By Cesar Malacon

Business in a Shoe String Bicycle Wheel

The organisation of the Business

With the intention of depicting a high view of the organisation of the business, I took a bicycle wheel to make an analogy of how the most important subjects in business co-exist and what is their broad contribution to the companies existence.

Culture
Companies are formed by people. People are the very most important part of any organisation for obvious reasons. People join the organisation and become part of the living organism all companies are. Each employee brings a profile determined by experience, skills, knowledge, customs, expectations, energy, limitations and frustrations with them. The resulted very complex mix of all this variety can have higher impact on the overall manoeuvring of the company than some can imagine. Leaders should then build a culture for their organisation in which the smoother flow of actions can be deployed in order to move agilely towards the set strategy. Communication channels and lines must be provided and drawn, and complicated aspects of self fulfilment for the employees should be provided. Leadership is acted to lead the living being with its several styles and approaches. Then people react to it. Hopefully positively, the company gets then a pace and a frequency. Schools, academies and thoughts of organisational behaviour suggest acts and consequences and distinct leadership styles fit some or others. In the best cases, the intention gets the practice right and everything works properly.

Strategy
Companies need to have a strategy to do well in business. Without a sound strategy all is abandoned to luck. Either good luck or bad luck. If good luck knocks at the door, surprising success demands a heavy dosage of strategy in order to keep momentum and leverage the accidentally gotten results for the long run; without a reasonable strategy it would be only a lucky strike and gates to perish will shine in the companys way. Something loudly spoken when talking about strategy is the vision, because it is supposed to set the ultimate goal of the company and it should lead efforts towards it. Strategy should be pursued in an environment determined by content, context and processes. It will identify the right spots to pursue in the industry, the tools and resources to do it, the timing, the way to follow and the how. Strategy is a complex and extremely important subject to define. It should start with a strong purpose. Check a brief presentation about what is strategy I previously did
here http://cesarmalacon.tumblr.com/post/13580947668/the-3x3-strategy-overview

Execution
Strategy is communicated. Then plans are set on paper and responsibilities are delegated. Teams are formed and expectations are announced. Resources allocated, scopes defined and rewards offered. All this is reduced to people. People would have to follow the set of actions agreed by managers and leaders and give their best. But people are responsible for a limited area of influence and must wait to pair their outcomes with those of other distant areas of influence from different teams and this ends up as a huge Lego block to be built with the individual outcomes of these independent but highly interrelated efforts. Strategy is vulnerable to execution. Quick wins are expected, revisions planned, and hopefully reactions are deployed to keep the line set by the strategy. If not acted upon on time, the track can be easily lost. The way back is never guarantied. Execution lays on the clarity and simplicity of the communicated strategy.

How should it be sorted out to win?

Cause of innumerable and endless debates and arguments is the tight relationship of these important subjects of an organisation. So far it seems that there is no such thing as a unique all mighty answer to this. However some masses wisdom has been reached in something that can be approached in a number of sentences. Execution always trumps strategy. The weakest execution can take over the strongest strategy if this is not deployed Strategy is never sustainable unless it is receptive to inputs provided by execution Execution with no strategy yields more value than a brilliant strategy with no execution If you don't know where you are going (strategy), any road (execution) will get you there Without strategy, execution is aimless. Without execution, strategy is useless. Morris Chang Excellent execution of an average strategy yields more than the average execution of an excellent strategy

And a million more clearly saying us that it all depends in the kind of company and in the kind of industry and in the particular circumstances under the combination of these subjects should be defined. All 3 of them are very important. If comparing the organisation of a business with a bicycle wheel here is the relationship

Parts of a bicycles wheel:

Rubber Commercial activities This is the point of contact with the surface, and is what keeps you on track and gives you traction. In companies, these are the commercial activities. No sales, no fuel to go on and the deeper your understanding of the market needs the better you do.

Rim Corporate infrastructure: This is what supports the activity. It should keep going while receiving impacts from the road. This is the corporate infrastructure. Technology, assets, and finance. Spokes The Culture The spokes support and give shape to the Rim. Definitively should be the culture. No people, no need of infrastructure. Depending the quality of your people and the culture they live, the results your infrastructure yield. Valve Strategy The valve is very important. Its the way for the air to get into the wheel so it can start working, and it has the key feature of keeping the air inside of the wheel. Two of the most important elements of a bicycle wheel depend on the valve. This is the Strategy. Strategy sets the what, the why and the how of whatever its going to be achieved by the company. It keeps the efforts and advantages, differentiators and all corporate resources aligned - Inside the company-. Strategy has its ways to each one of the departments so is the way in to it. Air No air, no usefulness. No air, no valve needed. - Execution. Without the right amount of air, the wheel spins or doesnt. Depending on the amount of air, the wheel spins properly and smoothly or heavily and slowly, only wasting fruitlessly the resources for a poor performance. Taking the relationship of strategy and execution: you can inject air to the wheel through the valve, but if the valve is damaged or is not the proper valve needed for your specific rubber market- the wheel will spin for sure, but not for long, and not in the way it should, leading you out of the way in the need of change.

Finally, and very important there is the Hub axle-.

Hub axle-. This is a very interesting part of a wheel because it is at the centre of all its resources. It holds them all together and allows proper movement. The spokes are attached to it, which at the same time support the rim, base of the rubble which needs air and valve. The BUSINESS MODEL is our hub. All companies have a business model, either if they thought about it deliberately or if it is just the consequence of the overwhelming needs it faces. With the proper business model, the overall functionality of the company can be perfect and effective. With the wrong hub, the wheel will always spin, but will never reach superior performance to win any race. The business model is absolutely dependent of the internal abilities of the company, so there it is where you should make a pause after having everything else set on place and define your business model, to be able to go out and last longer and faster in the race, delivering the results you want.

As the Axle, here is where business models live, just in the centre.

Borrowed from Alexander Osterwalder. 2007