Arnold Palmer, the legendary golfer, was said to have been sitting in the clubhouse of Augusta National one day after a round. Surrounded by agents, colleagues, and representatives from all the major golf club brands. A young caddie asked Mr. Palmer “You’ve been around a while. Seen and done it all. What technology has made the biggest impact on the game of golf?”
The room went silent. Mr. Palmer, paused. You could tell he was thinking about the question. He looked at the caddie and confidently said, “the lawnmower”.
As you can imagine, the room laughed. Then quickly realized the wisdom. In that one answer, Mr. Palmer reinforced the importance of the basics. He leaped passed the gadgets, designs, and new fads in the market and went to the fundamentals. His point was made.
At Cardinal Capital, we have quite a few sayings that make up our culture. One sign says “Hot Food Hot. Cold Food Cold. Keep the Bathrooms Clean”. A relic from my father, a restauranteur, who always preached the basics before launching a new process, or initiative. I overheard him say, “If you can’t execute the basics consistently, you will eventually fail”. He was right.
We see thousands of companies a year. Each one with a different mousetrap or widget. Often, we see these companies in trouble and needing our assistance, usually in the form of a capital overhaul. Nine times out of ten the reason the organizations are in trouble is the lack of discipline to their foundation. Delivering on their core product or service. They get creative and innovative, which is normally a good thing; however, at the expense of their primary purpose.
On the other side, we see successful organizations who are seeking to expand or manage their capital stack. As you can guess, they have a firm grasp on the core products or services they deliver. They constantly refine that process to the point its part of the company DNA.
It’s often a good reminder to go back to your basics. Are you executing those day-in and day-out? Go through the exercise of asking: What is the product or service we are delivering? Who are we delivering that product or service to? What are our core values? What do we do better than anyone else?
In a world of MBA speak, new processes, technology and innovation, don’t forget about your hot food and your lawnmower.
Rob Powell, Partner, Cardinal Capital