Is there a formula for making a business awesome?

In the previous article, I argued that Business Agility is about how Business Owners can make their businesses awesome . I did this by going beyond the traditional product, process, and people view of Agile thinking by reframing the first two principles of the Manifesto from a business perspective.

I concluded my reasoning by stating that an awesome business is one that generates awesome results for all parts of the organizational ecosystem by fostering awesome experiences with awesome people, technologies, and processes.

In this article, I will continue the rationale I am developing about Business Agility with our Awesome Business Formula. It is literally an equation that I created with Mateus Piveta , my partner at SURYA and ABO Academy , to stimulate in business leaders and managers the understanding of what really is a strategic priority in the context of the New Digital Economy.

But what is the purpose of mathematically formulating what really matters to a business leader when it comes to Business Agility? I answer: To make explicit not only the most critical elements in the strategic thinking of business acceleration, but also the interdependence between these elements. That's what I address in this article with the Awesome Business Formula.

If you are a business leader or manager, even an expert responsible for an agile and/or digital transformation program in your company, I hope this formula can guide your next decisions and stimulate a sense of urgency in the face of the potential for business growth in the context of the New Digital Economy. But before that, comes the following question: Why formulate an idea using an equation?

Formulating Ideas with Equations

It is very common to see the term formula being used as a standardized way of acting and expressing oneself in order to achieve a goal. A procedure that leads to success or failure in a given business context. In other words, a set of steps that we must follow or avoid based on what has been done and learned before.

However, the term formula can also represent an equation in mathematics, a statement that two expressions are equal. For example,

A = B + C

A third option is to put the two concepts together to formulate an idea in the form of an equation. This is an old artifice used by experts to demonstrate how a larger element can be broken down into smaller elements, indicating the interdependent relationships between them. In this case, the goal is to use constants, variables and their relationships to convey some learning.

I will present three examples of this technique to demonstrate how a few formulas are able to stimulate the understanding of an idea and the nature of its essential elements.

1) The Formula of Success

The Formula: The Universal Laws of Success is a book written by the physicist and scientist Albert-László Barabási, one of the world's leading experts in Network Theory, who proposes the following formula for success:

S = Q x r

For him, the success (S) of a person results from the value of his/her ideas (r) multiplied by the ability to execute them (Q). Does it make sense to you? What do you think about the belief that our success is directly related to the genius of our ideas and our incredible ability to execute them? Maybe this equation lacks a pinch of luck! ??

2) The Dude's Law (The Formula of Value)

Dude was the nickname of the late David Hussman , a great guy with a great mind and a great heart. Sadly, he was beaten by lung cancer on August 18, 2018. He had this nickname because of his great resemblance to the character with the same nickname played by Jeff Bridges in the movie The Big Lebowski (1998).

Well,?I had the pleasant satisfaction of sitting with him in a coffee shop here in Porto Alegre in 2009, the city where I live in southern Brazil, to hear him explain his formula of value, the Dude's Law:

V = W / H

David used to say that he was looking for a mathematical representation as simple as the Ohm's Law (R = V / I) to explain to the agile world that Value (V) has a direct relationship with Why we do what we do and an indirect relationship with the How we do it.

That is, highly relevant problems that require little effort in execution (simplicity) have much more value than problems of low relevance that require great effort in execution (complexity). And we often see teams getting lost in endless discussions about how they will meet their demands without knowing why they need to be done!

What do you think about this brilliant insight of dear Dude?

3) The Friendship Formula

Jack Schafer, a former special agent for the Behavioral Analysis Program of the FBI's National Security Division, tells in his book The Like Switch: An Ex-FBI Agent's Guide to Influencing, Attracting, and Winning People Over that American scientists are recruited by the Chinese with a technique called the Friendship Formula:

Friendship = Proximity + Frequency + Duration + Intensity

Schafer learned in his activities at the FBI that it is possible to accelerate the development of friendship with any person if we correctly work the following variables into the relationship: a) our proximity and also exposure to the other person, b) the frequency and c) the duration of the contacts we make with the other individual, and d) the intensity of each of these contacts (satisfaction of the psychological and/or physical needs of the other person, either by verbal or non-verbal behavior).

What do you think of this formula? For me, it is a rational way to explain the Rapport technique, one of the main persuasion techniques of NLP (Neurolinguistic Programming).

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But what does all this have to do with developing Business Agility and making a business awesome? The freedom to create our own Awesome Business Formula, whose rationale for its construction I detail in the next section.

Building the Awesome Business Formula

For an Electronic Engineer (my academic background), modeling complex systems with linear and non-linear equations is something natural during his/her professional education. However, we are talking about business organizations, complex dynamic systems whose behavior and results depend directly on the beliefs and values of their top management and the increasingly VUCA and digital nature of the world we live in.

I am not so pretentious as to try to formulate all this complexity of organizations in a single equation. Nor do I believe it is possible to simplify the critical factors of an amazing business into a simple linear equation. However, we already knew that our awesome business formula should be built on the following premise that I built in the article Business Agility is about how Business Owners can make their businesses awesome :

An awesome business is one that delivers awesome results and experiences to all parts of its organizational ecosystem, and does so with awesome people, processes, and technologies.

For us at ABO Academy , making a business awesome has become the mantra of Agile Business Owners, a management and leadership role that seeks to develop new organizational capabilities (people, processes, and technologies) with the goal of leveraging business results and impacting their customers and other stakeholders (experiences) positively.

But what about products and services? Aren't they part of this list of critical success factors of an awesome business? Think that every product is the result of a service, and that their value is assessed by the positive impact they generate in the lives of their customers and other stakeholders. Therefore, they are means to achieve results and experiences from a business perspective. If they are not delivering the expected results, we can upgrade, replace, or even discontinue them. Would you be able to discontinue your own business? Maybe, but as a Business Owner would you really discontinue a product.

Going back to the Awesome Business Formula, we have combined into a single equation the critical success factors that make a business awesome according to our premise above:

Where:

• Ra represents the awesome business results (sustainable exponential growth),
• ?t represents the awesome processes that accelerate the growth (organizational capabilities),
• Ta represents the awesome technologies that enable the acceleration (resources),
• Pa represents the awesome people that enable the organizational evolution (talents), and
• Ea represents the awesome experiences that engage people (organizational culture).

We need to keep in mind that every business must generate positive results in order to be sustainable and impact positively the entire organizational ecosystem. In other words, the more incredible the results are, from the financial, customer, market, and social perspectives, the more incredible the business will be. But it is not enough to desire sustainable exponential growth without working on the development of the organizational capabilities that will leverage these results. Here are the other variables in the equation.

Exponential growth is the result of a constant (and even accelerated) rate of acceleration resulting from the direct increase of the final result or the anticipation of its achievement. That is, we can accelerate a company's growth by continually developing new organizational capabilities that increase efficiency, effectiveness, compliance levels, opportunity generation, and risk mitigation. An awesome business has awesome processes that reduce the lead time (Δt) of delivering value and return on investment made in each new organizational capability, which is why it is in the denominator of the equation. The shorter the lead time, the more incredible the business.

In the context of the New Digital Economy, we rely on technologies that enable business acceleration amidst an abundance of opportunities and resources that support new organizational capabilities. This variable has a direct relationship with business outcomes if, and only if, they make both processes and people awesome. The more awesome are the technologies used by the company to add value and mitigate waste in the organizational ecosystem, the more awesome the business is.

Our fourth variable, which also has a direct relationship to business results, is people. Awesome businesses attract, develop, and engage awesome people (talent) by the transformative purpose, the opportunity of professional development (mastery), and also the autonomy to apply the mastery to the fulfillment of the purpose. In short, without awesome people there is no awesome business.

Finally, and to conclude the rationale of the Awesome Business Formula, think that it is not enough to hire and develop talent to optimize processes with technologies that leverage business results (the essence of an Agile-Digital transformation without a larger context for the change). We need to foster the development of a culture that supports an awesome experience in all parts of the organizational ecosystem. An awesome experience is able to empower our growth capabilities and leverage our results by the sense of belonging, accountability and ownership in all members of the organization. This is why it is placed at the exponent of the equation.

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What did you think about this rationale? Did it make any sense given the management and leadership models you have been practicing for years? Before I move on to the next topic, I'll leave you a few more thoughts:

• How many leaders and managers really operate with a focus on business results? Remembering that these results go beyond the financial perspective, they also include results from the perspective of customers, market, and social responsibility.
• How many leaders and managers prioritize their growth strategy based on the organizational capabilities that will enable the results, instead of just demanding the acquisition or development of resources?
• How many new deployed technologies actually enable the acceleration of your business growth?
• How many talents are attracted and developed from a set of beliefs and values that encourage a transformative purpose and relentless pursuit of professional mastery and autonomy for continuous improvement and innovation?
• Finally, how many leaders and managers are prepared to support a psycological safe environment that fosters awesome experiences in all aspects of the organization?

Well, if you believe that the items above are able to make Business Agility a reality in organizations, I will present how this equation can be put into practice today. If you don't believe me, maybe my speech is not for you or for the company in which you operate.

The Formula in Practice: The Acceleration Factor

We would like to see our Awesome Business Formula spreading around the world. But I say that not because we want to become famous for demonstrating that Business Agility is about making business awesome. But rather for stimulating a change in the mindset of top corporate management and other business leaders about what really matters in a business acceleration strategy.

In this last section, I invite you to another moment of analysis where I propose the canonical (simpler) form of the Awesome Business Formula:

Awesome Business = Ra x Fa

• Ra represents the awesome results generated by the business (exponential growth) and
• Fa represents the acceleration factor of business growth (sustainable growth).

Do you remember the Barabasi's Formula of Success? Well, this version has the same structure, only now we are not talking about the brilliant ideas of the individual, but about the awesome results of the organization. We are also not talking about the individual's ability to execute, but about the organization's ability to accelerate growth (which is also execution).

Do you remember Barabasi's Success Formula? Well, this version has the same structure, only now we are not talking about the brilliant ideas of the individual, but about the awesome results of the organization. We are also not talking about the individual's ability to execute, but about the organization's ability to accelerate growth (which is also execution).

What do you think about this simplification of the formula? With this new Acceleration Factor, I might even give you the freedom to disagree with the elements we propose as growth accelerators (processes, technologies, people, and amazing experiences), proposing other elements that make more sense for your organization's context.

But always keep in your mind that the new elements need to continue to accelerate growth and impact positively the business across the organizational ecosystem. Otherwise, the desired future state of your company is not that of an awesome business from the New Digital Economy.

I have selected some tips for you to put our formula elements into practice in your company:

a) Awesome Results ("Moon Shots")

What is the order of magnitude of the results desired for your company in a horizon of up to 5 years? Are the financial, customer, market, and social responsibility perspectives included in these results? Can you demonstrate exponential growth in one or more performance indicators from these perspectives?

We think it is unjustifiable to sustain Agile and Digital transformation programs, and on top of that talk about Business Agility, without aiming for exponential growth in the business perspective. In your company's next strategic planning review, think about ambitious goals (the "moon shots" of the OKR method) that will require the development of new organizational capabilities to reach a much higher level than the one your company is at today.

b) Awesome Processes (Lean Thinking)

I argued earlier that it is the organizational processes that define our company's ability to deliver value continuously, responding quickly to customer demands and adapting to market changes. The first stage of the evolution towards Business Agility must focus on experimenting and learning new ways to deliver value and reduce waste.

Awesome processes result from the disciplined practice of Lean Thinking in all aspects of the organization. This way of thinking starts by optimizing the different value streams of the company and evolves to ensuring their continuous flow, from the concept or demand, to the delivery and value confirmation.

However, we recommend that this thinking also be taken to the company's strategic project portfolio management (Lean Portfolio Management), treating the programs of organizational capability development as an investment portfolio. With this way of thinking, top management is forced to balance priorities and allocate resources to projects in a more effective way, being coherent with the strategy itself.

c) Awesome Technologies (Exponential Organizations)

The third variable in our equation is associated with the awesome technologies of Exponential Organizations (Exponential Thinking). After all, awesome processes need awesome technologies to support them, scaling operations and creating new business opportunities in the context of the New Digital Economy.

To leverage business growth, we need to invest in exponential technologies such as Digital Platforms, Social Networks, Big Data, Artificial Intelligence, Internet of Things, Blockchain, among many others. It is not enough to think of the use of technologies only as solutions to problems of efficiency and effectiveness of operational processes. We need to think of the use of technology as a catalyst for new opportunities and even innovation for the business model. This is why Digital Transformation programs need to be less about tools and more about cultural transformation (people) associated with digital innovation (business).

d) Awesome People (Agile Thinking)

The fourth variable in our equation is associated with the Modern Agile principle of "Make People Awesome", in all aspects of the organization (stakeholders). We want to emphasize to top management that in order to enable the awesome results so desired by companies, we need awesome people acting as leaders, managers, employees, and business partners. After all, it is not hard to agree that it is the brilliant minds (talents) that will understand and solve the real problems of the organizations.

Increasingly, we attract awesome people for their transformative purpose, delight them for the opportunity to develop mastery, and engage them with the autonomy necessary to experiment and learn new products and services that will accelerate the growth of our business. It is for this reason that we recommend that the acceleration strategy for Business Agility programs explicitly include an objective related to talent management (attract, develop, and lead).

e) Awesome Experiences

Finally, the fifth variable in our equation is associated with the relentless pursuit of delighting all stakeholders, going beyond the Modern Agile principle of "Make (Psychological) Safety a Prerequisite." It is important to understand that it is not enough to have awesome people, awesome technologies, awesome processes, and even awesome results if the organizational culture is the cause of toxic experiences of customers, employees, and other stakeholders.

We need to be customer-obsessed, as Jeff Bezos proposed in Amazon's Leadership Principles, but also be aware of other stakeholders' perception of value. Only then will we be coherent in the design of the experiences we intend to deliver and consistent in the delivery. Always remember that it is the experiences that exponentialize our results.

To think about ...

The discourse of Business Agility is increasingly present in large technology-based companies and large consulting firms that intend to "surf the third wave" of the agile movement in the corporate world. The problem is that most continue to focus more on people, processes, and products (first wave) than on the business itself (third wave). Not to mention those that focus on Agile at Scale (second wave) as a synonym for Business Agility (it does not guarantee the acceleration of business results, but it certainly guarantees the acceleration of operational cost growth).

We want to reach the top management in this third wave of Agile thinking with a true business mindset, the one of a Business Driven Transformation. To do this, we need to make leaders and managers aware that Business Agility is about how we make our businesses awesome and do this with the elements of our formula. If exponential growth is truly desired by top management, the variables of our Acceleration Factor must be considered as priority strategic objectives of the company.

Regardless of the methods or frameworks that your company will use, the Lean, Agile, and Exponential approaches are the triad of the methodological basis that you should stimulate in the organizational transformation process. But these approaches need to be translated to the business perspective in order to make them effective in a Business Driven Transformation.

Finally, we recommend the development of the Core Competencies of Agile Business Ownership in all business leaders and managers in order to make them the first awesome people who will catalyze the organizational evolution.

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If you enjoyed this content and want to use the Awesome Business Formula in lectures, courses, and articles, be my guest! Just don't forget to reference this article and tag ABO Academy in your social media posts.