The Root Cause

Rethink Your Approach To Solving Stubborn Enterprise-Wide Problems

The Missing Link in the Value Chain™

KNOWLEDGE will not attract money, unless it is organized, and intelligently directed, through practical PLANS OF ACTION, to the DEFINITE END of accumulation of money. Lack of understanding of this fact has been the source of confusion to millions of people who falsely believe that “knowledge is power”. It is nothing of the sort! Knowledge is only potential power. It becomes power only when, and if, it is organized into definite plans of action, and directed to a definite end. This “missing link” in all systems of education known to civilization today, may be found in the failure of educational institutions to teach their students HOW TO ORGANIZE AND USE KNOWLEDGE AFTER THEY ACQUIRE IT.

Excerpt from “Think and Grow Rich” by Napoleon Hill Chapter V.  on Specialized Knowledge

This failure to teach how to organize knowledge is a boondoggle for consultants, coaches, speakers, and writers alike, because there’s always a new piece of information that can be shared, a different angle from which to perceive and approach a specific challenge, or a new skill that can be transferred, while certifying participants in the process for a fee. By now, we’ve all heard of the Product Funnel—a proven Up-Selling tool.

Because of methods of education, our knowledge is highly fragmented into ever higher levels of specialization. In other words, we no longer perceive a business as an integral system, but as a collection of meaningless component parts. And, people have been reduced to a collective toolbox filled with answers and solutions.

All the while, we are ignorant of the critical questions that are begging to be asked, and of the problems that want to be recognized and measured, and of the root cause(s) that remain uncovered at our own peril. In addition, investments in the latest and greatest in tools and technology, systems become more complex, which in turn demands insertion of additional hierarchical levels of planning and control. Subsequently, decision makers with ultimate authority to change the system, thus with ultimate responsibility for success and failure of the business, become ever further removed from the core business.

Organizing Principles

Napoleon Hill was referring to the core business when he wrote: “practical PLANS OF ACTION, to the DEFINITE END of accumulation of money.” In short, what exactly do you intent to give in return for the money you desire. (There is no such thing as “something for nothing”.)” Here he is talking about organizing principles.

The means for the realization of the “DEFINITE END of accumulation of money” IS the business system. Therefore, the purpose of a business system is the creation and delivery of whatever you “intent to give in return for the money you desire.” Consequently, the form a business system takes―its design, structure/organization, and construction―is inherent in its purpose. After all, form follows function. Therefore, the only (U.S.) businesses whose purpose it is to “make money” are the US Mint and the US Printing Office! Everyone else will have to earn the money they desire.

Keep in mind what Wallace Wattles wrote in his book The Science of Getting Rich: “You cannot give every man more in cash market value than you take from him, but you can give him more in USE VALUE than the CASH VALUE of the thing you take from him.” In other words, your profit margin―the applause you receive for a job well done―is the difference between cash market value and use value. Note that no buyer will give you more in cash value than the use value you provide, unless users have no other choice but to buy from an oligarch or a monopolist. Hence the attractiveness of mergers with, and take-overs of one’s competitors for leaders who fail to create enough use value to warrant accumulation of the amount of money they desire. Mergers and take-overs are seen as alternative strategies for “raising bottom-line results.”

Questions to Ask Yourself

What IS the use value of your products or services? Why should buyers/users do business with you? Why should they contribute to your “DEFINITE END of accumulation of money”?

Creating use value is the art of Entrepreneurship. So, how do you organize the potential power of knowledge in the creation of use value? The task of creating a business system is also known as Business Process Engineering!

Systematizing all tasks, activities, processes, and functions is important because you don’t want having to invent the wheel for every sale, and you do want the outcome of your operational processes to be predictable—you want the system to be stable and show no signs of special cause variation.

Hence, it is inevitable that a large number of decisions cannot be made according to economic principles alone—reducing cost and increasing efficiency. So, what are your values, morals, beliefs, or vision—the governing principles of which you know they will give you peace of mind? How do you want to be known, remembered―what do you want your legacy to be?

Go with the Force

Recently, I read an article in which the author prescribed imperatives to the reinvention of business, such as Know Thyself, Think Unconventionally, and Overcome Fear. He is not wrong about their importance―knowing oneself includes knowing one’s limitations―but how do they help you reinventing your business? As it happens all too frequently, when it comes to translating theory into practice―the critical situation in which the rubber meets the road―you are left to your own devices when you need help most urgently.

His advice either assumes that his audience is well versed in Business Process Engineering, or he assumes what Napoleon Hill called the “missing link” in all systems of education known to civilization today is a myth. Yet, an IBM study showed that a majority of leaders is perplexed by complexity and change. This means they fail to understand how disparate kinds of knowledge, ideas, tools and technology are networked into an integral business system.

So, where is the use value in his advice for the reinvention of a business? Everyone knows that the practice of making changes to an unfamiliar system is called Trial-and-Error, which does not exactly qualify as unconventional thinking. Reading articles like his begs the question, how much of this kind of leadership advice will actually be implemented?

Study, including continual education, is very important. However, there comes a time where you’ll have to trust yourself, and realize that what you know now is sufficient, and are aware of what you don’t know, and that you are not too proud to ask for help. Give others a chance to make a valuable contribution too!

Everything everyone talks about, from creativity, innovation, disruption, authenticity, to agility, is a matter of applying the appropriate organizing principles―connecting knowledge into a practical plan of action, and directing that plan towards the creation of maximum use value. Why? Because creating use value attracts money. Don’t adopt unquestioningly what others did, assuming they would know what they’re doing. Go figure it out—think critically for oneself!

In Conclusion

Do you know what your Organizing Principles are? Can you explain why you are in business? Have you formulated what your mission is? Can you articulate why pursuing this mission is important to you? Hence, do you have a succinct definition for the purpose of your business is—why you would go such great lengths to create a means of production? What is your vision for the world we live in? And, most importantly, do you feel passionate about your own answers?


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