First Survive, and then Thrive
As a business owner or leader there is a seemingly never ending list of advice about how to rapidly scale or growth hack your way to nirvana. But what if it’s mostly bulldust?
Do these transformative programs or this growth hacking actually work?
It’s a complex question, and it depends what you are trying to achieve, but for me, as a person who has worked with hundreds of leadership teams and CEO’s building plans that deliver meaningful results, I think it’s important to break these things into a logical and meaningful order, that is based upon a key premise. You can’t run before you can walk, and you can’t walk before you can crawl.
So before you can Thrive, do you need to just Survive?
“I’m impatient”, that’s the typical response I would get from this question. And how is that working for you? How does that connect to long term, meaningful success?
Well, what does Survive actually mean?
I’ve been working with leaders of businesses from $1m to $250m revenue in one form or another for ten years utilising primarily the Gazelles, Scaling Up, Rockefeller Habits and Gravitas Impact frameworks which suggest that there are Four Decisions you must get right in order to grow. You must have the right people, you must have a strategy which is unique and different, execution which enables profit to fall to the bottom line, and cash reserves and a business model which can sustain the growth.
If we look at each of these are you ready to Thrive, or do you need to firstly Survive?
In the first stage, it’s important to stabilise each of the four areas, to ensure that the business is capable of progressing to Thrive. In the Survive stage, each of the four decisions would be measured as follows.
People (Survive) – At least 80% of the people in the organisation are ranked as being generally aligned with the Core Values and generally productive in their roles.
Strategy (Survive) – Gross Profit dollar growth (not revenue) is greater than 10% per annum.
Execution (Survive) – Net Profit percentage per quarter is >5% to <10% profit consistently.
Cash (Survive) – The business has 1 month of operating cash reserves in a seperate bank account. Therefore the business could pay all it’s bills for one month without any revenue.
Only after each of these four elements have been achieved should the business begin focussing on Thriving. Why? This provides a strong foundation to begin the next phase. The next phase which will strain the business and very quickly the fundamental laws of business will find the weakest link and create major challenges.
Of course work begins on the Thriving phase very early on whilst stabilising the business. But one cannot Thrive unless one has stabilised first.
Once the Survive stage has been achieved, the leadership team can then cast it’s efforts fully toward Thriving.
In the Thrive stage, the leadership team is able to leverage the stability and focus achieved in the Survive stage and work toward the following targets.
People (Thrive) – The employee Net Promoter Score, a measure of employee engagement, is above 50. For reference Apple’s eNPS was 89 in 2016.
Strategy (Thrive) – Gross Profit dollar growth (not revenue) is greater that 25% per annum. The key here is that perhaps your current business model is unable to support this level of growth and major business model change is required.
Execution (Thrive) – Net Profit percentage per quarter is >15% profit consistently
Cash (Thrive) – The business has 2 months of operating cash reserves in a seperate bank account. Therefore the business could pay all it’s bills for two months without any revenue.
The premise here is simple, first put your effort to Survive, to stabilise the business you already have by using these four key areas as benchmarks.
After you have achieved these, and the business is stabilised in all four areas, begin to place your effort toward Thriving, again considering all four decisions, and the identified benchmarks.
In 2019 I will be releasing my new book ‘Made to Thrive: The Five Roles to Evolve Beyond Your Leadership Comfort Zone‘.
It started with a simple question. What makes a great leader?
What results does a great leader create which have a tangible impact?
And how does a great leader create these results?
The result is Made to Thrive: The Five Roles to Evolve Beyond Your Leadership Comfort Zone‘ my new book to be released in 2019.
A simple, practical and actionable handbook which clearly demonstrates what you must do to create a greater impact within your company, and exactly how to do it.
5 Roles, 5 Effects, 1 Checklist & 25 Tools. My goal is to create a book you can read on a plane and put the tools to work in your business immediately.
You can pre-register for the book here.