In the new era of entrepreneurship, is the barrel theory obsolete?

Sajjad Hussain
Nov 2 · 3 min read

When doing business and strategy, we often refer to a very famous theory in management-the barrel theory.

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01. What is the barrel theory?

The barrel theory says “how much water a barrel can hold depends on the shortest piece of wood.” This theory was put forward by American management scientist Peter, and it is also known as the “short-board effect.”

Using a wooden barrel to compare a company is like saying that in any company, it is impossible for every part to be perfect. There are always good and bad parts, and the inferior part sometimes determines the level of the company. Entrepreneurs who understand this theory will pay special attention to the obvious flaws in the entrepreneurial process. They will not be blinded by the blood, and can only see the profitability of the project, but not the shortcomings.

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However, in our current era of rapid global Internet development, information is changing rapidly. To keep up with the rhythm of the times, just talking about “shortcomings” is out of date. We should not only focus on our weaknesses, but also make good use of our strengths.This has also derived another theory-the anti-barrel theory.

02. What is the anti-cask theory?

We can imagine how to tilt the barrel toward the longest wooden board. Can the longest wooden board also block the water? This theory says that the longest wooden board of a wooden barrel can determine the advantages of a wooden barrel. We make our own conditions, give full play to our advantages, maximize our strengths and avoid weaknesses, and the water capacity can also increase.

The anti-barrel theory advocates making the best use of the advantages and maximizing the characteristics, so that people can break the fixed thinking, find their own special advantages, and break the predicament in one fell swoop to create a new situation.

It takes a lot of energy and time to make up for the shortcomings, and it may only improve a little in the end, but to take advantage of the advantages only need to change ideas and adjust the layout, it is easy to quickly open the situation.

Just like a lion carrying a flock of sheep, it is easier to break out of the enclosure than trying to train the flock to become a lion.

For example, China’s e-commerce giant Alibaba, which gives full play to its strong e-commerce advantages, with the support of the e-commerce long-term board, payment, finance, offline retail and other shortcomings, it can slowly fill up.

03. In a volatile market, the development of core advantages can break through

In the current rapid technological development and rapidly changing market environment, the most important thing for SMEs to break through is to develop their own core advantages.

The highlighting of characteristics requires companies to have outstanding advantages, and then strive for perfection, continuously reinforce the longest wooden board, highlight market differentiation, self-renew and iterate, and jump out of the narrow competition circle. Once the advantages are gained, we need to make up for the shortcomings.

Of course, the barrel theory and the anti-cask theory are not in contradiction. To be a business is not just as simple as a wooden barrel. We also need to solve the problem from the practical perspective. Otherwise, all woodworkers can become excellent entrepreneurs.

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