Monday, January 3, 2011

Secret to Growth: The Power of No, Part 1

In my last post of 2010, The Power of Yes, I talked about the power of yes in the exploratory phase of a venture. The power of yes is the means by which entrepreneurs create something from nothing;  it is the means by which they create a business system which enables the resources of others to be transformed into value that is mutually beneficial to all of the contributors and beyond.

Yet, as a venture moves out of exploration and into growth mode, the power of yes can cripple it.  Instead, a different power, one I call the power of no, must be invoked.

The power of no comes in two flavors.  One is a decision and comes from within.  The other is constraining and comes from without.  To see how these work, I bring you two lesser known sequels to two popular tales.  Today's tale deals with the power of no and decisions.

Stone Soup: The Sequel*
Stone SoupWhile the story of Stone Soup is well known, what is less known is what happened afterwards. Here is that tale:

Not long afterwards, Hok decided to set off on his own.  Saying goodbye to Lok and Siew, he traveled deeper into the mountains.  After several days, he came across another village, just as war ravaged and frightened of strangers as the last.  Remembering what he had learned from Lok and Siew, he proceeded to the town square where he met a young boy.  Soon, just as before, Hok had a huge pot of water and began to build a fire underneath it.  And just as before, each villager, curious as to how one could make soup out of stones, thought of something that would make the soup even tastier and would run off to fetch it.

As the villagers returned with vegetables, herbs, meat, and all sorts of supplies, three soldiers approached Hok and asked what he was doing.

"Making stone soup," replied Hok.  

"Hmm," said one of the soldiers looking at the food piling up near the pot, "You know that there are dangerous bandits just outside the village that might steal all that has been gathered.  They are probably watching right now.  I'll tell you what, give us something to eat and a share of the soup when it's finished  and we'll guard the square for you and make sure nothing happens."

"That sounds reasonable," agreed Hok.  So the soldiers took some of the food and posted themselves around the square, looking fierce.  And the soldiers having large appetites, periodically helped themselves to the food being prepared for cooking.

Shortly thereafter, Hok was approached by an earnest young man.  "Please sir, we have the makings of a great feast and my brothers and I have been tasked with setting the tables.  The tables would look much nicer with some festive decorations.  We could carve some of the carrots and potatoes into beautiful table sculptures if you would give us some!"

"Of course!" said Hok. And soon the young man and his fourteen brothers were carving basketfuls of carrots and potatoes into beautiful statues of dragons and tigers and fish for laying out on the festively adorned tables.

Next, one of the village merchants approached Hok.  "Young monk, I know where we can get wonderful crabs that would make this stone soup fit for the Emperor's table!  There is a fishing village just fifty miles over the ridge that in exchange for some of our vegetables would sell us these crabs.  I've much experience trading with this village and can guarantee that these crabs are the tastiest in all China.  What do you say?"  Hok thought about it and nodded, and the merchant quickly loaded up most of the vegetables gathered in his cart and set off.

Finally, the water began to boil, and Hok began to add the food to the pot.  Strangely, the pile of food had dwindled to a few carrots, an onion or two, a couple of strands of noodle, and a small piece of beef.  The soup looked much less rich and the aroma wasn't quite as tantalizing as Hok remembered.  "Maybe it just needs to cook longer," he thought.

So Hok cooked the soup for hours.  The sun set as the soup continued to bubble.  The aroma, while thin, was still enough to whet everyone's appetite and soon the grumbling began.

"When is the soup going to be ready?" whined one.

"Doesn't look like much of a soup to me,"  said another.

"I knew the idea of cooking stones was too good to be true,"  grumbled an old man.

"Where is that merchant with the crabs?" wondered an old woman.  "Right now, I'd rather have the vegetables he took cooking in the soup than the promise of crabs that aren't here!"

"Let's add the table decorations to the pot!"  said one child.  "There's plenty there to make a good soup!"

"No!" cried the young man and his brothers,"  Then the table will be dull and lifeless for the feast!"

"What feast fools?" cried the old man.  "The feast is sitting in the bellies of these soldiers guarding against what?  Not only do we not have stone soup, but there is no more food in the village!"

"It's the monk's fault!"  yelled one of the soldiers.  "It was his idea.  He swindled us with his idea that we could make soup out of stones!  Let's stone him!"

With that, Hok leapt up and ran as the villagers began to pelt him with stones.  He ran all night, not stopping until he was back in the safety of the monastery.  Sad and confused, he spent many months pondering what had gone wrong.

It is a well known tenet of strategic planning that strategy is about no, not yes.  Where resources are limited, focus is key to ensuring that they are deployed effectively.  Why the power of no is so important for entrepreneurs is that by nature, entrepreneurs see opportunity everywhere.  While a strength in the startup phase when one is trying to discover and create a business, it can be a liability in the growth phase which is about executing the business model.  By seeing opportunity everywhere, the entrepreneur can fritter away precious resources on possibilities instead of using them to advance the opportunity that has been vetted.

So how does one invoke the power of no?  Here are some tips on that subject.

Stay tuned for next week's tale about the constraining power of no.

* My apologies to Jon J. Muth

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