7 Signs Your Company Is Calling For An Upgraded Business Model
“There’s no way I can wear these. I’ll look ridiculous.”
I was in my closet, packing for a trip to spend three days with my high-level mastermind group when I realized that I only had one pair of jeans that fit me. The others were in danger of splitting at any moment.
Over the past five weeks, I’d been working out hard and it wasn’t until I started packing that I realized I’d clearly outgrown some of my clothes (most of them still new).
The same thing happens as we grow our businesses.
The model that we created to get our business to where it is today may be the very thing that’s holding us back from growing to the next level. And, we can choose to hang onto that model because we’ve invested heavily in it, or we can choose to evolve to the next level so that we can continue to grow.
And, more often than not, the very time when we need to make a change in our model is also the least convenient time to figure out what we need to do and how to make it happen. That’s because our business has usually grown to the point of demanding more and more of our time and resources to support the current business model.
Surges Are Not Sustainable
I was recently sitting in the office of a local company that’s been growing like gangbusters. A lot of that growth was driven by hustle from the founder and core team that he had assembled as the company grew.
One of the key employees told me he’d pulled two all-nighters this week just to keep up.
That’s not unheard of for startups and businesses that are growing faster than they can handle, but it’s also not sustainable. He has a wife and two kids. It’s something that may need to happen infrequently, but it once it becomes the norm, trouble is on the horizon.
When I was working with Intel Corporation overseeing the production of semiconductors (the microchip/processor in your computer or phone), we understood that we could make occasional pushes that tested the limits of the equipment and the people, but if we made that the norm, the machines would start breaking down. People would start making costly mistakes or burn out (usually both).
In that world, mistakes often costed us millions of dollars in potential revenue.
We had to find a way to structure what we were doing in a sustainable way – something we called “steady-state” in the engineering and production world.
If you’re business model is requiring regular surges to operate, push the company forward, or to prevent it from sinking, then you’re not operating under steady-state conditions…
And, like a car, you can only redline the engine so long before it breaks down.
Signs That Indicate Your Business Model Is Due for an Upgrade
There are a number of tell-tell indicators that your current business model is being strained. Here are just a few to look for within your own business:
- You or your people are regularly working long hours
- You or your people are exhausted
- Some of your best people are burning out
- Mistakes are being made (often with increasing frequency)
- The ball is getting dropped and revenue opportunities or customer satisfaction is suffering
- Your people are frustrated with the way things are being done or managed
- You’re spending more and more time fighting fires, dealing with interruptions, and being pulled in different directions
Sometimes The Change That You Need Isn’t Major
More often than not, the changes that need to occur to relieve the pressure and free everyone up to grow your company to the next level aren’t going to be major changes. As the saying goes, big doors swing on small hinges.
Vilfredo Pareto is famous for his 80/20 principle, which says that 80% of our results occur due to 20% of our actions. The trick is identifying the 20% and that’s where a fresh perspective can prove to be so valuable.
Every company is different and the solution that works for your competitors or peers may not work for you. Your 20% may vary widely from another company that seems similar from the outside looking in. But, once you identify that 20% and take action to make the changes necessary, it can dramatically improve the environment and capacity of your company to reach the next level of growth.
More often than not, the changes required to the business model are in the structure, systems and processes so that you can streamline your business, increase efficiency, reduce the quantity and frequency of mistakes, and stop the fires and interruptions before they begin.
As efficiency increases, both you and your people are freed up to work sustainable hours while doing what each of you do best, thereby allowing each person to create more value for your company.
The Biggest Challenge You’ll Likely Face When You Know You Need to Upgrade Your Business Model
Generally speaking, we do the best we can with the resources we have. Those resources include our perspectives, knowledge, and experience.
The business owners I talk to are already doing the best they can given the resources and perspectives they currently have. Once they see a better way, they’re happy to make the changes required so they can continue to grow their businesses in a sustainable way, provided that the benefits outweigh the costs.
Naturally, the challenge is knowing what that better way looks like and how to make it work for your unique situation.
One of the biggest challenges with up-leveling your current business model is getting enough perspective to know what needs to be upgraded and then finding the time to learn what your options are and how to successfully implement them.
After all, it’s hard to pull-back and get a fresh perspective when you are in the middle of the forest (especially if you’re busy putting out fires).
There are a number of different ways to get the perspective you need.
If you haven’t yet set your business up in a way that allows you to step back and get perspective on a regular basis, it may be time to have an off-site retreat with key members of your team or to take a vacation so you can get out of the forest (at least momentarily).
One of the fastest ways to get the perspective, knowledge and experience on how you can upgrade your business model is to find someone who already has it. This is one of the reasons why companies work with experts and why many successful business owners belong to high-level mastermind groups.
Personally, I invest heavily in mentors and masterminds and it’s worth every penny.
The fresh perspectives and experiential know-how are usually something I wouldn’t have come up with working in isolation, and the mistakes I avoid by learning from the experience of others save me a small fortune in terms of time, capital, and opportunity cost.