THE TREADMILL PARADOX: Growing VS simply thinking that you are.
Sustainable, balanced and meaningful growth can be one of the hardest things to achieve in business. The illusion of it, however, is considerably more attainable.
That’s right. When you miss the wood for the trees, the very KPI’s that act as a beacon to success can lead you down the rabbit hole of make-believe.
It could be the size subterfuge, where the owner begins to believe that the larger the cabins and the more the number of offices, the bigger the team and partner networks, and the more the number of customers and patrons, the more successful the venture is.
It could be the revenue trap, when it’s natural to assume that louder the cash registers ring, the more robust your financial assets are.
It could even be the ghost of speed : Many businesses will press down on the pedal hard, thinking the faster they go, the quicker they grow.
As it turns out, none of them are fool-proof evidence that your business is actually growing. For one thing, it doesn’t add to your bottomline. For another, it doesn’t add value to your life, or make you happy.
The litmus question is simple: Is all that huffing and puffing yielding you tangible fiscal outcomes? The term some use for this is Operating Leverage. It’s a measure of how much your income is perceptively influenced, as a result of your topline or sales.
Businesses tend to follow the bell curve model. It’s not different from trying to shed weight.
During the initial years, if you’ve got the basics down (strategy, process, team, funds and technology), you see results quick.
And then, the law of diminishing returns sets in. Sure, the revenues might still keep flowing in, but the opex will catch up fast – and then overtake you.
You may be helming a $10 mn firm, but netting the same as a more tightly run company worth $1 million. Other reasons for hitting the profit plateau could be a negative baseline. Or a model that’s based on flawed assumptions.
There will be several signs to warn you that you’re on the way down, but you’ll need to be alert to them. The biggest one, of course, is that your Net will be suffering.
No matter which treadmill you are on, the result is the same. Even when you think you’re growing, chances are, you’re not. And you end up working for work’s sake, adding merely to your appetite for the ‘trappings’ of success (like a fancy office, teams with vanity designations, clients with big names), not success itself.
So how does one break the vicious mould?
Well, there is no easy – or one – answer to this one. A good place to start is to realize that the illusion of growth is a natural and common phenomenon in business.
Which both means that there’s nothing inherently wrong with your working process if you’re experiencing one. And that it’s usually a function of the basics gone awry. Which is exactly where you should look, if you want to bounce back.
Re-examine assumptions. Overhaul processes. Take risks. Innovate. Optimize resources. Don’t hesitate to relook fundamentals. Cut the flab. Befriend data. Rekindle your mojo for whatever it is that you do for a living.
Any – certainly all – of these will help you do the one thing that you need to do, to get off that phantom horse of growth (and stall the slide into the red): Engineer new value for your customers.
Steal a march over the competition. Shore up your bank balance. Close communication gaps. Make systems more transparent. Rejig your talent bench. Rediscover your sweet spot.
It’ll help you stay close to reality, providing the checks and balances you need to readjust your stance. More significantly, it’ll tell you exactly where you are going wrong. And the things you can do better.
To get growing, for real.
DKODING GROWTH THAT IS DECEIVING
Growth – be it personal or business – can be like a casino. If you want to walk out of the game rich, don’t linger. Learn to walk out on a high.