Have you ever built an IKEA furniture? Have you ever skipped one step in a moment of distraction and had to go back, pull the screws out and start again? I certainly have.
Assembling IKEA furniture is a good metaphor for life – and work – and business. When inexperienced, you have limited understanding of how it works. You follow the instructions, start with Step 1 and continue until you’re done. Building your first chair may take you 1h30, but by the time you’ve assembled six of them you can do it in 45min. As you gain experience, you become better and faster at it.
The difference between building IKEA furniture and life – and work – and business, however, is that you don’t have instructions. Hence the need to start with what you know – with what’s under your control.
In The Happiness Advantage, positive psychologist Shawn Achor describes his life principles to be successful and performant at work. For Principle five, Achor refers to a famous scene in The Mask of Zorro, where Anthony Hopkins trains Antonio Banderas to become Zorro. The training circle is composed of three circles. Banderas starts from the outer circle and as his sword skills improve, he’s allowed to move to the inner circle, bringing him closer to his adversary and thus taking more risks.
Achor summarises his “Zorro Circle” principle as follows:
When challenges loom and we get overwhelmed, our rational brains can get hijacked by emotions. This principle teaches us how to regain control by focusing first on small, manageable goals, and then gradually expanding our circle to achieve bigger and bigger ones.
I was reading the book when consulting a loss-making manufacturing company, which was being spun-off. This principle could not have been more relevant.
According to our forecast, the company would run out of cash in a month under the worst case. In the best case, the buffer would be so low that it was insufficient to pay for salaries the next month. So how to remediate to such a gloomy prospect? The answer was: focus on what’s under your control. In my client’s case, this was inventory.
When turning around a company, time is limited and action is key. The alternatives facing my client to avoid bankruptcy were:
- Changing the structure of the deal
- Increasing revenues
- Selling inventory
Changing the structure of the deal was not possible. It was very late in the process and it could have blown out the spin-off. Increasing revenues is easier said than done. Despite all sales and marketing efforts, clients are still the end decision-makers and have their own liquidity situation to manage. Selling inventory was the only option left. Not only did the company owned the inventory, but it could control how much of it to sell by setting the price.
Indeed, unlike selling products to customers, re-selling material to suppliers or competitors was a one-time action. Therefore it could sell at a discount to cash in quicker without damaging the long-term positioning of the firm. And so it did. And so it worked.
There are no IKEA instructions on how to do business nor on how to live your life. What this case teaches us – and what Achor’s Zorro principle is all about – however, is that by focusing on what’s under your control, you can act to change your circumstances.