The Three Tensions by Dodd and Favaro

1 minutes estimated reading time

While reading The Three Tensions I was reminded of a plaque that I used to have. It was one of them demotivational poster designs.

The Three Tensions

When I was leaving a previous agency I was given the plaque as a leaving present. On the plaque is the message ‘If you can’t solve a problem, there is good money to be made in prolonging it‘.

Consultants and management thinking yo-yo from one area to another. For instance, from the 1960s to the 1980s conglomerates were the fashionable way to go, for instance ITT, Xerox (who had an insurance business to balance their cash flow) and Coca-Cola who owned a film studio. Now there is a focus on the companies core competences, in fact organisations often outsource so much of their infrastructure that they scarcely have any physical existence.

An extreme example of this was Enron, who was advised by management consultants to move away from being a natural resources infrastructure company to a more asset light structure. Throw in some corruption and the rest is history.

Dominic Dodd and Ken Favaro in their book The Three Tensions aim for a more balanced approach to moving a business forward. The three tensions of the title are:

  • Profitablity vs. growth
  • Short term vs. long term
  • Whole vs. parts

The authors relied on long term research of a number of companies. The balance that the book advises businesses to obtain is not easy. The book also makes it easier to diagnose the faults within an organisation. More on the book here. More business related posts here.