Posted on April 30, 2019 by Danny Windsor

According to Merriam-Webster’s online dictionary, balanced is defined as “being in a state of balance : having different parts or elements properly or effectively arranged, proportioned, regulated, considered, etc.” Merriam-Webster defines well-balanced as “nicely or evenly balanced, arranged, or regulated.” Individuals and organizations that are well-balanced are much more effective in accomplishing their goals, have less stress, and are formidable competitors within their sphere of activity. We can easily see this in the sports world as teams that are well-balanced tend to win the most championships because there are no glaring weaknesses for a competitor to exploit. The same is true of the strongest companies. They tend to be well-balanced in all major areas.

How do organizations achieve and become a well-balanced machine that can grow and prosper achieving the goals they have set? Verne Harnish in his book, Scaling Up, says “To scale the business requires getting four key decision sets- People, Strategy, Execution, and Cash(emphasis mine)- absolutely right, and there are right and wrong answers. Shortchange(emphasis mine) any one element and you’re not maximizing your opportunity(Harnish, p.9).” Being strong in all four areas (People, Strategy, Execution, and Cash) will enable a business to be well-balanced.

Harnish says there are four key questions that need to be asked by company leaders pertaining to each area as follows:

People– “Are the stakeholders (employees, customers, shareholders) happy and engaged in the business; and would you “rehire” all of them(Harnish, p.10)?”

Strategy– “Can you state your firm’s strategy simply-and is it driving sustainable growth in revenue and gross margins(Harnish, p.12)?”

Execution– “Are all processes running without drama and driving industry-leading profitability(Harnish, p.14)?”

Cash– “Do you have consistent sources of cash, ideally generated internally, to fuel the growth of your business(Harnish, p.17)?”

I highly recommend business owners obtaining a copy of Harnish’s book, reading and implementing the recommendations within, and setting your company on a path to being a well-balanced organization.

*Harnish, Verne, (2014), Scaling Up

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