle of Employees, the End-to-End Supply Chain Process, etc.
Process Visibility allows the company to create a common language to expedite both the human condition of process understanding, problem solving and collaborative innovation.
4) Value
The output of all processes (to all Stakeholders) is a product of value…A Customer product or service…an employee support resource or tool that enhances performance and competency, a Supplier value that enhances the supplier relationship, an economic value to Owners (Profits), and a Community Value that enhances the enterprise’s reputation.
Clarity of Value Creation is a key goal when processes are evaluated for simplicity, effectiveness and efficiency.
5) Wisdom
Gaining Wisdom is a key element for each of the Stakeholder relationships, particularly for Customers, Employees/Associates and Suppliers.
The search for wisdom in each of these Stakeholder Relationships involves curiosity, actively learning from “lessons learned” and “things that did not work”, learning from others via collaboration, bravery in trying new ideas and solutions, and a constant personal focus on developing individual talents, gifts and skills.
In the end, the search for Wisdom acknowledges that we each know so little, so therefore we understand we need to learn from others to gain wisdom in these Stakeholder Relationships.
6) Goals
Each of our key stakeholder relationships have a different set of goals, such as follows:
Customer Satisfaction and Delight
Employee Satisfaction, Growth, and Happiness
Supplier Satisfaction and Opportunities for Innovation
Return on Investment for Owners
Being a Socially Responsible Corporate Citizen
Key is to operate the human-centered business with a focus on these separate and distinctive stakeholder Goals in every instance of interaction. It’s not only about the Customer.
Conclusion
In summary, the Simplicity of Business Framework emphasizes the human endeavors of any complex business. It all starts and ends with People…in Relationships…performing Work (Processes)…to create Value…gain Wisdom…and achieve Goals.
Keeping this simple framework and model in mind helps you achieve simplicity and clarity, even in the most complex circumstances.
Over time, our goal is to expand discussion of each of these key elements of the Framework in future Link.the.Dots Articles and Podcasts. Stay tuned…
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