How to maintain your business growth in a world of uncertainty
Uncertainty is back, and this time it’s on steroids. The UK economy is tanking, and interest rates are soaring. Instead of stabilising the situation, the government seems to be hellbent on suicide. Surrounded by all this turbulence, businesses are in danger of being knocked off course. It’s hard to keep a steady ship, let alone think about growing.
Yet, in uncertainty, there is opportunity. I’m not just saying that. It’s my experience. I scaled two UK businesses from zero revenue to £30 million. Both were during recessions.
You may not be able to control external forces, but there’s plenty you can do internally to take control. Let me introduce you to the ‘Twenty Mile March’ concept.
Learning from Amundsen and Scott
Jim Collins coined the phrase ‘Twenty Mile March’ in his book, ‘Great by Choice’. He found this approach in all the ‘great’ companies that were 10x better than average. It describes the difference in strategy between the explorers Roald Amundsen and Robert Falcon Scott in their effort to lead their teams to the South Pole in 1911.
Amundsen made it to the Pole on time. Scott’s efforts famously ended in death. What is it about British heroes? They gain fame through defeat! Why is there glory in that? Beats me!
The reason why Scott failed came down to poor planning and a lack of focus. He wanted a fast push to the Pole using new technology. Instead of choosing one form of transport, he took a variety with him – ponies, dogs and an early version of a ski-doo. But the dogs weren’t the right breed, the ponies froze to death, and the ski-doos weren’t reliable. Disaster! Scott left the pre-work to his subordinates, and when they got to Antarctica, they were erratic in their execution. Some days they walked 40 miles; other days, they held camp.
In contrast, Amundsen planned carefully. He tested his dogs, decided they were his best hope and picked a manageable speed of 20 miles a day. There were days when they could have gone further. They didn’t. There were tough days when it was a slog to achieve 20 miles. But they pushed through. He took enough food to stay the course and kept a steady pace. And he won the race.
Remembering the lessons from these two different approaches can be helpful.
Identifying leading indicators of progress
Twenty miles a day is a leading indicator for Amundsen. He’s worked out that if he does that, and only that, he’ll get to the South Pole. Above all, it’s manageable, and he has sufficient supplies because he knows how long it will take.
Often, businesses push too hard in the early days of a new initiative. Then they fail to grind it out when they need to. When I start working with clients, they have no way of knowing whether they’re making progress. They’ll miss a marker and not realise until it’s too late. This happened to Scott. When he froze to death, they were only four miles from a food depot. Maybe they could have found the strength to push on if he’d known this.
You need to identify clear performance markers that are within your control to achieve. And a proper timeframe that’s long enough to manage yet short enough to have teeth.
Finding the right pace
So how do you find a leading indicator to track? And a pace that’s sustainable? Let me give you an example from our recent work with a client. They were having operational difficulties. Their sales team had done some deals that weren’t a good fit. Because the business was behind in its sales goal, they said yes to this new business even though they had misgivings. And sure enough, it was making people unhappy.
We looked at their Target Operating Model, which was four monthly deals. They were only doing two. To do four deals, they needed 16 sales-qualified leads from marketing. And they were only getting eight. At that point, they only had one Sales Development Rep doing the outbound calls, generating these leads. So using this level of activity as a guide, they realised they needed to hire two more SDRs to get the leads up to 16. Now they have a plan for sustainable activity. I advised them to work out the number of calls each SDR needed to make daily to achieve these leads. Once they had this data, they could focus on this leading indicator to ensure a manageable pace.
Because the deals we discussed had a lead time of six months to close, we were looking at revenue for next March. Did they have enough deals in the pipeline to hit their revenue target? No. So next year’s budget was a fantasy because they’re already behind. This detailed tracking based on solid evidence is often missing in business plans.
Focusing on one number
Get clear on pinch-points in your company. Then make them a focus. Going back to the example above, our client’s executive team needs a constant focus on those four monthly deals. If they’re achieving them, they’re in good shape. If they’re not, they’ll fall behind.
Work out the one number that you can unite around and make this the lynchpin of your economic model. It should be an input you can obsess about every day to make steady progress towards your destination.
We were obsessed with monthly recurring revenue changes at the two hosting companies I’ve led in the past, Rackspace and Peer 1. A daily sales report went to every member of the exec team. We focused on what had happened to this number the previous day, which was discussed in our daily huddles. The changes may have been marginal, but if you looked at them monthly or quarterly, they were too big to discuss.
Whilst the rest of our industry saw churn as inevitable, we had negative churn. Many of our customers were growing by a small percentage every month. Not huge, but it acted like compound interest and led to constant, steady growth. We’d built a solid business.
Prevailing through turbulence
Financial markets, inflation, pandemics and technological change are all out of your control. But when you introduce a Twenty Mile March, you have a tangible point of focus that keeps you and your team moving forward, despite the confusion, uncertainty, and even chaos.
I recently talked to Guy Rigby in a conversation for an upcoming episode of The Melting Pot podcast. At 68 years old, he’s the oldest man to row across an ocean. They rowed two hours on and two hours off for 53 days until they got to Antigua. The worst time on the whole journey was the last four days. Planning on arriving in Antigua on Sunday, they hit punishing currents that pushed them back. Monday came, then Tuesday, then Wednesday. But they kept it up—two hours on, two hours off until eventually they made it.
Slow and steady wins the race. Reminds me of Scalextric. How often have you raced people who go too fast down the straight and come off on the corner? Their car shoots across the room, and you win by keeping your car at the maximum speed for the car to stay on the track.
An agile approach
The Twenty Mile March fits with the essence of agile businesses. Taking an agile approach means you break an initiative down into something you can control. By focusing on the short-term, immediate horizon, you can work out a sustainable level of delivery. You then improve that over time with a relentless focus.
Picking three to five objectives for the year and sticking to them. Becoming accountable for the outcomes and ensuring that the number 1 thing is the number 1 thing. That’s how you take control in a world of uncertainty.
- NAVIGATING AND COMMUNICATING CHANGE
- BUILDING COMPANY CULTURE
- CHOOSING THE RIGHT OPPORTUNITIES
- ORGANISING YOUR A-TEAM
Written by business growth coach Dominic Monkhouse. Find out more about his work here. Read his book, ‘F**k Plan B’ here.