The Bacon Rules of Business
Isn’t it time we related the almighty dollar to one of our most distinguished proteins? That would be, of course, bacon!
Bacon — the all-American icon of meats. The irresistible breakfast delicacy that can add power to just about anything except, perhaps, yogurt.
This was not exactly how I intended to explain the three things a business has to worry about to stay alive. But, it just so happens to be the perfect analogy.
If you have read any of my previous articles, then you know I talk about what I refer to as the Ultimate Human Dilemma (UHD.) The UHD is, at the most basic level, the frictions between the functions (of the brain) that leads to the dysfunction we experience amongst our teams and within our companies. The functions I am referring were first introduced by Carl G. Jung in 1921 in his book Psychological Types that was later used to form the most widely used personality assessment method in the world (Myers-Briggs Personality Type Indicator, or MBTI™.) — figure to the left gives a brief description of Jung’s brain functions that I refer to as the “hardware.”
I take great caution to not come across as another narrative of the typical forensics of failed companies. Nor do I want to sound like the next person with a list of “the 7 things a CEO should do” or “13 reasons why businesses struggle.” This pontification space is over-crowded, to say the least. Each day there are plenty of business and personal development blogs that may change the bandage but they do not stop the bleeding. For this, you must know what is causing it.
While in the brainstorming process for coming up with a way to tagline these three things, a colleague of mine asked me, “why not call them the bacon rules? You know, like the saying bringin’ home the bacon?” At first, it seemed corny but in the years to follow and as I continued to write about the UHD it continued to seem the perfect way to describe the only three things a company must keep a focus on to survive.
Bacon is a perfect financial analogy for money, currency, capital, etc. It can be used as the general description of stock prices, valuations, bottom and top lines, and even returns on investment. I sometimes wonder if even the average CFO can explain how cash and capital actually “flow” or, how valuations are any different than trying to understand imaginary numbers?
All I know about this imaginary number system is if I had ten dollars in my pocket, I know what I could buy with it. I also know it will be worth less than ten dollars in ten years unless I turn it into an imaginary number system that magically makes it produce coins as offspring. “Is it not the entropy of money?” I asked myself. When I googled the question, I found a blog by David Galbraith, who wrote:
“Like entropy, where there is no universal unit (and no such thing as an entropy meter) with money there is no such thing as a universal currency. Also, money is not so much a ‘thing’ as something that exists because of a perceived value relationship when things move or change hands.”
So, let’s not put dollars into a “cash cow” but, rather, turn it into good ole’ bacon.
Instead of a company, you have a farm. Instead of dollars and resources, you have pigs and the bacon they produce. From here on I will use the terms ‘farm’ and ‘company’ synonymously as well as ‘products and services’ with ‘pigs or bacon’.
Now, let’s say you buy a farm. Like most farms you have livestock and farming equipment that is financed as well as commitments to the downstream market. You likely have cooperative agreements with other farmers, suppliers, and services. Your goal as the owner of the farm is to stabilize and grow your bacon cache year over year. You want it to be healthy bacon that can be sold at a premium or held as livestock (pun intended) with the highest valuation. Make sense?
As your farm scratches its beginning in the dirt and you buy a few pigs to fuel the start-up, you begin the process of getting creative. You don’t have the burden of navigating a growth trajectory because one doesn’t yet exist. It has to be created. This is the framework for innovation.
You and your farm boys come up with new ways to grow healthy pigs by feeding them right and collaborating on symbiotic services with other farms. Soon, you start to get noticed in the market. You now have a good thing going. The farm continues to refine and expand its winning concepts to other locations where the model can be mimicked. To support the growth, more farm hands are hired.
Then, your farm needs an infusion of what I call ‘private bacquity’ to support this aggressive growth plan. New farmers with advanced farming degrees come in with their binders full of procedures and begin the process of de-pixelating the faces of the pioneering founders, including yours, even when you still hold onto the CEO title. Soon, the farm spends more time planning its ultimate domination of the bacon market than it does tending to the farm itself. The customers who once valued the symbiotic relationship start to feel as though they are being treated as a nuisance.
Before long, the ones navigating the expanded global network of farms is spending most of the time in their conference stables, as opposed to conference room tables, working on ways to sell this farm of bacon or buy that adjacent farm of ancillary bacon supplies. While this internal focus consumes the new leadership, what is actually happening is the farm is splaying open its collective meat for the market’s true hunters to raid.
The capable farmers in the field that can help pull the farm out of this downward spiral are too busy chasing answers to questions that will not lead to creating, capturing, or killing new bacon rewards. They are unable to articulate what the company needs to do in order to “steer” it away from the drain because the new “silver spurs” in charge are unable to interpolate it. (Growing up on a cattle farm myself, I couldn’t resist using the word steer since it means ‘to navigate’ as well as a male cow that has been, well, neutered.)
Before long, you have been bought out, pushed out, or have no real authority. The few remaining important legacy farmers that are “in the fields” are soon part of building the false belief that a massive bacon ranch is on the horizon. The long-sought reward that will pay the returns to the bacon investors and shareholders who are growing impatient.
The entire farm staff grows more worried and fearful of the future as each quarter passes. Soon, no one is on the same page. Crucial farmers leave the farm for other farms. New farmers are brought in to replace them who will likely, without realizing it, cause more harm than good. The farmers in the field simply stop taking aim at the truly big game and succumb to the easy kills to feed their own families, also known as “low hanging fruit.”
As this downward spiral happens, while everyone is out chasing solutions to the symptoms of the problem there becomes a lost connection to the only three things any farm/company needs to be concerned with for stabilizing long-term existence. Each of the three require a special consideration of the ideal brain functions for the roles as well as what I call the 6 factors of Ultimate Potential. This is where you can drive out, and prevent from coming in, the poisonous individuals that bridle the teeth of growth and innovation.
Peter Drucker once said, “the purpose of a business is to create and keep customers.” Easy to say and surprisingly hard to accomplish. Especially the bigger the company becomes. In the founding years, it is often a symbiotic relationship between the company and the customers that helped form the foothold of mutual value. The energy that built it was on the backs of those few founding individuals. It is what I call an “upright” energy. Upright means you are aware that it has nothing to do with you or your own feelings and everything to do with how it provides for the company’s family — internally and externally.
As the farm steps into that genuine foothold from its new customer partners it begins to grow successfully. It then becomes an established farm with a proud and recognized name. New farmers join and start running the place and soon there are resources to leverage that have never before existed. That upright energy turns into a calmer “success planning” energy. The kind that spends its time around the “stable tables” mapping out the self-declared path to ultimate greatness. This is where collective ignorance becomes the blissfully bankable assurance of where the farm will find its next 3–5 years of bacon to harvest.
In due time the corporate farm passionately believes it has a refined process for “managing growth.” From a big picture view, all that has been done is to consume resources by being inwardly focused and more ignorant of the truths in the market.
The corporate farm still has customers, of course. This is what got it there. But how well does the new suite of business trained farmers know these customers? More specifically, how well do they objectively monitor customer health? I have often seen where a company that has grown stagnant is still holding onto the business of a few market share leading customers from the early days. These customers have grown to be sick over time. They demand an exorbitant amount of the company’s resources just to maintain year over year volume (not profits.) As it continues to focus its resources inwardly, the impact of sick customer demands is crippling. It becomes the sick serving the sick.
Sick customers are ones that are never satisfied, agree to things they don’t live up to, short pay invoices, break their own promises and agreements, and use you as their personal experimental laboratory. The first Bacon Rule addresses how to handle the sick and healthy customers.
Bacon Rule #1 (BR1) — Serve the Customer
To do this well you have to manage your customers like you manage your own production. In this analogy, you wouldn’t put sick pigs in the same yard with healthy pigs, would you? You must have a process that can determine the health of your customers. Think of your customers by way of how easy they are to satisfy and how effectively your company has helped them grow. If they consume a lion’s share of your internal resources yet your year over year growth and profitability are going down, then perhaps they should be allocated to the hospital wing to be managed. You want the right types of brain functions/personalities to manage your sick versus your healthy customers.
When a sick patient tells their nurse they want to go hiking tomorrow, the nurse doesn’t say “you aren’t going anywhere! You’re dying of cancer.” They instead change the subject and redirect the patient in a way that makes them feel like they are getting what they want. In my experience, the best functions for managing sick customers are those who interpret and process the world using the logical thinking function more so than those with dominant feeling functions.
These are the people that are not easy to emotionally rattle, yet are fair and logical. They do not take harsh criticisms to heart. Those with dominant feeling functions tend to get worn-out and exhausted dealing with the unpleasable. They might even become part of the problem by feeding into the drama the customer is instigating versus extinguishing it.
Not all customers will be sick, of course. Ideally, you set up inside and outside sales/service functions that are aligned with customer health. A place to quarantine the sick customers from the healthy ones. The goal is to align the functions of your team to the job (customers) that best suits them. The feelers on your team should be enabled to use their gifts directed towards the customers that are healthy. Putting your feelers in charge of sick customers will burn them out which is not fair to them, you, or your customers. As my wife always says, “don’t feed the trolls.”
Never ask hunters to nurse or nurses to hunt. Put the right functions on the management of the customers based on their health rating, which I call the Bacon Quality Test. Quarantine the sick from the healthy without them knowing it. Remember, there’s no cure for cancer, only treatments. Don’t let the sick drain your resources, even if they are the market share leader. Find the customers that are healthy and remember, “the healthy are stealthy.”
Ideal MBTI types to manage difficult less healthy customers would be: INTJ, ESTJ, INTP, ISTP, ISTJ. The ones you want to take good care of your healthy customers would be: INFP, ISFJ, INFJ, ISFP, ESFJ.
Bacon Rule #2 (BR2) — Grow sales in current markets
Every company seeks to grow market share in their familiar markets. One of the challenges is you are likely already servicing sick customers and are now pursuing potentially more. This will add unforeseen stresses on your internal resources, especially if the organization is already consuming unnecessary energy due to its own poor health.
Pursuing sick customers to grow share in current markets is often unavoidable. So, if you are going to pursue sick customers, do it with eyes wide open. Know what you are getting yourself into, and, how to make sure you do it right.
“How do you do it right?” you might ask. Let me explain.
Maintain the goal of selling the products you know work for the markets and applications. Don’t get caught chasing the amorphous reasons why the prospect says it doesn’t work. Remember, it is not easy to design products that can overcome frustrated, untrained, and unhappy workers inside of a sick company. Anyone can make a test trial fail.
Don’t get seduced by the size of their procurement budget. Once you do, you may end up in a never-ending cycle of chasing projects their other suppliers refuse. Also, be cautious with requested pet projects as they are almost always missing critical details because of the lack of understanding the opportunity itself. Take an active role in the assessment of the opportunity before requesting your own R&D resources to work on such projects.
Buyers can sense when your eyes are focused on the prize and, before you know it, you are energetically chasing a prize that doesn’t exist. This isn’t necessarily a bad thing. You likely don’t know enough about them yet to ascertain their Bacon Quality. You might, in fact, be the first company to actually show interest in helping them. But you have no real idea if they are pseudo-healthy and just need help, or are never pleased, always complaining, dispassionate, and willing to sacrifice you and any other supplier. Before you get sucked down a rabbit hole of no return, give them the test.
When you chase bad meat no matter how big you think it is will never end in what you believe. Your sales goals and quotas probably aren’t decreasing so why waste your calories? There are a few things I look for as I tour the customer’s facility. Generally, we all know the smell of a soured culture within minutes of walking into the place, if, we allow ourselves to smell it. Unfortunately, we often find ways to ignore and dismiss our gut feelings because we want the business.
The Bacon Quality Test: A few of the questions you should consider as part of your customer/prospect health assessment.
· Are their job postings excessively long, wordy, and filled with relative terms that cannot be objectively measured?
· Do they proudly call themselves a ‘Process-Oriented’ company and a ‘Matrix Organization’?
· Does it seem they focused more on crafting lofty statements than expressing a clear message of identity and focus?
· When observing the office and plant workers, what can you read on their faces, mannerisms, and behaviors?
· How often do you see co-workers whispering while checking around them to see who is watching?
· Does the place have an air of fun and passion or the stench of distrust and unhappiness?
· What is the history of the senior leadership team? It has never been easier to research people than it is today. Research them and look at their work histories.
· Who owns the company (majority shareholders) now and in the last 5–10 years? Whoever it is, research them.
· What are the chances the money that has entered the business is tainted?
· Have the pressures for results turned into a near-term obsession?
· Does the overall organization show the signs of stepping over dollars to pick up pennies?
· Do they appear to genuinely value their customers, or, do the customers appear to be a necessary nuisance to growing sales?
· How much time do they spend in their conference rooms?
· How much time do they spend in the field visiting customers? Particularly, how much time do the senior level decision makers spend in the field understanding what their customers do?
· Do they put the wrong people (functions) in charge of critical tasks, jobs, and projects?
· How many people have left the company after 1–5 years? 5–10 years? 10+ years?
How many in upper management have been with the company for 20+ years? Not always but generally, this is not a good thing.
It is likely that to grow share in your existing market you have no choice but to pursue at least a few sick prospects. At least know what you are facing with your eyes wide open and a cancer wing to internally manage them.
Keep on the lookout for the stealthy disruptors and make it easy for them to see and contact you. These are the ones you want to divert internal resources to support them so you can bridge the BR2 and BR3 goals within your existing markets. Remember, sick incumbents in a given market, if they are your customers or not, are magnets for disruptors.
The challenge, of course, is how do find them? I relate it to bass fishing. For the record, I am by no means a pro angler, but I do happen to know one. Bass fish are phenomenal hunters. They are true badasses and probably where the name bass comes from!
Bass have large eyes that are continuously scanning their surrounding environment looking for what they want. When they see it, they powerfully strike without hesitation. If you miss setting the hook they will rarely, if ever, go after that same lure again.
What they are scanning for on any given day depends on many variables just like a market disruptor lurking in the shadows scanning with their big bass-like eyes. The key to catching them is to make them want to come to you. It requires a rhythm of lures and techniques to do this. They don’t hold up signs advertising their intentions to topple their industry’s Goliath. It is then your job to keep changing the proverbial lures in a way that they strike at you. Then you set the hook and use that relationship to do whatever you can to help/enable their disrupting success. Don’t forget that if you make it hard for strangers to reach you directly, they won’t. (Is it easy to contact you from your website or do you make it hard?)
The ideal functions you want for BR2 would be a good mix of both thinkers and feelers combined with both sensing (interpolators) and intuitive (extrapolators.) The key is to have a breadth of functions to serve BR2.
Note, the more varied the functions/personalities the greater the chance of team dysfunction. Education on functions will help each individual realize their gifts, their “sweet spots” if you will, and, hopefully, subordinate to others when the situation or task requires someone else’s innate capabilities. For example, some functions will be better at assessing the Bacon Quality Test while others might be better suited to be in the boat casting lures into the proverbial market waters. The key is to have the right leadership over BR2 such that the right MBTI types are in the right roles that allow them to maximize their strengths and does not put them into positions of misfit.
Bacon Rule #3 (BR3) — Grow Bacon with New Customers in New Markets
BR3 is by far the most important. Why? Because a company can survive on it alone. BR3 is the one that finds where, how, and with whom it takes to build new farms to raise bacon in new places. This is the lifeblood of the company. BR3 is what can prevent the company from one day peering up at the pretty blue sky as it rhythmically circles the funneling waters over the drain of relevance.
We see and read it all the time. The big names that wildly grow from no-names to household icons and eventually end up rutted in stale practices. They find themselves unable to twist, turn, and rotate to defend, or embrace, new ways of doing things.
This trap of erecting permanence around the functions and heuristics of the business is predictable. Max Weber conceived the Weberian bureaucracy for the right reasons and with the appropriate concerns and warnings (the ‘iron cage’.) As the company grows and expands things become, or, rather, perceived as harder to manage. What actually gives a company the flexibility to adapt is soon perceived as chaos as the size of the company grows.
Soon, visionaries are replaced by their sensing and interpolative counterparts. This marks the beginning of the end for innovation within every company. This is when the intuitive/extrapolative visionary founders that “make sense out of things” are replaced by sensing/interpolative and, by definition, anti-visionaries that “need things to make sense to them.” This is the inevitable transition that drives the organization towards the perceived higher value for executing common work tasks with greater efficiencies (bureaucracy) and away from the upright energy that catalyzed the company’s actual founding.
The company, including the potential new private ‘bacquity’ investors and the newly appointed “posse of directors,” getting back to our farm analogy, should carefully manage the inevitable process of building an efficiency fortress around the self-proclaimed rise of the company. Don’t find yourself spending the majority of your time internally constructing the escalator to omnipotent greatness because it might just lead to a space that no one cares about anymore.
For BR3, you need the right functions with the highest scores in their UP-Factors. These are the individuals that continuously speculate the paths and find the puzzle pieces critical for strategic planning to keep the company relevant long-term. These are the most important people in the company and should have shortest path to those at the helm.
These are the people that keep the external lifelines alive and feeding nutrition to the farm’s livestock much like the founders did in the beginning. Once you lose these special life-supporting forces the company becomes an hourglass with only as much sand in it as what was put there before the true momentum stopped.
It can be argued that you would want all the combinations of brain functions and personality types serving BR3. In my experience, you definitely want the complete mix of “unfiltered intuition” which would come from MBTI types: ENTP, ENFP, INTJ, and INFJ. Unfiltered means that the first function, according to MBTI, is intuition, therefore unfiltered versus when the software of thinking or feeling preceed the hardware.
Just as important as the functions themselves would be the organization’s ability to not only listen but overcome the “interpolator’s dilemma.” This is the inability of company decision-makers to understand what their own internal visionaries are trying to tell them because it “doesn’t make sense to them.” This is, in fact, the basis of the UHD. When those that make sense out of things tell others that need things to make sense to them something of BR3-level importance often results in the proverbial “syntax error.”
When you compound having sensing/interpolators at the top decision-making positions with low UP-Factor scores, you are inviting empathy-lacking, self-serving, and anti-visionary people to run a business that depends on the collective visionary ability to fuel innovation. Remember, innovation is a hindsight term. To be an innovation there must be a market quorum that generally agree it is an innovation. What was it as someone’s idea?
Kelly Williams
klwilliams1972@gmail.com
