The Kennedy Space Center houses the massive Saturn V that sent three intrepid explorers to walk on the moon July 20, 1969. As you can see, my wife and I are dwarfed by the sheer size of the rocket. Contemplating different aspects of this accomplishment has helped me come to an understanding of the three keys that enabled the U.S. to achieve this goal. The first two keys are having a clear purpose — putting a man on the moon by the end of the decade — and a strategic plan as discussed in prior “ABA Insiders.” This week we’ll discuss the third key– POWER.
When a Saturn V takes off, it does so under what’s really a controlled explosion caused by the ignition of kerosene with oxygen in the five main rocket engines to produce a combined 7.6 million pounds of thrust (the equivalent power generated by 85 Hoover Dams) to lift the 6.2 million pounds (the weight of about 400 elephants) off the launch pad.
Just as it takes both kerosene and liquid oxygen burning together to produce the power to accomplish the mission, it takes the combustion of human and financial capital to give a business the momentum to accomplish its mission. The best purpose directing the finest strategic plan is useless without the right people and necessary finances to enable the owners to fly their business through success to significance, or as we at American Business Advisors say, Building Cash Cows® and Improving Quality of Life®.
So how do you know that as an astronaut or a business owner, you have the power sufficient to achieve your strategic plan and purpose?
Let’s explore what it takes to produce power in your business.
- Our company has power.
Many business owners believe that if they a have sufficient line of credit and money in the bank they will be able to achieve their purpose and plan. Similarly, they believe if they have hired the right talented people, the work will get done. So there are two questions that need to be addressed. Just as the Saturn V needed the right ratio of kerosene and oxygen to accomplish its mission, so too your business needs the right mix of human and financial capital.
What are some signs that you have the right amount and mix of financial capital?
- You have steady and well planned cash flow
- You do not treat your business as a “piggy bank”
- Your goal is not to minimize your tax bill, rather to optimize your company’s ROI
- You have the right debt to equity ratio
- Your product or service delivery is facilitated, not impeded, by cash flow
How do you know whether you have a healthy and thriving pool of human capital?
- You not only retain but delight your customers and employees
- You have low turnover
- You have high employee engagement
- You have the right level of talent for each position
- You provide the right balance of authority and responsibility to match employee abilities
How do you know the “mix” is right? Just as you can compare year over year results in your Balance Sheet, you can listen and learn how employees feel about the business. Your purpose and strategic plan direct the right number and talents of employees and the right financial metrics. Together, these should “work” regardless of what changes in or around your business over time.
Having power in reserve will enable your business to “blast off,” according to the properly architected Formal Strategic Plan, and achieve its purpose — no matter what circumstances befall your company.
Question: Do you have the correct mix of power?
Sources: www.Space.com Apollo Saturn V Moon
If you want to see what liberated human capital looks like, check out this excerpt from the recent movie, “Hidden Figures.” Back in the day when computers were human beings, this portrait of three African women whose strength of character and intellectual brilliance got the Mercury program off the ground.