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Sharp, Insightful Business Strategy Book- A Must Read
on June 7, 2010
While it is often easy to see patterns of failure in business, it is very challenging to replicate success. That is why I was so intrigued with the methodology behind Les McKeown's new book Predictable Success. I have engaged with over a thousand entrepreneurs and businesses in my career and Les' insights on how to structure and manage an organization would provide value to every single one of them, from start-up to Fortune 500.
Les describes seven stages of the business lifecycle, with Predictable Success being at the peak.
First he describes how every business starts out in a struggle to find a sustainable and profitable market for your products/services before your capital runs out. This can take up to three-five years to master and there are pretty much two options- you succeed and move on to the next stage or if your capital runs out you fail, which happens to upwards of 85%+ of all new businesses. I know there are a lot of folks professing bootstrapping strategies, but as Les's model demonstrates, if you run out of capital before you find that sustainable, profitable market, you will end up in that majority end of the statistics. The compromise: be frugal and scrappy in your expenditures, but still have that capital available to give your business enough time to get its legs underneath it.
If you make it out of the early struggle, Les says you get to a high-growth stage called "Fun" (his highly technical term for it). The business grows rapidly, you begin to see the fruits of your labor, but as you grow, your business becomes more complex. Eventually, in your business' growth, you will get to a point where systems and processes are needed and the entrepreneur(s) can't just manage the business viscerally. This moves you from Fun to a stage called "Whitewater", which can be recognized by the fact that you start dropping the ball, so to speak, in one or more areas of your business. The bad news- it is an unavoidable part of growth. The good news- if you put the right processes and systems in place, you will make it out and put yourself into Predictable Success.
One of the biggest takeaways for entrepreneurs is that Whitewater is an unavoidable stage, but that there is a light at the end of the tunnel (or waterway, if you will).
While Les says that it is theoretically possible to stay in Predictable Success forever, just like people age, businesses can age too. And sometimes, managers go a bit berserk with the systems and processes to the point that everything has a system or process, often favoring form over function. When your business starts expending tons of energy and not moving forward (i.e. growing), then you are on the "Treadmill". This stage is critical- in Treadmill, you can fix things and infuse more entrepreneurial spirit in your organization and go back to Predictable Success. If you don't fix things in Treadmill, you head into the "Big Rut" and lose the ability to self-diagnose (and change).
There are many key insights for mature business in the book that describe what to do when the entrepreneurial spirit has been sucked out of your organization.
Regardless of the stage of your own business (and definitely if you advise other businesses) this is a very worthwhile read that will really help you hone your business structure.