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It is effectively a principle of productivity, of prioritization, and business success.

So what’s the “Precious Pearl Principle”?

In Matthew 13:45-46 of the Christian Bible, Jesus tells a parable about a “pearl of great price” for which a merchant sold all that he had.

It was a parable meant to teach “priority management” in a spiritual context. The precious pearl principle is a productivity framework based on the metaphor of the “pearl of great price”.

In modern life and business, I often find that the greatest strategic challenge faced by entrepreneurs and CEOs is priority management. Priority management, in my definition, refers to that component of planning that determines the single most important element of a complex system, or the single most important destination for the investment and allocation of resources.

Such resources include but are not limited to:

1. Your Time
2. Your Financial resources (personal or business)
3. Your Attention (business or personal)
4. Your Effort (corporate or personal strategic priorities)
5. Your Staff (Using staff for highest leverage activities)

A billion dollar cottage industry has developed around time management and planning that would probably be more effective for people if they understood that the actual issue is “decision priority management”.

Asking these 3 questions can help you become a better, more systematic, priority-focused manager:

1. What’s the most important decision you need to make today?
2. What’s the most important action you need to take today?
3. What’s the highest yield, highest leverage function you have as an entrepreneur, manager, or CEO?

It is this underlying “priority logic” that makes goal-setting so important to the success of individuals and companies. To paraphrase Dr. Eli Goldratt, goals give a business a “decision procedure”. A way to decide whether to worry less about X than about Y.

For instance, as a business growth consultant, I emphasize marketing mastery as the highest return growth lever for any businesses I work with. I find that many small businesses delegate away far too many marketing decisions and skill sets. Creating a marketing system that you can optimize with each passing day is absolutely necessary to building true asset wealth in your small business.

The most common aptitude possessed by successful entrepreneurs and CEOs is consistently knowing how to set the right priorities and make the right resource allocation decisions. This simple skill is why the CEO gets paid the big bucks while a hard-working but misguided front line worker gets to sit and gripe about how much the CEO gets paid.

If you’re a fan of the movie “The Lord of The Rings”, you can identify the movie’s parable of the “One ring” as an updating of the precious pearl parable (not surprising since author J.R.R. Tolkien was a Christian interested in ancient narratives and metaphor). In “The Lord Of The Rings”, the One Ring was the goal worth tossing everything else aside for, because it was the “one ring to rule them all”. It was the one thing that if you could get it, you could get all the other things you needed and wanted.

By itself, the “One Ring” provided a decision procedure for daily action for all parties associated with it. If you’ve never watched “The Lord Of The Rings”, here’s a short scene that really explains the idea.

This Precious Pearl (Or “One Ring”) Principle is the most important idea in business, and finds expression in:

• Goal-setting
• Market Research
• Target Marketing and Selection
• Business Planning
• Business and Sales Forecasting
• Project Management
• Budgeting
• Exit and Succession Planning
• Work-life balance
• And much, much, more

Take goal-setting for example. If you’ve struggled with a “goal-setting” resolution you made after attending a weekend business seminar, it’s because you’ve never seen the connection between “goal-setting” and this principle.

Goal-setting setting is about choosing a precious pearl in the midst of a bewildering array of current and future choices. Going through the goal-setting process gives you the “faith” to stick with the destination decision you’ve made, and allows you to avoid wasting time, effort and resources on options that do not contribute significantly toward the goal.

If you examine current trends, you’ll discover that the years to come will only provide more bewildering options, not less; more choices, not less. While “more choice” is almost always taken to be synonymous with “better” in the western world, authors like Barry Schwartz (in “The Paradox of Choice”) and Jack Trout (in “Differentiate or Die”) have identified some of the pains associated with too much choice and not enough constraint in business and personal decision-making.

Applying the Precious Pearl Principle in a strategic marketing context for example, will force you to decide on your Golden Customer (your most wanted client), and that decision will cascade positively down and throughout your marketing system. How?

You’ll find it easier to know what they want, the most important message/promise they want to hear from you, and the most important operational shape your business should take to fulfill those promises.

Do you see how answering one question can help you answer one hundred (100) subsequent questions correctly? Do you see how it can help you do this faster and easier?

Today I signed up with Technorati. Technorati may be the single most influential website and directory service for bloggers. Of course I’ve been sharing my posts with my Twitter “followers” as well as my Facebook “Friends”.

In 1941, Joseph M. Juran, a management consultant discovered Pareto’s work and expanded it into a framework for use in quality control.

The 80-20 principle (also known as the Pareto Principle, 80-20 rule or the law of the vital few) was further popularized by author Richard Koch with the publication of his 1997 book “The 80/20 Principle”.

Since that time, small business owners have been subjected to various “experts” and “gurus” citing it as some sort of cure all for management headaches.

Many of these gurus have essentially taken what amounts to a useful observation and have made it a holy grail of management thinking.

In reality, there is another principle that I think has far wider application than even the 80-20 principle.

I call this principle The Precious Pearl Principle or The Rule of 1.

Let me illustrate this principle by presenting the following scenario:

Assume you are an emergency room doctor, and you have a gentleman before you who happens to have a cavity in his tooth, nerve damage in his arm, and a massive gash in his femural artery from which his life force is leaking out in a continuous red bleeding stream.

Which problem do you attend to first?

If you have any ounce of medical knowledge (or have ever watched more than 2 episodes of medical TV shows), you probably realize that you’ve got to stop his bleeding first and foremost.

The Precious Pearl Principle is named based on a parable told by Jesus (Matthew 13:45-46) in which a man/merchant went about looking for “Goodly Pearls” and after he’d found “a pearl of great price”, went and sold all that he had to buy the field in which he found the pearl.

The Pearl of Great Price was the highest priority action. In a business, your “precious pearl” is the highest return lever you can act on. In the emergency room example above, the “precious pearl” is closing up that bleeding artery. Everything else becomes subordinated to the priority of that action.

In the Theory of Constraints management philosophy first articulated by Dr. Eliyahu Goldratt, this “precious pearl” is known as the “Core Constraint”.

I plan a detailed treatment of the Theory of constraints later on. For this lesson, the important thing you should take away is that the core constraint finds its definition based upon a goal that you have set.

For instance, in the emergency room example above, your goal as the physician is to keep the man alive and nurse him to complete health. While there are at least 3 obstacles to your patient reaching his goal, the tear in his femural artery is the core constraint that should be dealt with.

What does this have to do with managing your small business?

Well, small business owners often struggle with priority and time management. Many of us spend hours and hours working on the “right things” in our business instead of the “most important thing”. If you find yourself multi-tasking, you’re probably working on the “right things” instead of the “most important” thing.

3 Important Questions You Can Ask Yourself Right Now

These are some of the questions that begin to come up when you focus on the “precious pearl” in your business.

In my marketing consulting practice, I take the approach that the highest return lever in most small businesses continues to be their marketing system. Within that marketing system, the “precious pearl” is to:

Develop, Define and Communicate Your Competitive Advantage; the idea, promise, or offer that differentiates your business from all other competitors (including “doing nothing”). This idea is also called your Unique Selling Proposition or USP.

If you haven’t properly developed an effective unique selling proposition in your business, every subsequent marketing effort and activity may yield sub-par returns. A USP makes every advertisement, every networking conversation, every marketing campaign work 5 to 20 times harder.

My work with my business growth consulting clients always, always, begins with an examination or development of a USP that actually works.

Yesterday I had a business brainstorm with a very impressive entrepreneur and general manager of a successful restaurant franchise right here in Colorado.

One of the things that came up during our conversation was the subject of taglines for business, product or programs.

A tagline or USP slogan is a short and memorable (hopefully) encapsulation of the unique value that a product or business delivers to the market place. It is not a USP (unique selling proposition), it is only part of a USP because a USP at its best should include a mini-argument supporting the claim or promise that is made in the tagline or slogan.

An effective tagline is important because it acts as an ambassador for your core selling argument. It helps you get the best response out of every advertising and marketing campaign, and helps you get the maximum number of referrals to your business possible, as well as boost the profitability of those referrals.

A good tagline or USP slogan should continually reinforce the central marketing promise or argument you want your business to be making in the marketplace. At its best, it provides your referral centers and referring clients with a ready-made and viral script for why others should do business with you.

In my opinion, the best taglines all successfully convey a believable promise regarding something the marketplace cares about. The first line of this article is from the product branding of Rice Krispies cereal, and that phrase has illustrated the longevity and power of an effective tagline since it was introduced in 1933.

The most compelling USP slogans encapsulate all the attributes of a good USP. These attributes, derived from Rosser Reeves in 1961, are as follows:

1. It must communicate a specific promise, offer, or beneficial claim to the consumer.
For example (GEICO: “15 minutes can save you 15% or more on car insurance”)

2. The promise, offer or beneficial claim must be something unique. To quote Rosser Reeves, something the competition “either cannot, or does not, offer.”
For example (FedEx: “When your package absolutely, positively has to get there overnight”)

3. It must be compelling enough, strong enough, to move people to action. This is even more important in today’s world than ever before because today’s consumers are absolutely inundated with choices in media they consume, in marketing pitches and in engagement options. An example of a tagline that cut through the clutter and snatched attention was the phrase that yanked Domino’s Pizza upward and into prominence (“You get fresh, hot pizza delivered to your door in 30 minutes or less — or it’s free.“)

Invest time, thought, money and effort in a system for finding the core strengths and core uniqueness of your business or products. It will pay off when you uncover a selling argument that meets the 3 conditions above. Once you have that selling argument or USP, coming up with a tagline that pops is just a simple hop, skip and jump away.

Till next time.

In his article, “Dead Men Don’t Blog”, he made a point that many internet publishers and marketers might agree with. He essentially points out that many of us have built web-based archives of our personality, our plans, our dreams and our intellectual property, without thinking about what happens to it all if we pass away.

I had actually been thinking about this a lot lately. Ever since my father passed away last year (that’s him in the picture on the left – My wedding day and he wanted his “Kalabari tuxedo”), I’ve wondered what to do with his archive of books, writings, papers (including written on newspapers – think “a beautiful mind” if you ever saw that movie).

You see my father was a scholar, minister, war-time rebel, developmental activist, government official and many other things during his time. He was most of all a thinker and writer. Apart from published scholarly works, he wrote tons and tons that were never (and may never be) published.

It wasn’t even hours after he died before close collaborators and friends in the academic world were reminding me that we should not toss out his work. In his case, it’s a bit easier because these materials are physical, and therefore easier to find (but not easier to organize, digitize or store).

Unfortunately it may end up costing thousands and thousands of dollars to archive, organize and store this material.

I’ve also found that I’ve picked up my father’s penchant for thinking and writing. I have notebooks and papers, poetry collections, business principles, theories and ideas all over the place. I know that if I died today my wife would not even know how to find all my websites.

I recommend you read the Ray Edward blog post, and let me know your thoughts here as well. What do you intend to do?

As for me, I’m going to create a backup system listing all my domain names, account info, etc.
I’ll also begin to create a system for re-organizing all my notebook content into separate notebooks for separate subjects…especially the money ideas. There are multiple million dollar ideas that I’ve removed from my brain and left lying around on notepads, and looseleaf binders all over the place.

We’ll see how it goes.

“The goal of marketing is to obtain competitive advantage” –
In my opinion? No good!

Another source says,

“The goal of marketing is to drive sales” –
In my opinion? Better, but not there yet!

In my opinion the ultimate goal of marketing as a business function is to turn the process of turning a profit from an art to a science, from guesswork to system, from happenstance to algorithmic certainty.

Seen this way, competitive advantage is a by-product of good marketing and not it’s goal, driving sales is only part of the goal.

A business is merely a system that turns a set of inputs into desired outputs (profit). Marketing can help even out the variance in the performance of this business system by bringing predictability to revenue flows (systemized lead generation, continuity membership programs, etc) and predictability to prospect conversions.

Integrated marketing systems, automated marketing systems and internet marketing systems are all examples of how predictable marketing messages and behavior (delivered by systems), and predictable performance (such as those of robotic websites, autoresponders, etc) can create predictability of revenues and profits.

If marketing in your business has not been streamlined and integrated in such a manner that it can be referred to as a system, you should do so today… your business will be better for it, and so will your bank account.