Formula For Success

Success in business, whether measured by profit margins, return on investment, market share, or other metrics, can be understood as a delicate balance between two key factors: external integration and internal cohesion.

External Integration:This facet pertains to aligning the organization's capabilities with the ever-evolving demands of the marketplace. It begins by assessing your organization's strengths and weaknesses. Subsequently, you must discern the current and future needs of the market and endeavor to bridge this gap using your existing or to be developed capabilities.

Internal Cohesion: This is the vital counterbalance to external integration and relates to the efficient utilization of energy within the organization. It encompasses minimizing internal misunderstandings, quelling rumors, resolving conflicts, and fostering an environment built on mutual trust and respect.

Mutual Respect: Mutual respect is fundamental for making informed decisions, particularly in complex and information-rich environments. In such scenarios, senior individuals often lack a comprehensive grasp of all necessary information. Thus, they must exchange knowledge and insights with other knowledgeable participants to arrive at sound decisions that align with market demands. When mutual respect is present, knowledge and information flow freely, leading to synergy and better decision-making.

Mutual Trust: For the successful implementation of decisions, mutual trust is indispensable. Team members must believe that their contributions will be rewarded, even if there's a time delay between their input and the eventual reward. There must be trust that there is common interest. Trust is the glue that encourages individuals to invest their energy and effort in realizing organizational goals.

So, why does this formula predict success? We can draw inspiration from physics, where energy is conserved. Any energy squandered due to internal disintegration, stemming from a lack of mutual respect and trust, becomes unavailable for handling the competitive forces in the marketplace.

Consider this scenario: A company possesses groundbreaking technology, a market ripe with demand, and ample investment opportunities. Yet, despite having all the essential ingredients for success, the company faces bankruptcy. The root cause? Internal conflicts among partners drained the organization's energy, preventing the efficient deployment of resources to harness their technology and meet market demands. Time was squandered, and competitors seized the opportunity.

Expanding our perspective to a temporal dimension, we see that as marketplace needs evolve, organizations must adapt their capabilities. This requires internal adjustments, such as revising marketing strategies or modifying production processes. In such transitions, the relevance of information systems and the skillsets of individuals may also shift. Failure to manage these internal adaptations can lead to disintegration, resulting in wasted energy that cannot be directed towards external integration. Eventually, this may culminate in the organization's downfall. Focusing on success only externally can be a reason for eventual failure.

The key to sustainable success lies in perpetually reinforcing internal cohesion, ensuring that no energy is wasted, and that it remains available for external integration. In essence, strategic planning alone is insufficient. To thrive in today's dynamic business landscape, companies must maintain a delicate equilibrium between internal harmony and external responsiveness.

Written by
Dr. Ichak Adizes