The uncertainty is back, and this time it’s on steroids.
The UK economy is collapsing and interest rates are skyrocketing. Instead of stabilizing the situation, the government seems to want to commit suicide. Surrounded by all this turbulence, companies risk being led astray. It’s hard to keep a ship stable, let alone think about growing.
Yet, in uncertainty, there are opportunities. I’m not just saying that. This is my experience. I took two UK businesses from zero revenue to £30m. Both were during recessions.
You may not be able to control external forces, but there is a lot you can do internally to gain control. Let me introduce you to the “Twenty Mile Walk” 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 “big” companies that were 10 times better than average. It describes the difference in strategy between explorers Roald Amundsen and Robert Falcon Scott in their efforts to lead their teams to the South Pole in 1911.
Amundsen arrived at the pole in time. Scott’s efforts ended in death. What about British heroes? They become famous by defeat! Why is there glory in it? Beat me!
The reason Scott failed was due to poor planning and lack of focus. He wanted a quick push to the pole using the new technology. Instead of choosing one mode of transportation, he took several with him: ponies, dogs, and an early version of a snowmobile. But the dogs were the wrong breed, the ponies froze to death, and the snowmobiles were unreliable. Disaster! Scott left the preparatory work to his subordinates, and when they arrived in Antarctica they were erratic in their execution. Some days they walked 40 miles; on 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 did not do it. There were tough days when it was hard to get to 20 miles. But they succeeded. He took in enough food to stay on course and kept a steady pace. And he won the race.
Remembering the lessons of these two different approaches can be helpful.
Identify key progress indicators
Twenty miles a day is a leading indicator for Amundsen. He understood that if he did that, and only that, he would reach the South Pole. Above all, it’s manageable, and he has enough supply because he knows how long it will take.
Often companies push too hard in the early days of a new initiative. Then they fail to grind it when they need it. When I start working with clients, they have no way of knowing if they are progressing. They’ll miss a marker and won’t realize it until it’s too late. It 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 continue if he had known.
You need to identify clear performance markers that are within your control to achieve. And an appropriate timeframe long enough to manage but short enough to have bite.
Find the right rhythm
So how do you find a leading indicator to follow? And a sustainable rhythm? Let me give you an example from our recent work with a client. They had operational difficulties. Their sales team had done some business that was not suitable. Because the company was behind on its sales target, they said yes to this new company even though they had reservations. And of course, that made people unhappy.
We looked at their target operating model, which consisted of four monthly offers. They only made two. To close four deals, they needed 16 qualified sales leads from marketing. And they only received eight. At that time, a single sales development rep was handling outbound calls, generating those leads. So using that activity level as a guide, they realized they needed to hire two more SDRs to get the leads up to 16. They now have a plan for sustainable activity. I advised them to calculate the number of calls each SDR had to make daily to reach those leads. Once they had that data, they could focus on that leading indicator to ensure a manageable pace.
Since the deals we discussed had a six-month deadline to complete, we were looking at revenue for next March. Did they have enough open deals to meet their revenue goal? No. So next year’s budget was a fantasy because they’re already behind schedule. This detailed follow-up based on solid evidence is often lacking in business plans.
Focus on a single number
Be clear about the pinch points in your business. Then make a point of it. Going back to the example above, our client’s management team must constantly focus on these four monthly transactions. If they reach them, they are in good shape. If they are not, they will fall behind.
Determine the figure around which you can unite and make it the keystone of your business model. It should be an entry you can focus on each day to steadily progress towards your destination.
We were obsessed with changes in monthly recurring revenue from the two hosting companies I managed in the past, Rackspace and Peer 1. A daily sales report was sent to each member of the management team. We focused on what happened to this issue the day before, which was discussed in our daily meetings. The changes may have been marginal, but if you looked at them monthly or quarterly, they were too big to discuss.
While the rest of our industry viewed churn as inevitable, we had negative churn. Many of our customers were growing by a small percentage each month. Not huge, but it acted like compound interest and led to steady, steady growth. We had built a solid business.
Take it through the turbulence
Financial markets, inflation, pandemics and technological changes are all beyond your control. But when you introduce a twenty-mile march, you have a tangible goal that keeps you and your team moving forward, despite confusion, uncertainty, and even chaos.
I recently spoke to Guy Rigby during a chat for the latest episode of The Melting Pot. At 68, he is the oldest man to have rowed across an ocean. They rowed two hours on and two hours off for 53 days until they arrived in Antigua. The worst part of the whole trip was the last four days. Planning to arrive in Antigua on Sunday, they ran into punitive currents that pushed them back. Monday came, then Tuesday, then Wednesday. But they kept going – two hours on, two hours off until they got there.
Slowly but surely, we are succeeding. Reminds me of Scalextric. How many times have you raced against people who go too fast on the straight and come out on the corner? Their car shoots across the room and you win by keeping your car at top speed to keep it on the track.
An agile approach
The Twenty Mile March is the essence of agile businesses. Taking an agile approach means breaking down an initiative into something you can control. By focusing on the immediate short-term horizon, you can determine a sustainable level of delivery. You then improve that over time with relentless focus.
Choose three to five goals for the year and stick to them. Becoming accountable for results and making sure the number 1 thing is the number 1 thing. This is how you take control in a world of uncertainty.