Every business consists of five components
essential for its existence, survival and growth -- market,
products and services (technology), organization,
people, and finance. Take away any one of these components and the company ceases to
function. Each of these five possesses unlimited potentials that can be tapped to
transform the component into an engine to drive the growth of the company. The maximum
achievement results when all five components are energized and developed in a balanced and
harmonious manner.
Where the accumulated energy of the company is the fuel
for growth, the five engines utilize the fuel and drive it to growth and
profitability. Just as more energy in the company provides more fuel for combustion,
so to the well-being of each of the engines determine the final outcome. Together the fuel
and the power of the five engines drive the company to growth and prosperity. The
stronger the combustion, the more powerful the results.
Let's define each of these five engines
more closely.
- MARKET: This component
includes the company's relationship with existing and potential clients/customers, its
knowledge of changing needs and opportunities in the market, the way it identifies and
reaches its clients/customers, the quality and speed of service it provides, marketing,
advertising, and the selling and management skills its possesses.
- PRODUCT AND
SERVICES (Technology): This
component refers to the capacity of the company to deliver products and services. It
includes the range and quality of products/services it markets, the technical knowledge
and skill of sales and service staff, and the level of technology incorporated in its
products/services and utilized to carry on business.
- ORGANIZATION: This is the
component that holds everything together and forms it into a living whole. Organization
consists of the structures, systems, policies, procedures and activities of a business,
the manner in which it exercises authority, takes decisions, communicates, coordinates and
integrates its activities.
- PEOPLE: This component
covers the energies, abilities, skills, and attitudes of employees that can be harnessed
for growth. People and companies grow together. Those companies that provide maximum
opportunities for their people to grow find maximum opportunities for their own growth.
- FINANCE: This component
defines the way in which the company manages, monitors and utilizes capital resources for
its growth. It includes the quality of systems and skills for accounting, budgeting and
financial management, cash and credit management, control over purchasing and inventory,
access to capital.
Balancing The Five Engines
The performance of a company is determined by the extent to which it utilizes its
potentials. A business achieves maximum performance when each of its five engines is
fully developed, and when all five are developed in a balanced and harmonious manner.
When the development of the components is uneven, the weaker components prevent
full utilization of the capacities of the stronger ones.
For example, a company with a good
reputation in the market or excellent products will not be able to fully leverage these
strengths if its people lack critical skills or its organization cannot
respond quickly to growing market demand (as shown in the accompanying on-screen graph).
We can also see that the company is as strong as its weakest engine (as indicated
by the black bar across the following chart).
Balancing The
Five Engines
YOUR COMPANY:
-Review the definitions of the five engines above again. Then think about how
your company rates on each of the engines based on the definition. Be sure to
indicate where there are problem areas at your company (within the engine
definition). Try to get other people's feedback in making the determination.
-What changes can the
company make to overcome the problem areas? How should it be done? When should it be
done? Who should do it?
-Make the changes ASAP!
-To see a list of strategies to improve each of the five
growth engines, click here.
FURTHER READING:
-To review
a more detailed explanation of the five growth engines from the book The Vital
Corporation, please click
here.
(MIRA)
RESOURCES:
-Guru!
Software's
Double It! strategic planning software
works from this premise in evaluating the health of the company.
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