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the story of companies that survive in time

December 1, 2020 10 min read

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Opinions expressed by Entrepreneur contributors are their own.

There are four types of companies: dying, inefficient, predatory, and total. The virus has been the trigger for many new stories. For your company to be complete, it must generate economic value, relational value and adaptability.

Screenwriter Robert McKee affirms that good stories are born when an external factor (or “trigger”) transforms the life of a certain protagonist. The narrative, then, tells of that person’s struggle to regain the lost balance. Aristotle defined three moments for all this to happen: the approach, the middle and the end. Following those parameters, today I will tell you an authentic scoop and story.

The approach

In Barcelona, ​​a business consulting firm has a particular vision of organizations. Years of work and observation led its members to conclude that the sustainability of an enterprise does not only depend on the money it is capable of generating.

Image: Scott Graham via Unsplash

The idea seems shocking. Until now everyone believed that if an organization lost money for a long time it would end up bankrupt. And it is true. But we also thought that the opposite was also true, that is, as long as it had benefits, it would survive whatever happened. And no: there are profitable organizations that end up disappearing.

Obsessed with understanding the phenomenon, my friends at SOLO Consultores investigated until they found a reason. They identified three main variables in a trial called “The Total Company” and subjected them to an empirical test before 238 business executives with the help of E-Motiva, another specialized consultancy.

The test validated the idea: the sustainability of an organization depends on three factors. The first is the well-known economic value (that is, the ability to generate income in excess of costs). The second is relational value (that is, the ability to generate healthy and cooperative relationships within and outside the organization). The third is the ability to adapt (that is, the ability of the company, as a system, to adapt to changes that occur in the environment).

The sum of economic value, relational value and adaptability results in a total value , which makes a company become perennial, that is, “Total”. If one of the three variables tends to zero, the organization risks disappearing sooner or later, no matter how much money it earns.

The virus as a trigger

For many companies around the world, the emergence of COVID-19 will represent a trigger and the beginning (or end) of their current story. Without giving specific names, I am going to tell you examples of things that are already happening.

The first: surely you have already read in the press that some once profitable organizations are not knowing how to adapt to the changes brought about by the pandemic: loss of customers, plant closures, collapse in after-sales service … Almost certainly, these organizations will not they had cultivated their ability to adapt to change. They never trained her. And I know that no one could anticipate the virus, but an organization used to adapting takes much less time to find solutions to new problems. The virus threatens to wipe out organizations that were making money but had settled into a comfort zone.

The second: you will soon hear from some organizations that were agile and adaptive and that are already generating great benefits even during the pandemic. However, some of them care so much about money, and so little about people, that the quality of human relationships (inside and outside of them) will decline. Soon your employees will make bad press of those companies, they will elope to others or they will go on strike. If they do not change, these profitable companies today will end up being forgotten by the market.

The knot

At the end of 2018 my friends from SOLO took a step forward. Far from staying still in their initial comfort zone, they contacted other firms in the same sector, some of them direct competitors, and invited them to cooperate in something that still had no form. They shared their Model with them and proposed that they work together to make it grow.

This is how, with little more than good faith and intuition, 25 specialists in different business disciplines agreed on a first development: to write a practical guide to the Total Value Model. Its purpose was to create a tool with which any manager could be guided to create Total Value in the organization, that is: a guide to create both economic value, relational value and adaptability.

Image: Antenna via Unsplash

They gave me the opportunity to collaborate with them in the editorial coordination of the book (that’s why I know what I’m talking about) and, in addition to the 25 co-authors, we have collaborations from international references such as Xavier Marcet, Rafael Andreu, Sergio Krupatini, Loreto Rubio, Joan Quintana and Lluis González de Rivera.

After a little less than a year the texts of the book were finished. It may seem like a long time to you, but there was a lot of homework to do apart from writing the book: we had to get to know each other, organize ourselves, connect and get used to working side by side.

Again the virus

In all the stories, the protagonist has several fights with his antagonist. That is what generates narrative tension. So I’m going to talk to you about the virus again. When the confinement was officially ordered in Spain, in mid-March 2020, many consulting professionals saw how our projects were postponed or lost and how, suddenly, we were prevented from going out to the streets to offer our services.

What’s more, many of our clients had serious problems and no longer even had time to receive our calls. Given this situation, the public presentation of the Total Value practical guide was postponed indefinitely.

That could have been dramatic and, in fact, it was for many people. But the 25 consultants had learned to work together and began to meet in videoconferences in the afternoon and evening. Many of us learned to use Zoom and other media thanks to those meetings and the advice we gave each other.

During the worst of the pandemic, we spent long hours exchanging knowledge. Each presented what they knew how to do to the others. Each learned new techniques from the others. We also wove new possible alliances that, over time, gave rise to professional collaborations. In May we decided to create an expert network, the Total Consultants Network, which is already active and open to new professionals from all over the world.

In those weeks, we may not have achieved our respective billing goals (economic value), but we did generate a lot of relational value (we became friends and, in a way, partners) and we developed a lot of individual and group adaptability.

Outcome

The book “Total Value Management: Guide to transform your company” was published by Profit Editorial last month. It is perfectly illustrated and presents no less than 20 practical tools spread over 13 chapters. It also has a case study chapter showing the benefits of using the method. If God wants and the virus does not prevent it, it will be presented at a public event (face-to-face or virtual, we’ll see) before the end of 2020.

Additionally, the Total Consultants Network has started a new empirical study, undoubtedly more ambitious than the first. Under the title of “Total Value Index 2020” it is in the data processing phase, after having collected opinions from nearly 450 executives and professionals from different countries. The results will be surprising. They will show, for example, that organizations that make a lot of money but treat their employees badly deserve to be called “predators.” And those that treat staff well, but lose money, are “inefficient.” And there are “dying” companies that neither give money, nor treat people well. All of them are at risk of disappearing, if they do not change their behavior.

However, organizations that treat people well, that are driven by profitability objectives and that spend enough time learning to adapt, deserve to be considered “Total Companies”. Those organizations will prevail over the virus. They will be able to rediscover their balance after the triggering factor.

The lessons

Image: Nils Stahl via Unsplash

I recently read a brilliant phrase: “Every crisis has three things: a solution, an expiration date and a learning.” With all personal conviction, this time I recommend that you do everything possible so that your company cares about treating people and customers well. Do what is necessary so that your organization knows how to adapt to changes and, as soon as possible, launch yourself for economic profitability.

If you want a good story on how to make it possible, I refer you to the book Total Value Management and the reports that the Total Consultants Network will soon publish. But you will recognize that this story is so beautiful that, put in the hands of a Hollywood screenwriter, it would make a good movie.

The best part is that it is a true story.