Imagine Business Strategy as a Parent Instead of an Investor

Ed Marsh | May 11, 2018

Would you ever make a business decision with a 20-30% return...just on faith?

Introduction to SignalsFromTheOP

Guide to episode

  1. We become parents knowing we'll invest approx $1MM...with no clear return or time frame - just faith
  2. Business decisions often default to the status quo because we can't prove return (before executing)
  3. What would business strategy look like if we took the same approach to nurturing growth that we do to being parents?
  4. Personal note - my youngest graduates today. Like his two brothers, he's attended a top school, done very well academically, and is being commissioned as an officer in the military. So it's not only a poignant topic for me, but timely as I compare how I've made business decisions vs. parenting ones!

Transcript follows

Hi, I'm Ed Marsh. Welcome to this episode of Signals from the OP. On Signals, I talk about issues that I believe should be of strategic importance to industrial manufacturers that are worried about revenue growth in a very disruptive world. When we talk about strategy, there's a lot of discussion about short-termism. Among board experts and strategy wonks, this is question always comes up, and usually, when you boil it down, what we really have is kind of a debate about shades of gray.

Is strategy looking one year out? Is it looking 10 years out? That's really the questions that people ask. I want to propose a different way to look at it, and let's start, I would say by differentiating between planning or forecasting and strategy because they're different. I've talked about that before, and I'll leave a link in the transcript of this video.

I also want to use an analogy that's going to be, I don't know, a little bit strange but, I think, familiar to many people. That's parenting. If you think about it, the Department of Agriculture estimates that the cost of raising a child, excluding college, for a child born in 2017, is about $250,000. That's some coin. Many families decide to have two or three, so half a million to a million bucks, add in some college funds, and that's a serious commitment.

Well, we make that investment. We make that commitment without any expectation of financial return. We know it's going to cost us a ton. Now, we've got complete faith that we're going to figure out how to manage it and that we're going to create value for ourselves and emotional enrichment for our families. We're going create a contributing member of society that's going to help the community. We do that on faith.

Now, contrast that with how to make B2B decisions. How many times have you talked to somebody about investing a bit, trying something, something that's well-researched and justifiable, and the answer you get is, "Well, how do we know that's it's going to work? Prove it to me." I'm not talking about some kind of a lark, like Fred Smith's trip to Vegas to come up with the FedEx payroll one time early in the company's history, that story that kind of defines a business.

I'm talking about something that we know is going to work. And yet, the question is, "Oh, well, how do we know? Prove it to me." Well we haven't done it yet, right? Of course, so you can't prove it. It's a crazy premise.

I would argue that whether it's conscious or not, that's often actually exactly the point that that's the way that somebody who masquerades as an open-minded manager, that's willing to entertain ideas and looking for interesting out-of-the-box thinking can actually, very easily, cast themselves as prudent and assiduously maintain the status quo.

What a horrible situation for a business. So what if we took just a little bit of the faith and optimism that's reflected in our decision to have children and become parents and to apply that to business. Will we have embarrassing moments in business as we do as parents? Sure.

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You know, we're going to get a massive cell phone bill because somebody texted all night long for a month before we figured it out. We're going to get called about an arrest sometime or mortified by some social media post. Yeah, it's probably going to happen, in business, if we take some risks and make some investment, just as it does as parents.

But those possibilities, they don't stop us from being parents. They don't stop us from taking that leap of faith and making that commitment, understanding that even if there's no financial return, it's still the right thing to do.

So when you look at your kids, and you imagine their potential for the future and the way that they're going to potentially be able to change the world, think for a moment about what would happen if you imbued some of that optimism into your evaluation of business decisions. What if we began to manage like we parent?

Obviously, there's some considerations. There's some complications. You're responsible to investors. People have different kinds of expectations. I get all that. This is not something that you can just immediately drop in and implement, but I think it gives us a framework for thinking about things in a way that puts it in a context that it's going to feel very natural and really important.

So if you like looking at things from kind of a different angle like this, if you're interested in strategy for revenue growth and an industrial manufacturer, I'd welcome you to subscribe to these periodic video blog posts once a week or so. You can subscribe at Again, that's

I'm Ed Marsh. Thanks for joining me, and maybe we'll talk some day about managing as though we parent. It's particularly poignant for me. I'll add just a personal note at the end here.

My youngest is graduating from Vanderbilt University this coming week, and having had three now go through that process, the whole concept of parenting and watching them flourish and grow is a particularly meaningful kind of an idea, and, I think, has me thinking about the application to business where so many companies have so much potential and just don't quite seem to capture it. Thanks for joining me. I'm Ed Marsh.

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