Picture achieving business success as being like harnessing the tension between the legs of a three-legged stool. Each leg (Commercial Responsibility, Customer Value, and Culture – the 3Cs) is dependent on the other two for stability. These 3Cs must be in synergy to support sustainable high performance.

The 3Cs – Commercial Responsibility, Customer Value, and Culture – aren’t just buzzwords. They’re the fundamental pillars that either make or break a company’s long-term success.

As Christopher Luxon, former CEO of Air New Zealand, aptly stated:

“As a business leader, you have a responsibility to lead a company for the future…My job is to make sure that commercials are strong, the customer experience is great, the culture of the organisation is constantly improving.”

But here’s the interesting part: these three elements don’t just sit there independently. They create a dynamic tension that, when correctly harnessed, can drive unparalleled growth and high performance.

This is not the first time these 3Cs have been referenced regarding organisational performance. Eliyahu Goldratt, founder of the Theory of Constraints, also highlighted the importance of the 3Cs in his book It’s Not Luck:

“Let me review what we have agreed on. We agreed that we should, ‘Make money now as well as in the future,’ ‘Provide a secure and satisfying environment for employees now as well as in the future,’ and ‘Provide satisfaction to the market now as well as in the future.’

The first one represents the traditional view of people who own companies.

The second is the traditional view of the unions, the employees’ representatives.

And the third expresses the message that all new management methods are zealously advocating.

We, as top managers, must make sure that our companies provide all of them.”

Understanding The 3Cs

The Stool Metaphor

Let’s break this down further:

Commercial Responsibility (Leg 1):

This leg supports the organisation’s financial health and long-term viability. It relies on the other two legs. Providing value to customers drives revenue. A constructive culture enables efficient and effective operations.

Customer Value (Leg 2):

This leg represents the organisation’s ability to meet the needs and expectations of its customers. It depends on Commercial Responsibility. The organisation needs resources to create value. It also depends on Culture. A customer-focused culture is necessary to understand and meet customer needs.

Culture (Leg 3):

This leg symbolizes the shared values, beliefs, and behaviors within the organization. A constructive culture relies on Commercial Responsibility. This provides a sense of security to employees. It also relies on Customer Value, which creates a sense of purpose and satisfaction among employees.

The Seat (Sustainable High Performance):

This is the result of all three legs working together in synergy. When Commercial Responsibility, Customer Value, and Culture are all strong, the organisation can achieve sustainable high performance. If any leg is weak, the stool becomes unstable, and high performance is harder to sustain.

This metaphor illustrates the interdependence of the 3Cs. It highlights the importance of focusing on all three to achieve sustainable high performance.

Just as a three-legged stool works because of the tension between the three legs, sustainable high performance can be achieved by harnessing that tension.

Adding wires between the legs of a stool can make it stronger. In the context of The 3Cs Model, these wires can be seen as the synergies between the three elements. When these synergies are effectively harnessed, they can strengthen the organisation and drive growth and high performance.

For instance, when Commercial Responsibility and Culture work together in synergy, they can create a collaborative environment. This environment fosters innovation. It also improves financial performance. When Culture and Customer Value are in synergy, they can create a customer-centric culture that enhances customer satisfaction and loyalty. And, when Customer Value and Commercial Responsibility are in synergy, they can lead to the creation of high-quality products or services. These products meet customer needs and are profitable for the organisation.

The key to achieving sustainable high performance lies not in balancing the 3Cs in isolation. It is about finding and harnessing the synergies between them. This is where the HPtE Strategy® comes into play. It provides a roadmap for organisations to navigate and harness the synergies for mutual benefit. More on that later.

The Three-sided Pryamid Methaphor

A three sided pyramid is another excellent metaphor for the 3Cs Model and its relationship to sustainable high performance.

In this metaphor:

The Base (3Cs: Commercial Responsibility, Customer Value, and Culture):

The three corners of the pyramid’s base represent the 3Cs. Each corner is necessary for the structure’s stability. This symbolizes how each component of the 3Cs Model is interdependent. Each part is crucial for the organisation’s success.

The Peak (Sustainable High Performance):

The peak of the pyramid shows sustainable high performance. This is the ultimate goal of The 3Cs Model and HPtE Strategy®. The peak cannot exist without the base. Similarly, an organisation cannot achieve sustainable high performance without a strong foundation in Commercial Responsibility, Customer Value, and Culture.

This metaphor emphasizes the strength and stability that comes from having a synergistic and integrated approach to the 3Cs. A pyramid can withstand the test of time. Similarly, an organisation that effectively integrates the 3Cs can achieve long-term success. It can also achieve sustainable high performance.

The pyramid metaphor also implies a sense of upward progression or aspiration. This can symbolize the organization’s journey towards ever-higher levels of performance.

The 3Cs Model

The 3Cs Model begins as a simple venn diagram containing the 3Cs.

Commercial Responsibility (Top Circle):

This circle represents the organisation’s financial health and long-term viability. The area where this circle intersects with the other two shows the synergy between commercial responsibility and customer value. It also highlights the synergy between commercial responsibility and culture.

Customer Value (Left Circle):

This circle represents the organisation’s ability to meet the needs and expectations of its customers. The area where this circle intersects with the other two shows the synergy between customer value and commercial responsibility. It also shows the synergy between customer value and culture.

Culture (Right Circle):

This circle symbolizes the shared values, beliefs, and behaviours within the organisation. The area where this circle intersects with the other two represents the synergy between culture and commercial responsibility. It also represents the synergy between culture and customer value.

The area where all three circles intersect represents the optimal state. In this state, Commercial Responsibility, Customer Value, and Culture are all in synergy. This is the point of sustainable high performance.

This Venn diagram visualization emphasizes the interdependence of the 3Cs. It highlights the importance of finding synergy among them. This synergy is crucial to achieve sustainable high performance. It can also visually show how focusing on only one or two of the components can lead to suboptimal results. Neglecting the others contributes to this issue.

Now we can add the key levers for each element.

Commercial Responsibility

Commercial responsibility in a business context traditionally involves managing three key financial levers: Margin, Operational Expense, and Investment.

Margin:

This refers to the difference between the sales revenue and the cost of goods sold (COGS). It’s a measure of the profitability of a company’s products or services. Increasing the margin can be achieved by raising prices, reducing the cost of goods sold, or a combination of both. However, it’s important to consider the potential impact on customer value when making changes to prices or costs.

Operational Expense:

These are the costs associated with the day-to-day operations of a business, such as salaries, rent, utilities, and maintenance. Reducing operational expenses can improve a company’s profitability. However, it’s important to do so carefully. The reduction should not negatively impact the quality of products or services. It also shouldn’t harm the company’s culture.

Investment:

This refers to the allocation of resources to long-term assets or projects that are expected to generate future returns. This includes investments in new product development, marketing campaigns, equipment, or employee training. Making wise investments can drive future growth and profitability, but it requires careful planning and risk management.

Managing these three levers effectively is a key aspect of commercial responsibility. It requires a deep understanding of the company’s financial performance. Moreover, it necessitates the ability to make strategic decisions. These decisions must balance short-term profitability with long-term growth and sustainability. Customer value culture should also be an important consideration.

Customer Value

The three levers of Customer Value are Quality, Price, and Speed.

Quality:

This refers to the standard or grade of a product or service. It’s about meeting or exceeding customer expectations and delivering a product or service that performs as advertised. High-quality products or services can increase customer satisfaction, build brand loyalty, and drive repeat business.

Price:

This is the amount of money that a customer must pay to buy a product or service. Price is a major factor in a customer’s purchasing decision. It’s important to price products or services competitively, but also at a level that allows the company to sustain profitability.

Speed:

This refers to the rate at which a product or service is delivered to the customer. In today’s fast-paced world, customers often value quick service and fast delivery times. Speed can be a key differentiator in industries where customers need immediate or rapid service.

Balancing these three levers is crucial to providing high customer value. For example, a company might be able to offer low prices and fast service. However, if the quality of its products or services is poor, it may not provide high customer value. Conversely, a company might offer high-quality products or services. Nevertheless, if its prices are too high, it may not provide high customer value. Slow delivery times can also reduce customer value.

In the context of The 3Cs Model, managing these levers effectively can contribute to Commercial Responsibility. It does so by driving revenue and profitability. Culture is also an important consideration in the context.

Culture

There are three levers of Culture — People Satisfaction, People Security, and Stakeholder Interests.

People Satisfaction:

This refers to the level of contentment among employees in the organisation. It’s influenced by factors like the work environment, job roles, compensation, recognition, and opportunities for growth and development. High levels of employee satisfaction can lead to increased productivity, lower turnover, and a more positive workplace culture.

People Security:

This refers to the sense of job security among employees. It’s influenced by the organisations financial health, market stability, and management practices. When employees feel secure in their jobs, they are more likely to be engaged. They also tend to be committed. They will contribute their best efforts.

Stakeholder Interests:

This refers to the needs and concerns of everyone with a stake in the organisation. These could be individuals or groups involved in its projects. Stakeholders include employees, customers, shareholders, and suppliers. Community members can also be stakeholders. Others impacted by or impacting the organisation’s actions can be included as well. It is crucial to consider and address stakeholder interests. This helps maintain positive relationships. It also ensures the organisation’s actions are socially responsible and sustainable.

In the context of the 3Cs Model, managing these levers effectively can contribute to Commercial Responsibility. This is achieved by fostering a motivated and productive workforce. It also enhances Customer Value by ensuring the organization’s actions align with customer and societal needs. Awareness of these levers is key to creating a constructive culture that supports sustainable high performance.

Summary of The Levers

The 3Cs Model includes Commercial Responsibility, Customer Value, and Culture. Each has three levers. This makes a total of nine levers that can be adjusted to achieve sustainable high performance. Here’s a recap:

Commercial Responsibility:

• Margin
• Operational Expense
• Investment

Customer Value:

• Quality
• Price
• Speed

Culture:

• People Satisfaction
• People Security
• Stakeholder Interests

An organisation can create synergy among the 3Cs by understanding and effectively managing these nine levers. This management can achieve sustainable high performance. Managed poorly they can also cause conflict, silos and waste. It’s important to note that these levers are interconnected, and changes to one can impact the others. Therefore, a strategic approach is necessary to optimise all nine levers.

That is the job of the HPtE Strategy®.

To support finding synergy between the 3Cs, the High Performance through Engagement (HPtE Strategy® or HPtE) offers a framework. It creates a pathway for organisations to achieve sustainable high performance.

The HPtE Strategy® offers a roadmap to navigate obstacles and find synergy. It’s a strategic guide and communication tool that supports clients implementing their High-Performance Engagement initiative. It aids in understanding the intricate interplay between the 3C’s. It illustrates both the current reality where conflict and tension might exist. It also shows the future scenario where this synthesis can be harnessed for mutual benefit.

The HPtE Strategy® emphasises the importance of stakeholder engagement, constructive culture, and continuous improvement of value. It provides tools and methodologies for identifying the underlying interests of all stakeholders. It addresses these interests while fostering a constructive culture. The strategy also continuously improves processes and financial outcomes.

If you would like to learn more about The 3Cs Model and HPtE Strategy®, contact me and book an Introductory session. You can connect with me on LinkedIn.