Integrated Triune Purpose, the missing link between spiritual value and business value?

Those of you, who have been following our blogs closely, would have definitely noticed a key message that an integrated “TRIUNE PURPOSE” driven approach(with its three frameworks - PDL© for leadership, PTV© for strategy and PIP© for innovation) is the best approach, when it comes to discovering untapped growth opportunities. While most practitioners would agree with our conclusion, one of the fellow practitioners, made a causal comment during one of the recent networking events - and I quote -“While it all sounds great to talk about solving these growth opportunities, in an integrated manner, what matters at the end of the day is, financial ratios based business value, and so, everything else is secondary”.

Spiritual Value and Business value – the conjoined twin concepts defined

Our friend perhaps has a point as most valuation models, including McKinsey’s Zen of Corporate Finance Formula, are all based on just three key financial ratios of growth, ROIC and cost of capital. However, as we take a closer look at the six dimensional purpose value chain equation and its elements (spiritual, purpose, leadership, strategy, innovation, scientific as listed in the picture below), we could clearly see a “cause and effect” causal chain relationship, emerging among them, more so, within the triune purpose dimensions of leadership, strategy and innovation. With that said, we contained our enthusiasm (of jumping too quickly into the micro level causal chain analysis), and decided to step back, to define the conjoined twin concepts of business value and spiritual value first- to see how they are interlinked at the macro level -

• Business Value (BV), in its essence, is discounting future cash flows, based on today’s cost of capital, popularly represented using the Zen of corporate Finance Formula, listed below. In other words, corporations not only need to grow continuously, but also, must learn to exercise their investment capital, in a prudent manner, and start producing profitable cash flows, above and beyond the hurdle/threshold rate of WACC, for them to increase their business value -> BV= NOPAT x [(1- g/ROIC)/ (WACC-g)].


• Similarly, Spiritual value (SV), in its essence, is discounting our future heavenly experiences (which happens to be faith & hope driven in most denominations/religions), based on today’s cost of emotional capital (which happens to be love in most denominations/religions), that is expressed using our own version of Zen of Spirituality Formula, listed below. In other words, we not only need to grow spiritually, but also, must learn to exercise our spiritual capital of faith & hope, in a prudent manner, and start living a fruitful life on this earth, above and beyond the minimum threshold of love (or cost of spiritual capital called love), for us to increase our spiritual value -> SV= spiritual gain x (1- Spiritual growth/Return on Spiritual capital)/ (minimum love threshold-spiritual growth).

What do these definitions tell us?

Interestingly enough - very much like how Business value is dependent upon three financial variables of growth, ROIC and cost of capital (or hurdle/threshold rate called WACC), Spiritual value is also dependent upon three spiritual variables of faith, hope and love, and rightfully so, they are interlinked as shown in the picture below -

Spiritual Value is determined by Sustainable Spiritual Advantage (SSA) very much like how Business Value is determined by Sustainable Competitive Advantage (SCA)!

Now that we have established the six way macro linkages across the six purpose value chain dimensions, the next logical step is to layout the micro linkages among them, with a help of few financial charts, for the benefit of those of us, who chart these things for living. As a first step , let us recall one of the key guiding principles that drives value within our Triune purpose framework (PDL©, PTV© and PIP©) - “For Organizations to increase their business value, they must learn to excel in one or more of following 3C dimensions , to achieve the so called Sustainable Competitive Advantage (SCA)”

• Market/Experience Advantage, as covered within our Experience Pool Portfolio (EPP©) framework, addressing the growth variable within BV formula.


• Capability Advantage, as covered within our Capability Pool Portfolio (CPP©) framework, addressing the ROIC and WACC variables within BV formula.


• Collaborative Advantage or Purpose Innovation advantage, as covered in our Purpose Innovation Portfolio( PIP©) framework, addressing both growth (g)and ROIC variables, as collaborative advantage, in our opinion, is the next wave to unleash growth opportunities, especially within the pull side of the value chain, as covered in one of our earlier articles( http://strategywithapurpose.blogspot.com/2011/01/purpose-innovation-answer-for.html).

Within the context of this 3C formula, SCA would be represented as follows -

• SCA = market or experience advantage + capability or competency advantage + collaborative advantage

Similarly, within the context of spiritual value, we see a similar set of 3C’s, resulting in a Sustainable Spiritual Advantage (SSA) formula as well -

• SSA=faith/hope advantage + love advantage +inter denominational/religion collaboration advantage.

As we further dissect each of the 3C’s within SCA and SSA formulas -we can clearly see a pattern evolving - that the top 5 macro charts, that are being used to develop the diagnostic insights within the SCA and SSA dimensions, not only, follow a symmetrical pattern, but also, they end up becoming the stepping stone for each other’s insight (i.e. SCA and SSA),as outlined in the 15 SCA producing symmetrical charts (5 for Market/Experience Portfolio, 5 for Capability Pool Portfolio and 5 for collaborative Pool Portfolio) and 5 SSA producing symmetrical charts, as outlined below.

SCA enabling Market/Experience Advantage Charts

With that said, let us leverage our EPP framework (that is part of PTV), and analyze the Market/Experience Advantage, with a help of it top 5 macro level bubble charts, with revenue in $ being represented as the bubble. To put our symmetrical progression reasoning in perspective, we have provided a sample set of charts, we recently put together, as part of one of our client engagements, to show how the symmetrical progression is manifested within those charts.

• Company’s growth vs. Market Growth


• Company’s growth vs. Relative Experience or Market Share(RMS)


• Operating Margin (ROS) vs. RMS


• Capital Intensity (or Operating Velocity) vs. RMS


• ROIC vs. RMS
  
  

SCA enabling Capability Advantage is analyzed by 5 macro charts within our CPP framework

Similarly, as part of the CPP framework, Capability Advantage is analyzed by 5 macro level bubble charts, with revenue in $ being represented as the bubble.

• Company’s growth vs. Market’s Total capability (primarily capital only for now)


• Company’s growth vs. Relative Capability Share (RCS)


• Operating Margin (ROS) vs. RCS


• Operating Velocity or Capital Intensity vs. RC


• ROIC vs. RCS

SCA enabling Collaborative Advantage is analyzed by 5 macro charts within our PIP and PTC frameworks
Along the similar lines, as part of the PIP and PTC frameworks, Collaborative Advantage is analyzed by 5 macro level bubble charts, with revenue in $ being represented as the bubble.

• Company’s collaborative growth vs. Market’s Total boundaryless collaborative capability (Purpose model, Purpose bundle and Purpose platform etc.


• Company’s growth vs. Relative Collaborative Share (RCS)


• Operating Margin (ROS) vs. RCS


• Operating Velocity or Capital Intensity vs. RCS


• ROIC vs. RCS

Similarly, Spiritual Value is determined by Sustainable Spiritual Advantage (SSA)

Now that we have shown the symmetrical progression existing among the 15 charts from business value producing SCA standpoint, the next steps is to show how they relate to the spiritual value focused SSA. With this article being Business Value focused, we have limited the scope of SSA with just five charts, which hopefully is good enough to show the symmetrical progression from the standpoint of it supporting SCA’s 15 charts and its insights. As time permits, we will go into more details with the remaining 10 SSA charts in one of our future articles. For now, listed below are the 5 macro level bubble charts, with number of souls in # being represented as the bubble, which by the way, happen to be in perfect alignment with the 5 macro level charts of EPP framework.

• Spiritual growth (faith) vs. denomination’s Growth


• Spiritual growth (faith) vs. Relative Denomination/Religion (RDRS)


• ROIC (hope)vs. RDRS


• ROS (faith driven) vs. RDRS


• Operating Velocity (hope driven)vs. RDRS

Does that mean Spiritual Value is the starting point for Business Value?

With that said, I am sure, someone is asking – “does that mean, business value must always start with the spiritual value?” The answer is “IT DEPENDS”, as the spiritual value culture invariably precedes Purpose driven leadership (PDL) culture in most organizations, and so, it is fair to say that PDL can be sourced either from a “higher power” based spiritual leadership culture or from an emotional energy based leadership culture, as long as it has the three key ingredients of faith, love and hope. Nevertheless, our integrated “triune approach” is well positioned to bridge the missing link between business value and spiritual value regardless of the source of the spiritual value (higher power based and/or emotional energy based), as outlined in the picture on the top of the article. It so happens, our PDL leadership framework, equally works well for both realms of cultures i.e. higher power driven spiritual value culture and Emotional energy driven spiritual value culture, as outlined in the picture below as well.

Triune Purpose in action with real world examples…..

With that said, our research also suggests that leaders with a deep sense of spiritual value (or faith), tend to dream bigger visions, regardless of their source of inspiration (i.e. higher power based or emotional energy based) and those big visions are the ones that help them to create those futuristic experience pools (or market segments) which never had existed in the first place, as seen in the following 5 examples from 5 different walks of life-

• Colgate founder William Colgate, a farmer by occupation, venturing into the multi billion dollar Colgate empire, inspired by his Christian Faith –> Spiritual energy based.


• Aravind eye hospital founder Dr.G.Venkataswamy, revolutionizing eye care with a shop floor type business model, inspired by his Hindu faith based Seva Foundation roots –> Spiritual energy based


• Professor Muhammad Yunus, the Nobel Prize winner, founder of the Grameen Bank, and one of the pioneers of micro finance, being inspired by his Islamic concept of charity and faith –> Spiritual energy based.


• Alexander the great, with his emotional energy based faith, conquering most of the known world in his era –> Emotional energy based.


• Steve jobs with his emotional energy based faith, revolutionizing the mobile space –> Emotional energy based.

In all of these five examples, if at all there is a common denominator, it is the fact that these leaders have always started their extraordinary journeys, with a deep sense of faith (higher power based or emotional energy based) and that faith is the one that had eventually helped them to revolutionize the market place or world in a larger context. In other words, in all of these five cases, these revolutionists, ended up creating an experience pool (or market segment), which had never existed in the first place at all. Without going too much into all of their life achievements, let us take the most recent example of Steve Jobs (as he has been in the news a lot lately), and see how his emotional energy driven, faith based vision, helped him to create an experience pool (or market segment) which had never existed before, further reinforcing our triune purpose linkage theme, as shown below.

• Emotional energy driven faith ->big vision->bigger experience pool/market segment which never existed->higher CAGR/ROIC->higher business value

As we further look at Steve Job’s legacy, it is apparent that his “hope and love” part of the emotional energy system was working in perfect harmony with his faith part, every step of the way, especially while he was developing Apple’s futuristic experience pools. In other words, it was his hope part of the emotional energy system that gave him the “never give up” attitude, even when things were impossible for him to climb. Let’s us face it – no matter how we slice it, odds of him reaching to the top of the most innovative company on the face of this planet, were near zero, if not, totally impossible– first growing up in an adopted home, then dropping out of the college, which when was followed by a period when he had to collect soda cans for a single meal, which then was followed by a period of success, and then came the unjust ouster from Apple during his first stint and then the cancer – wow, what a ride! But then, in spite of all of those odds standing against him so high- he neither lost his hope nor his spirits - and in my humble opinion, that is what made him one of the great business leaders of this generation! Not only that, during all those difficult days - he never lost his Mojo or his love for his profession (and to humanity as well) – and in nutshell, he truly lived up to his own slogan – “Stay hungry and Stay foolish”.

Conclusion

In closing, let us conclude with this thought – our combined experience, along with a decade worth of research is showing us that most companies, historically, have succeeded, only when they have taken an integrated approach in discovering untapped growth opportunities. Time and time again, we run into situations, where many “near picture perfect growth strategies” and game changer type innovation plans, have often been put on hold (or stopped?), partly because, appropriate leadership traits, were not exhibited during critical junctures - which makes us to propose another slogan "Lead with the Purpose Culture, Strategize from the Core and Innovate with the Edge". As we further dissect this slogan – we see the following sequence of events happening in any untapped growth discovery initiative, as reiterated further, by our triune purpose driven approach -

• Lead with the PDL leadership framework, to help develop the purpose culture that is needed to set the cultural context and order from the chaos.


• Strategize with the PTV framework, to help establish the boundaries as “Core and Edge”, so that the firm can start strategizing from Core.


• Innovate with the PIP framework, to help innovate without boundaries, yet, with an initial focus of innovating with the edge.

With that said, let us summarize the article with a final quote –

• “THE ME”, one wants to be (Spiritual value) must be aligned with the “THEME” (Business Value), the company wants to be, so that the stakeholders can reap their value, when it is completely THEMED to be!”

The prerequisite for such a magical transformation, is all about us removing the “ME” from the “THE ME” space first and then together transforming it into the “THEMED” place– and that is where, our integrated TRIUNE PURPOSE driven approach, stands tall and bridges that missing link perfectly - as outlined in the picture on the top of the page!

Strategy – Is it a Marathon, Sprint or Both?

Courtesy: Google Images

While we have used quite a few metaphors in the past to explain the purpose-profit balanced strategies – the one, that has caught my attention the most, in recent days is – “Is Strategy, a marathon, sprint or both?” Granted, the street often pushes the firms to run the race with a sprint like mentality producing quick wins– yet, history is also, filled with examples of firms fading away in to the doldrums (after producing those early quick wins)- partly because of their lack of marathon like mindset. Hence, the question before us today is -do we execute our strategies with a sprint mindset, marathon mindset, or both?

Solomon – the wisest man ever lived – once, said -“There is a time for everything, and a season for every activity”. In other words, the appropriate speed in which we react to business situations depend upon the seasons of the business cycle - and so it is important that we get in tune with the business seasons first - before deciding whether to execute our strategies with a sprint or marathon mindset. What do I mean by that?

As it turns out - the concept of seasons is what gives us the confidence that every down cycle in life or business has a beginning and an end. In other words – if situations like misfortunes, misunderstandings, quarrels, failures, disappointments, profit or loss -have no end, our life will be totally meaningless (and perhaps even boring). As a matter of fact, if there is no down time – we will not be able to even appreciate the goodness of up time – much less experiencing them.

Likewise, if we look at the characteristics of sprint and marathon races – we can clearly understand that - both have start and finish lines, and yet – what happens between their start and finish lines are a different story. In a sprint, the effort is focused on reaching the finish line in seconds or perhaps in minutes, and so the runners push hard, giving the whole energy they’ve got till they reach the finish line. Also,the timely start is critical, as it makes up the huge percentage of the race, and even a tiny stumble can cost them a heavy damage much less winning the trophy. On the other hand, in a marathon, runners know that they’re going to be running for a long time, and so pacing is critical for them to reach the finish line much less winning the trophy. While the start is important, it is secondary in comparison to sustained progress and so, one can even recover from a large stumble as long as it doesn’t result in any physical injury.

Similarly, those who approach strategy execution as a sprint quickly burn out. They run the first few days, maybe even the first month or two, like a category 5 hurricane that seems unstoppable by their competitors. And yet, as time wears on, they lose their strength (stamina), well before the finish line. On the other hand, those who approach it as a marathon, though, they get off to a good start, and yet oftentimes fall far behind the sprinters. So, the question of the day is - how do we get to that optimum speed that helps us to win the race at all times? I guess the answer lies in Solomon’s words of wisdom within the context of the sprint-marathon metaphor –“run the business race like a marathon, yet sprint up, once in a while as needed-as per the seasons – and, then scale back after the sprinting season is over”.

This does not mean that we have to be wiggling like worms for every environmental change -on the contrary, we need to be steady and manage the execution speed (or momentum) by proactively choosing the optimum speed, as per the seasons of business realities. The optimum speed is what going to help us to transcend over the minor changes of the environment – thus, giving us the control over the future ( i.e. leading to superior results) vs. letting the environment controlling our future without our proactive intervention. That being said, we cannot, however, blindly ignore the seasonal challenges as well- as adjustments (like speeding up once in a while like a sprint) are absolutely needed to react appropriately to the seasons (e.g. missing a quarter numbers). Without such minor adjustments, our strategies can quickly become irrelevant to the moment and actually end up hurting our long term success.

In the final analysis - it is a balancing act -and so depending upon the seasons- we need to pick and choose the optimum speed (as a sprint or marathon) as needed by the business realities of the seasons to sustain the momentum for the long haul. Without such speed, we might even miss the mark on some business situations – and likewise, with too much speed, we might even lose the stamina (needed for the long haul) - and so “doing both” is the way to go when it comes to strategic planning in the words of Inder Sidhu and Roger Martin. To get to that “doing both” mindset within the strategic planning process – like most things in this world – we need to adhere to certain principles to help arrive at that optimum speed.

Marathon principles

• Principle of "high energy" – Addressing “who we are” question in terms of forming the “spirit-soul-body” balanced high energy team – or hire the right people who can execute with high energy for the long haul.
• Principle of "sustainment" – Addressing the "why do we exist" question in terms of sustainment based purpose dimension.
• Principle of "endurance" – Addressing “where to play” question in terms of overcoming the early painful situations (i.e. anything is worth chasing after it creates some pain) or chasing the right market track/geography.
• Principle of “never giving up” – Addressing “what to play” question by overcoming the early brick walls with “never giving up” type differentiation and exploitation strategies.
• Principle of "dream" – Addressing “how do we win” question by “keeping the dream of finish line in mind” or with top line focused big bet ideas.
  

Sprint Principles

• Principle of "unstoppable force" – Addressing “who we are” question in terms of forming the team with a good mix of "skill, talent and giftings" who can execute with a great force for a higher first mover advantage or business impact.
• Principle of "early start" – Addressing the "why do we exist" question in terms of hitting the quarterly profit numbers quickly.
• Principle of "focus" – Addressing “where to play” question in terms of being laser focused with the right set of product and services categories.
• Principle of "finish" – Addressing “What to play” question in terms of “getting to the finish line” quickly mentality.
• Principle of "trophy" - Addressing “How do we win” question in terms of “keeping the trophy in mind” type bottom line focused operational excellence ideas.

Bottom line: As we can recognize from this set of marathon-sprint balanced principles, it is clearly evident that “there is no silver bullet” -especially when it comes to arriving at the optimum speed using these marathon-sprint balanced principles - and so, it is all the more important for organizations to properly balance these principles with a “doing both” mindset. In addition, augmenting these principles with the right set of accountability/governance processes will not only make our organizations a best in class in our industry vertical in terms of exceeding the profit numbers, but also, make them the purpose leaders for the long haul.