15th Jun 2016
By Darren Shirlaw, Co-Founder of Shirlaws.
In the previous articles I outlined the predictable black holes that any business can fall into and described the cycles between the black holes. This articles looks at the common tendency to creep and suggest ways to jump instead.
A common mind set in business is to invest only in the stage they are currently at rather than the one they are trying to reach. Investing ahead of current business needs is actually the only way to Jump.
Don't keep cutting corners
Lets say you are trying to build your business to 1.2bn from 600m. How much would you spend on brand strategy at 1.2bn? Lets say 5% i.e. 60m. 60m for your current business of 600m is, on a 20% margin, 50% of your profit. The business will chose to not spend that on brand.
As a result of this thinking the business cuts corners – but this cutting corners wont get them to 1.2bn quickly.
Instead the business simply creeps.
Easy to creep instead of jump
You’ll creep from 600 to 700 and then fall into the 700m black hole. If you want to jump you have to be serious about investing. Then you’ll jump over the 700m black hole.
If you want to jump an entire band say from 238m to 1.2bn then you have to reach up to 1.2bn first. From this perspective you can formulate a brand strategy and return to build a complementary product, channel and sales strategies.
Most businesses tend to build incrementally – perhaps lacking the confidence to make the large investment – and so end up creeping.
700m and 4bn are typically where larger businesses get stuck because business leaders must invest for the next phase and they’re only investing in the current phase.
Making the business jump
Whats important about preparing to jump is to think far enough ahead – not just incrementally, but to focus on the next big number for the business. Planning as if your company was much bigger by using a series of predictable numbers will help you spot exactly where to invest today.
To hear Darren Shirlaw
explain the detail behind these concepts attend his sessions in the Shirlaws room at the International Festival of Business CXO event on 23rd June.
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