It was about 8 o’clock at night when the brick came smashing through my living room window. My children were just toddlers, playing in the very same room. Then the death threats started coming. A few days later, I hired a round-the-clock security guard for my family.
Many employees were openly hostile. Some were secretly telling my board what I was doing. Others were plotting against me in hopes I would get fired. My board questioned almost every move I made. The media hounded and harangued me constantly. Most nights I couldn’t sleep, wondering what to do next.
And just when I thought it couldn’t get worse, my wife started getting anonymous calls claiming I was having an affair with one of my employees. I wasn’t.
Welcome to world of hyper-growth.
I didn’t make up those stories. All of those things happened to me at one time or another after I put a company on a hyper-growth trajectory. Here is a spoiler alert. Everyone will be against you. Your customers may not like it. Your employees won’t like it. And your board and shareholders might not like it either. Why? Because hyper-growth represents change. It represents risk. And it represents hard work. Things most people want nothing to do with.
So, don’t think for a moment this is a grand adventure. It’s more like a scary ride. But if you decide to get on that ride, buckle your seat belt and throw on your flak jacket! Here are eight hyper-growth principles to help guide you.
Hyper-Growth Principle #1: It’s Not About Sales Growth-It’s About Profit
Don’t make the mistake of growing the business for growth’s sake. It may give you bragging rights at the country club for doubling the size of your business, but if you didn’t also double profit, you missed the mark. Doubling sales without a significant profit increase only adds costs, headcount, liabilities, and post-sale support issues.
Your focus should always be on growing profit, not sales. But how do you grow profit without growing sales? There are lots of ways, but the easiest is to find and eliminate waste and inefficiencies in your marketing and supply chains. Reduce non-value add costs in overhead and administrative expenses. End of life products that don’t pull their weight. When is the last time you raised prices? I’ll bet it’s been a long time. Sales people will say you can’t raise prices because that would force them to have uncomfortable conversations with their golf buddy customers. Don’t believe them. Force the conversations and test their assumptions. And cut out trade show expense unless you have something new to show.
Hyper-Growth Principle #2: Eliminate The Business Killers
The primary reason a business underperforms is people. People that are stuck in the paradigms of yesterday. They don’t realize or can’t accept the new realities of today. Here is the bad news: If they have been stuck in that rut for decades, you can’t change them. You shouldn’t even try. Replace them. I can’t tell you how many times I have tried to bring rut-stuck people into today and they refused to come along. Just remember that your competition isn’t waiting around for you to get your act together and the more time you waste on yesterday’s people, the more jeopardy you place the business in.
Hyper-Growth Principle #3: Dig For Gold
“Trapped value” is a term for value that is locked inside the business and could be put to better use. Trapped value is most often found in inventory or in the marketing channel. I once found millions of dollars in trapped value inventory that I converted to cash to fund new initiatives. And I have often found a company’s marketing channel returns more value to outsiders than it does to the company itself. One time I made a simple change to a marketing channel that increased the company’s profit by over 60%!
Hyper-Growth Principle #4: It’s The Culture, Stupid
This is not a “free pizza and beer for lunch” concept. Underperforming businesses are largely that way because of underperforming or dysfunctional cultures. Job one is to transform the culture from what it is to what it needs to be to outperform. The bad news is this is a multi-year process that requires the CEO’s close and constant attention. This is not something you can delegate to the health and happiness department. Your model for the culture you want should be a Cirque de Soleil®-like culture. You want employees who, like Cirque de Soleil® performers, come to work everyday all jazzed up about making today better than yesterday. I believe so much in the power of culture that I have written extensively about it in all five of my books.
Hyper-Growth Principle #5: Don’t Take Chances…Take Big Chances
Don’t take little chances with the business. Little chances bring little results. Only big chances bring big results. But big chances always seem stupid and scary to stakeholders who are more comfortable in, well, being comfortable. I can’t tell you how many times I have come under fire from boards and shareholders for taking big chances. Be prepared to stick to your guns if you really believe in your big chance. But don’t misunderstand me, make sure you have thoroughly researched and vetted your big chances.
Hyper-Growth Principle #6: The Good, The Bad, & The Ugly
Big chance initiatives absolutely demand the 3 C’s of strategic communication: clear, compelling, and convincing. And don’t just tell your stakeholders all the good things that will happen if you take the big chance. Most people will not run to something that is attractive. But most people will run away from something that is not attractive. So, you must also talk about all the bad things that will happen to the company if you don’t take the big chance. And relentlessly communicate the good, the bad, and the ugly every chance you get.
Hyper-Growth Principle #7: Kill The Blood-Sport Committees
How often do people tell you an idea you had was terrific? You know the answer to that. And if you get in a room with 20 people and propose something, I guarantee most of them will think it stinks. Why? Because they are all trying to prove they are smarter than each other. It’s what I call committee blood-sport.
Half of my ideas are completely worthless. I just never know which half until I get them out in the world. Don’t let blood-sport committees decide if an idea is any good or not. Get ideas into the market as fast and inexpensively as you can and let it decide.
Hyper-Growth Principle #8: Throw Everything At It But The Kitchen Sink
When you get behind an idea or a big chance, get behind it 110%. Don’t go at it half-way. Half-way measures are bound to fail. Half-way measure signal to your team and to the marketplace that you really don’t believe in it. Don’t hedge your bets. Give it all you have.