Most people who own or manage a business are good at what they do (construction, healthcare, hospitality, etc). Unfortunately being good at what you do is not by itself sufficient to make a success of your business. You can make the most beautiful product in the world, or provide the most fantastic service possible but unless you can market and sell it at a profit you’re unlikely to succeed.
Ernesto Sirolli coined the term “Trinity of Management” to explain why it’s necessary for businesses to do three things “beautifully”: Produce a beautiful product or service, market it beautifully and support your decisions with beautiful financial management. Perhaps most importantly, he believed that while some of us can perform two of these well, it is rare for someone to be competent at all three.
Sirolli made another interesting point. He suggested that when business is good we tend to excel at our dominant “passion” and perform adequately with the others. However he suggested that when times get tough, and a person feels stressed, they will seek comfort by reverting to “type” to the exclusion of the others. This means that things can quickly go from bad to worse.
This theory reflects a very human tendency to seek comfort in familiarity when under stress. Sirolli gives the example of a “producer” being in charge of a business. When times are difficult and this person is feeling stressed they may “lock themselves into their workshop” to the exclusion of other aspects of the business. Meanwhile the underlying problem could be that marketing is not working or that pricing and cashflow need attention. If this is the case the business doesn’t need to focus on its product, it needs a better marketing process or improved cash management.
Sirolli provides similar examples of what happens when a marketer or financial manager is in charge of the business and things start to go wrong. I have seen his theory play out on a number of occasions and I think it’s correct. Under stress many people burrow themselves in the comfort of their strengths and eventually avoid dealing with their weaknesses. When this happens instead of doing one thing well they risk doing all three badly.
I have asked many business owners where their passion lies and how well they would score themselves out of ten on each category. A fairly typical response for Producer, Marketer and Finance is 8/5/2 respectively. Every business owner I have questioned has classified themselves as a Producer and almost every one of them has ranked financial management as their weakest area. This is worrying because ASIC statistics consistently indicate that poor financial management is a dominant cause of company failure.
So what can you do about this? Developing a good balance of skills and knowledge in your business is a good start. You personally don’t have to have strengths in all three areas but you can make sure you know the basics while surrounding yourself by a team that knows more. That team can comprise employees, informed friends and/or external advisors. The team doesn’t have to work in your business full-time, it just needs to be there to support, advise and implement when required.
Regardless of whether business is currently good or bad for you, why not invest five minutes scoring yourself against each of the three skill sets above and if one of them is lacking start doing something to improve your capacity in this area. Don’t stick your head in the sand. Think about building a team around you that will give you a balance of passion in these three areas so that you can build a beautiful business.