01 January 2021

The Core Idea

"Human history is, in essence, a history of ideas."

--H. G. Wells

Geologists estimate that 3,200 miles beneath our feet lies a “Solid Inner Core” of the Earth made up of iron whose diameter is 70% the size of the moon. (Red)     

There are three other layers of the Earth:  

-A "Liquid Outer Core" the size of Mars. (Gold)

-A "Mantle" 1,800 miles thick composed of different kinds of rock making up 84% of the Earth's total volume. (Olive)

-The layer closest to the surface is called the "Crust" also composed of rock and representing 1% of the Earth's volume. (Gray)
(C) NASA

If you cut the Earth in half, like an apple, that's what you would see: Solid Inner Core; Liquid Outer Core; Mantle; and Crust.  

With a surface as hot as the sun, the Solid Inner Core is a source of creativity, energy, and selective destruction.  Spinning faster than the Earth itself, the Solid Inner Core is leading, not following, even though hidden from view.    

What's a core idea?

Organizations, big and small, that consistently accomplish their aims do so with a simple idea that shapes and drives the enterprise.     

Take UPS, for example.  

Founded in 1907 as American Messenger Company by two teenage boys, James Casey and Claude Ryan, with a $100 loan, the business prospered by providing the best service at the lowest rates.  Cars were scarce so reliable and courteous teenagers were hired to deliver telegraph messages, pharmacy orders, and groceries to homes around the Seattle, Washington area on foot and bicycles.

That was the core idea.
More than a century later, Atlanta-based UPS partnered with FEDEX in the U.S. to ship 2.9 million doses of the Pfizer-BioNTech vaccine to mitigate against Covid-19.  That may have been the most important pharmacy delivery of all time.      

As it lives and breathes

Clarity on the concept of a business or nonprofit comes from a critical mass of employees making the idea come alive. Those same individuals are also stewards of the organization's spirit and aspirations.  Having "culture carriers" throughout the system is an informal way of socializing new associates and advancing institutional knowledge.  

Trusted individuals who lead by example often produce better HR outcomes than formal mentoring and development programs.  Healthy working relationships, clear expectations, and comprehensible goals underpin a successful execution of strategy.  

Also noted in the research is that the core and identity have an interdependent relationship. Combined, they're central, enduring, and distinguish the enterprise from its peers. (Albert and Whetten, 1985)  For identity to be clear the core must be clear--especially as it's reinterpreted and reimagined for an emerging workplace and world.  

It's the serious qualities of a firm, such as wisdom and good judgment, which resist bad change and accept good change.  Absent honesty and moral courage in an organization's leadership, anything goes.   

Rethinking the core
"... no humanly constructed core idea or business endures forever in its original form."
The data in consulting libraries show that organizations often fail to take advantage of the full potential of their main business.  Not getting enough from what it already does the next move is to abandon the core and start chasing after someone else's ideas.     

Eventually, someone holds up a mirror and discovers those borrowed ideas don't fit. Only in retrospect does management then see the error of its ways. For some, it's too late while others are fortunate to get another chance.

Writing in Scientific American, Claude J. Allgre and Stephen H. Schneider remind us that the Earth and its atmosphere are continuously altered.  "Plate tectonics shift the continents, raise mountains, and move the ocean floor.  Such constant change has characterized Earth since its beginning some 4.5 billion years ago." 

In a similar pattern, no humanly constructed core idea or business endures forever in its original form.  

Why?  

Over time the assumptions on which the organization has been built (environment, mission, capabilities) and is being run no longer fit reality. ("Theory of the Business" by Peter F. Drucker)

As a management practice UPS periodically updated its assumptions, building on a stable core with a disruptive edge.  From bicycles to drones and back to bicycles.  Delivering messages to managing sophisticated supply chains. Over 5,000 independently owned The UPS Stores franchised by the corporate parent in the U.S., Puerto Rico, and Canada.

The company spans 114 years but keeps the aging process at bay by holding to its original values of reliability and high ethical standards while staying close to customers.

Is this a good time to revisit your assumptions and where the core business should go next?

Management writer, Dr. Chris Zook, who studies core structures offers strategic questions--

1.  How do you know when your core needs to change in some fundamental way?

2.  How do you determine what the new core should be?

3.  How do you go about measuring the vitality which remains--is the energy exhausted or does it still have legs?

4.  How profitable are your customers, and how loyal?  

Remaking commerce

One reason makeovers have a high rate of failure, some say as much as 70% (McKinsey & Company), is that businesses tend to travel great distances seeking success in unfamiliar territory (Microsoft and Nokia). Those in the 30% who succeed stay close to home (Disney and Pixar).  

What do they discover?

Hidden assets.

"The real question," says Dr. Zook, "is how to open management's eyes to the hidden assets in its market. How to mine the treasure that's within their reach."    

Planning ahead

Coronavirus is doing something to your employees and customers.  The full impact remains to be seen.  In the meantime, here are additional questions to consider as you think about the future--

o  What's your core idea and business?
o  What's worth keeping in the core?
o  What needs changing or remaking?
o  Are current customers aging out?
o  Where will you find new customers? 



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