Transcript #164 Gaining Business Savvy: Your Iron Triangle

Intro:

Today we finish up a three part series on improving your business savvy, and learning how many business owners can consistently make smart decisions. Today’s episode is about your iron triangle, the three strongest barriers that keep you down and what you can do about it.

Scott:

What is the ultimate challenge for savvy business owners? I think it is dealing with barriers, those seemingly impossible walls that block us. The savvy part is knowing which barriers to accept, which ones to use as an advantage, and which ones can be changed.  I call this dealing with your iron triangle.

Your iron triangle summarizes the 3 biggest walls and maybe nemesis that you face every day and you don’t have easy answers for. On the good days, it motivates you to overcome.  On the bad days, well, they can be pretty discouraging. I’ve fought those battles before.

The main motivation of this episode series, is to present perspectives and tools to make you a better business person. So later in the episode I will give you ideas on how you can succeed even with boundaries of your iron triangle.

Good day, everyone. Thank you so much for listening in today.  My name is Scott Weaver, the Arise2Live business coach.  I am excited about this episode, very excited. This is the conclusion of a three part series and there is a key element to business savvy at the end. I think the topic is very important and very practical, but not enough people talk about it and so, end up being frustrated or even worse.

Please continue to share this podcast. Thank you for getting the Arise2Live message out there to other business owners and by doing so you’re part of a small part of their success in their business.  As a reminder, if it is more convenient for you, I have a YouTube version on the Arise2Live channel. I should add that there are a lot of concepts in this three part series that are captured in my profit loop coaching package.  If you’re currently in a place that goes beyond the information that’s presented, go ahead, please check out the Arise2Live.com coaching page and contact me there. Love to help you.

As said before, this episode is a conclusion of three parts.  The point and the title is to gain business savvy to get insight on how many business owners consistently make smart decisions. These business owners know about their iron triangle, and that is the topic for today. I have in the show notes links to the previous episodes. They’re episodes 162, 163. And this one is 164.

Part 1 covered what the difference between an answer and a solution and why business owners need to provide solutions, not answers, for their company, for their family, and for their success.

Part 2 covered the challenging part of real business life: there are no solutions, only tradeoffs.  Spotting the Trade-offs and not seeking the perfect solution is an important concept to move your company forward and to break the bottlenecks and dilemmas.

When we consider the phrase: there are no solutions, only Trade-offs, we’re actually talking about the process to get the results that people want from us.  People, as in customers and employees and investors, they all want us to be the entrepreneur that solves their problems. However, to get there we have to handle the trade-offs.

Diving deeper, identifying and managing your iron triangle goes beyond trade-offs, way beyond because it’s facing the limitations that each one of us have. Limitations none of us wants to face.

Whenever I start talking about limitations, for some funny reason my mind jumps to this way-back time machine, like before my time, and jump to an iconic line spoken by the actor Clint Eastwood in one of his tough guy Dirty Harry movies. There is a scene where he standing with scrapes on his face after defeating the bad guys and says. “A man’s got to know his limitations.”

Youtube Link: Clint Eastwood, playing tough-guy Dirty Harry (1973) iconic line: “A man’s got to know his limitations”    https://www.youtube.com/watch?v=_VrFV5r8cs0

Okay that was a pretty poor imitation of how he said. “A man’s got to know his limitations.”  Of course, one point in the movie is that he won because he knew his limitations, but the bad guys didn’t.  I’ve even heard people follow up on this saying, ‘If a person knows their limitations, they have none,’ which is an interesting concept.

But this is where the iron triangle comes in. It is a way of identifying and understanding the boundaries and limitations that you are facing.

What is an Iron Triangle?         5:26

So in the extreme, an Iron Triangle is a position or a situation where you have, not barriers to overcome, but walls that stop you cold.  I often ask my clients, “What are the top three walls that are boxing you in?” stifling their style.  The stuff that just seems there’s nothing can be done about them. And the answer is pretty, pretty important. And a lot of breakthroughs go through by just talking about them and bringing them out in the open.

For example, in my personal iron triangle, one of the sides is that I had surgery on my eye for a detached retina. Now, take that off your bucket list. Don’t do it. That’s extra bonus for you today. Don’t get a detached retina. Okay. Where was I? Okay. So one of the personal sides of it is my eye and I do have some permanent side effects. This limits the amount of computer time and reading time I can do in a day. As hard as I’ve tried with new glasses and sleeping right and vitamins, I can’t just change that. It’s a boundary condition in my business.

So it’s very likely that you and your iron triangle also have some pretty hard boundaries that life has given to you. But I also want to say that it takes business savvy to work inside these boundaries and to be successful.

I first discovered this concept of an iron triangle the hard way, though I’m pretty sure I didn’t come up with it or invent it. At that time, I was a CEO of a tech start-up commercializing technology out of a local university.  One side of iron triangle that I faced was that the university controlled the technology licensing that put significant restrictions on what we could do or not do, even to the point of who our customer would be. Another side of the triangle was that the company was funded by grants.  Grants are great.  You don’t have to pay them back but the money was never enough, and that let to the third side.

How do you create a new product before first revenue?

That was a pretty tight, pretty strong iron triangle that I faced. But it was also a time of adventure for me. I Learned a lot about business acumen in the fires. Just answering the question of “How do you keep the company going inside that iron triangle that I was in?” Well, I will say that it took a lot of hard work and a lot of creativity.

Over time, I have learned that beside my own personal iron triangle that I have to deal with, there are two more iron triangles that everyone faces.  First one is faster, cheaper, better and the second one is what I call the three T’s: time, talent, treasure.

In part two of the series, we talked about the trade-offs of the Faster, Cheaper, Better.  This episode we go deeper and we talk about it as an iron triangle.  What I’m thinking about is that in your company, there are hard boundaries at any given moment. The machinery in your company can only go so fast. It can only produce so many widgets per day. Your employees out in the field can only produce so much work each day and on top of that, these employees want to be paid a decent wage, so there’s limits on how cheap you can make stuff.  And of course there’s always quality pressures from the customers to make things better.  These form an iron triangle that business owners must deal with.

The second iron triangle that all business owners face is Time, Talent, and Treasure.

Everyone in this world is limited by time.  This is a hard, merciless boundary on the iron triangle. There’s only 24 hours in the day, 168 hours in a week.  Every one of us has been gifted the same amount of time.  Everyone faces the same challenge of making the most of the time that’s been given to us. We have not figured out how to get around this barrier.

In a similar way, we’re limited and in our abilities and personal talent.  For example, I’m pretty good at analytics and analyzing numbers and mathematics. I’m not as good with words and English grammar.  Of course, I wish I was equally talented between the numbers side and the word side. I mean, that would make my podcast broadcast production much easier.  Each one of us has some hard boundaries on our individual talents, and that is why business owners work with other people. That is how you move the hard boundary of your personal talent to expand it out so that the company has talent beyond your own personal ability. And this gets into the whole discussion of why it’s important for business owners to work well with other people.

The last T is treasure.  We all have limitations on how much money we have in the bank and in cash flow.  While this is not as hard as the time boundary, but it can be changed and that is important to know.

The point here is not only do we have personal iron triangles to deal with, we have two bonus iron triangles to mess up our business: faster, cheaper, better triangle and the three T’s of time, talents, and treasure.

What is Your Iron Triangle?           11:05

What are those top three worthy walls and barriers that keep you from flying?  Keep you from going where you want to go? So please seriously think about that. Seriously, it’s perfectly fine to pause this episode and write down your thoughts on this.

For me, I’ve already given you one. The health and condition of my eye that limits how much focus time in front of a computer or writing. Every podcast I’ve done on the Arise2Live podcast has hit this boundary.

The second edge of my iron triangle is more normal, maybe. My company is growing, expanding, and I’m doing this in the Nashville, TN area that I’ve only lived here actually less than 2 years. I’ve spent way too much time figuring out the state, city, and county taxes; and finding local banks that actually care about their customers; developing new connections. I mean, there’s this boatload of questions. Which business groups are the most active? Where’s my local clients hanging out? There’s a hand full of Chamber of Commerce in this area, which one should I attend? All of these take time and filled up with dead ends but it’s kind of expected when you are getting set up in a new place.

The third iron triangle that I’m facing, I’ll be honest, took me by surprise. It’s the season of life I’m in right now. My kids are being launched to be on their own in a crazy post-COVID environment and throw inflation on top of that. It’s pretty complicated and messy out there. At the same time, I am beginning to deal with elderly parents, both for my wife and myself. Between the kids and the parents, that’s a very tough double.

Okay, if I only had to deal with one of these sides of my triangle at one time, I would be okay. I think I could handle that pretty good. But handling all three, all at once as they’re working against me, preventing me from reaching my goals, and I feel that’s just unfair.

Okay, in the real world, too many of us business owners deal with life’s unfairness. It comes with the territory and we need to have the maturity to, I don’t know, deal with it the best we can. Not saying completely accept it, but bring in a little common sense into dealing with the real world.

So how can we go about this?  How can we do it?

I will start with a little perspective, and dare I say, ‘acceptance of reality’.

Benefits of knowing your Iron Triangle:     13:44

1) The biggest boundaries and problems that you face are identified, are cleary identified. There’s that huge wallet in your face. You can’t miss it.

2) Allows focus of our creativity and the resources to break down those walls, to break down those barriers.

3) Prevents the frustration and stress of not achieving your goal because you know what’s in the way. You know where your goal is. You know it’s in the way you can actually think through things and do something about it.

4) Allows you to set reasonable goals.

Drawbacks of not knowing your Iron Triangle:               14:33

• It stops you from moving forward. There’s this frustration about hitting some invisible wall over and over. As that frustration builds up, it’s real easy to fall into the blame trap. I’ve done that before. A lot of people have, but you got to keep out of it. And if you know where your iron triangle is, it is much easier not to end up in that place.
• This leads to one of the most nastiest trap about your Iron Triangle: lowering your performance and expectations to a false reality, to a false status quo.

Dangers of Your Iron Triangle         15:19

Many of us have heard about the science experiment about the shark in a big tank of water with lots of yummy fish to eat.  The scientists put a glass wall between the shark and the fish.  At the beginning, the shark just kept hitting his nose against the glass trying to get through, couldn’t figure this out. I mean, he sees these tasty fish but couldn’t get there.  But over time, the shark tried to eat the fish less and less.  Then the scientist pulled out the glass wall and the shark didn’t even try to eat the yummy fish even if they swam right in front of them.

So the biggest danger of your iron triangle is that you can become the shark that never goes beyond where the glass wall once was, accepting the faulty barrier that a lot of times will disappear over time.

This concept is a key thing about business acumen, about business savvy. Your iron triangle, your barriers that you are facing and your company, they change over time.  So don’t become the shark and assume that they don’t change.

It takes experience and a lot of thought to know which of the barriers that we have to accept, which side of the iron triangle that we can change.  I find it a little hard to describe all that goes into this business acumen, but perhaps it’s best summarized by an old poem by a guy named Reinhold Niebuhr, something like that. It’s commonly called the Serenity Prayer and it goes like this:

God grant me the serenity
to accept the things I cannot change; 
courage to change the things I can; 
and wisdom to know the difference.

https://www.beliefnet.com/prayers/protestant/addiction/serenity-prayer.aspx

Dealing with the iron triangle. We need a lot of wisdom. But once we figure things out, a lot of good things can happen. So as an exercise I would like you to think about your iron triangle, considering what you are facing for each side. What do you need to accept? Do you need the courage to change them?

For me, doctors tell me that there’s not a whole lot that I can do for my eye.  However, being the new kid on the business block in Nashville, well, that is a barrier that can be changed.

Again it’s OK to pause this podcast to write down your thoughts about your iron triangle and which of the three that you need to accept and which that you can change.

So how can we go about changing our iron triangle?

Well, here is four things that you can do to approach it. First, recognize that your iron triangle is an answer, not a solution.  This is right out of the concepts from part one of this series.

Second, recognize that changing an iron triangle side will involve trade-offs. This is part two of the series and the obvious one is, I think it’s nearly impossible to change all three sides of the iron triangle at once, but one side at a time, doable.  Usually doable to change one side.

A starting could be applying a version of the Theory of Constraints. In doing so, you can break down the issues, identify what they are, identify the bottlenecks, and make decisions about what you can do about the tradeoffs.  It’s not going to be easy, but this approach can be a starting point to expand your world.

Third, don’t assume your iron triangle is fixed for all time. Don’t be the shark in the tank watching the yummy fish swim by. As for my iron triangle from my CEO commercialization days, all the sides were moved.  Gone.  Didn’t happen by magic, but the barriers were not permanent. Of course, I have to say, “A new iron triangle was discovered after that one,” but the area inside the triangle was much bigger to move around. We had more flexibility to get through the barriers of the new iron triangle.

Fourth, now please listen very carefully here because I think you’ll be surprised, when trying to change your iron triangle and you have picked what side you want to change, that barrier you want to move, work on changing these three things:

Change the time factor – change the process time, the supply chain time, time on the shop floor, equipment time, payment time, or something else that deals with time that would help the situation.

Change the talent resource – Train employees, hire a consultant or coach, hire new talent into a new position, join a mastermind group, or even bring your kids into your company. Get that person you need to move the side of the Iron Triangle.

Change the access to Treasure – find new financing or a loan, increase your sales effort, discontinue a product line and place that money into a new product, sell your fancy car, take on a part-time job, bring in a new partner. Be creative on getting access to new treasure.

Now, I can almost hear you now. “Wait Scott, aren’t the time factor, the talent resources, and access to treasure the same iron triangle you just talked about?”

Yes it is. You have just learned one of this biggest secrets in business acumen: another iron triangle can break apart your own personal iron triangle.  That’s right, the elements of one iron triangle can move the walls that you face.

Now, using one iron triangle to change your personal iron triangle, now, that is business savvy.  That’s how you arise2Live