The Four Circles is a key concept in The Icehouse Owner Manager Programme. It recognises how businesses are more likely to achieve success once they identify, address and “improve” on certain interconnected core elements. What’s more, when the circles are in balance, in harmonious orbit, running a business tends to be more stimulating, life-enhancing and rewarding – often in ways that go beyond financial profit.
The first three circles:
You – The owner-manager has a life that is healthy, punctuated with happy and fulfilling relationships with family and friends.
You In The Business – How owner managers manage and lead the business
The Business – It’s purpose, values strategy, business model, assets, etc.
“Management thinking is often presented in a linear fashion, i.e., follow Step 1, Step 2, Step 3 to achieve a goal. And, normally, the business/organisation is at the center of the universe. From the beginning, the Owner-Manager Programmes of The Icehouse have recognised, honoured, and addressed three core circles that impact performance in small firms,” explains Darl Kolb, who has directed and facilitated Icehouse growth programmes since 2007. (Gearing Up: Leading your Kiwi business into the future (Kolb, Irving, Shepherd and Woods; Auckland University Press, 2020).
“First, the owner-manager as a person matters as much as the business, because without a healthy and functioning entrepreneurial leader (‘you'), the business will not go far. The other two circles – ’the business’ and ‘you in the business’ – recognise the importance of understanding how to build capacity beyond one’s individual strength and weaknesses. “
A fourth circle has entered the equation more recently. “… we became keenly aware that owner-managed businesses were not islands unto themselves and that the worlds of social and technical change, as well as environmental challenges are increasingly and very significantly impacting businesses of any size.
“Moreover, many of our owner-managers have discovered ways to give back to their communities and the world-at-large in meaningful ways. So the fourth circle represents the broader community and global context within which small firms are situated. Sometimes owner-managers are blown back by the winds of change, and sometimes they step up, seize opportunities and lead changes that make the world around them a better place,” says Darl.
How does this fourth circle manifest and what next steps can owner managers take? “Community”, can mean many things. Local business play an important role in their communities; the business that sponsors the local soccer team, organises a beach cleaning event or hosts a street party.
More and more business owners tell us they are looking outwards, discovering the rewards of helping communities, focusing efforts on local challenges, environmental and climate change issues, and creating a business response as a consequence – based on awareness, involvement and investment.
Consider how employee share schemes, monthly bonuses and workplace benefits such as subsidised healthcare, flexible working options and gym membership, create happier, healthier and more productive and loyal employees. And how the knock-on effect passes through to their families, friendships and communities.
Going slightly further out, internships, funding for training and career development, paying it forward, are all tried and trusted winners because they help create inter-generational development and opportunity for a wider community.
In our experience, many alumni tells us that extending into the community has built new and exciting partnerships (often in areas they hadn’t previously considered beneficial), boosted collaboration and growth and kept them accountable.
Of course, people buy into products and services not just because they like the look or feel of them, they like the look and feel of the organisation, too – one which shares and reflects their own values, purpose and goals.
‘If a company can transition from simply delivering a product to building a community, it can unlock extraordinary competitive advantages and both create and support a superior business model,’ says Harvard Business Review.
The Four Circles can help owner managers get clarity and confidence around critical next steps, establish where they want the business to be in one, two and three years’ time, and ultimately, help get them closer to the success they deserve.
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