Three Unusual Things to Survive and Thrive
1) Exclude Budgets from your strategic planning.
Both are internally focused. Budgets focus thinking on limiting, restricting, cutting, staying within bounds, when all thinking should be about “growth” of sales, profits, ideal customers, dominated niches, dominating market offers, etc.
Imagine when the strategy is a Revenue Strategy focused on growth with the acknowledgement that the maximum growth is a function of the “Brand Promise” to the market, the Revenue Strategy to monetize the “Brand Promise,” the alignment of the strategies deployment with the “Brand Promise” and the execution of that deployment (execution is a function of execution resources required and the leverage achieved).
Budget is a focus on limits and a Revenue Strategy is a focus on the most profitable growth possible based on available resources.
An unintended consequence of budgets is each group plans for their safest plan to satisfy the budget limits, which increases an organization “Cost of Chaos” to produce the limited revenue it does produce. In a B2B business that “Cost of Chaos” is 20 to 40% of the companies topline. The greater the focus on a budget the greater the “Cost of Chaos” which decreases both growth and EBITDA – often requiring additional budget cuts which further increase the “Cost of Chaos” and decreases profitable growth.
A Revenue Strategy focused on aligned deployment immediately decreases the “Cost of Chaos” (moving cash to EBITDA) and releasing the top line to grow. With the increase in EBITDA, there are additional resources to accelerate the growth of sales and profitable revenue even in this fiscal year.
2) Exclude SWOT from your strategic planning.
SWOT stands for strengths, weaknesses, opportunities, and threats. Revenue Science™ tells us there is only one thing that assures survival and that is “continually producing more profitable sales and revenue.” The best way to “continually produce more profitable sales and revenue” is to uniquely solve compelling high-value problems for customers, since a customer is advantaged to pay for in kind of value.
When an organization spends its resources on SWOT there is no requirement to spend resources on thinking or acting on the only thing that matters – the customer and their problems you can solve in a high-value way.
SWOT is all about internal focus and how an organization’s internal resources and execution compare to other organizations internal resources and execution.
The world is transparent, and customers want to know if you are thinking about how to make their world better! They don’t care about your SWOT, so stop wasting resources on SWOT and learn to think, communicate and act in ways that solve high-value problems for customers today and for the long-term.
3) Start saying NO to a lot more customers, partners and employees.
When a market is in the middle of a buyer frenzied bubble the buyer will buy almost anything at prices not related to long-term value and they do it at an ever-increasing velocity.
When bubbles burst (all bubbles burst) seldom does the profit from within the bubble period cover the carnage from the burst. Many of the companies that look good in the bubble (think Blockbuster or Sun Microsystems) don’t survive at all and those that survive may take years or decades to attain sustainable health.
Surviving companies, companies that survive and thrive and great companies reach those levels because they say NO a lot.
They say NO to bad business, customers, partners, investors, and investments. They focus their resources on long-term sustainable, scalable and defensible positions in the market, which means they continuously solve real, high-value problems, for partners (they say no to bubble buyers who will soon be gone), and it means they don’t do anything the bubble asks for a short-term contract. The investment is in strategic long-term assets and relationships. Often, they guard their cash, so when the burst happens they acquire customers, assets, staff and Intellectual Property from those struggling to survive.
Don’t let short-term greed blind you to the bubble. Say NO to non-partners, employees who just want a big check for a short time and business partners trying to make money from the bubble market.
A Revenue Strategy is not focused on budgets, SWOT or bubble growth. The myths from the bubble-driven twentieth century gave most individuals and organizations ADD (attention deficit disorder) and they work way too hard jumping from one bubble to the next hoping something pays off for the long-term.
A Revenue Strategy focuses on adding value to the customer by solving compelling high-value problems. With that as a long-term strategy, you will make money right along with your customer and the customer will not want that to stop any more than you do.