People, process, and technology.
It’s a simple formula that describes what makes any business operate. For decades, those who shape business thinking have ranked them as follows:
1. Businesses are collections of processes.
2. Businesses hire people to perform roles in those processes.
3. Businesses use technology to automate processes or process steps.
Process is the centerpiece, or it is so long as you ignore all of the logic and accumulating evidence that says it isn’t so.
It can’t be. No matter how well-designed its processes and how superior its technology, a business with disaffected, unmotivated, apathetic employees … led poorly by definition … will fail.
Nothing can overcome the wrong people.
Great employees, in contrast, will get the job done whether there is a process in place or not, let alone whether it’s a good process. They will get the job done with substandard technology. They will get it done, even when company management puts barrier after barrier in their path.
Business consultants call these employees “heroes.” Succeeding through heroics isn’t supposed to be good business.
And it isn’t, because relying on heroism is like relying on luck. Eventually, luck runs out. Eventually, too, heroes fail to beat the odds that are stacked against them.
Many in business, when they use the term “hero,” do not mean it as a compliment. This makes no sense. Men and women succeed through heroics because they must, not because they choose to: With better processes, technology, leadership and support, extraordinary effort might be less necessary. Until then it’s the source of business success.
Great employees succeed no matter what. Bad employees fail no matter what. Most employees create superior results with the right leadership but don’t insist on it: Badly led, they become apathetic losers.
With the right leadership most employees succeed. Without it most employees don’t. It’s true of leaders but not of technology or process.
Then there are customers. It’s a rare business that succeeds without them. Supposedly, they no longer feel any loyalty.
So let’s look at baseball. Some teams have fanatically loyal fans — teams like the Boston Red Sox and New York Yankees, who have been known to win from time to time, but also teams like the Chicago Cubs, who, if they fail to win the World Series next year will have achieved a full century without one.
Something these teams have in common: They have never threatened to leave for economically warmer climes or better stadia. They have, instead, maintained a steady, warm bond with their fans, who enthusiastically return the favor.
Some businesses that are not baseball teams also sustain loyal customers. Once upon a time there was, for example, the Green Mill, a “three/two” joint (that is, it served weak beer) on the corner of Grand and Hamline in St. Paul.
The Mill was the center of my social life. It was more than that — it was the center of a community. Less sanitary than Cheers (but then, isn’t any worthwhile bar when you’re young?) it was the place everybody knew my name.
Everyone knew Galvin’s name as well. I recall an occasion when Galvin cashed a check at the Mill. Bikko, who tended bar at this fine establishment (and was known to buy a round from time to time), asked if the address on the check was correct. Galvin affirmed that this was so.
Bikko took a second look. “Hey, this is our address!” he said. Galvin affirmed that this was so as well.
“Makes sense to me,” Bikko remarked as he handed Galvin two tens and a five.
The Green Mill is now a classy, faux-potted-plant-laden chain of gourmet Italian restaurants. It has strong process that creates great product — Chicago-style deep dish pizza and gourmet beer. But nobody knows my name, nor wants to.
I might go there for a meal once every year or two.
The Green Mill of my youth didn’t become a community through process or technology. It didn’t do so through product quality either: The beer was thin and the pizza was, so far as we could tell, cardboard covered with cheese.
I was there every night. It was home, because Bikko behind the bar and Schultzy at the tables were our hosts and our friends.
If it matters, research confirms that customer loyalty comes from loyal, committed, enthusiastic employees more than it comes from any other factor, and that business success comes from loyal customers more than it comes from any other single factor.
The research isn’t really necessary, of course — all that’s needed is a moment’s reflection.
It isn’t the technology. It isn’t the processes. It isn’t even the products.
It is, happily enough, the people.
Enjoy the holiday season. I’m going to take a week off — see you in 2008.