Everyone is a Stage 1 company…well, almost everyone! About 5 to 10% are not Stage 1 companies, so what is the big deal if you are in the same boat as almost everyone else?
- A 3-year project sounds like a lot of work. You have been successful in the past, so why change now?
- What exactly do you have to do, why do you need a Revenue Strategy now, and where will you get the resources to move from Stage 1 to Stage 5?
These are the common questions CEOs ask themselves before starting to change their business.
When you have already been successful and change appears to require many resources, take time, and possibly put past success at risk, you had better be confident that it is worth doing and something you can accomplish.
First, let’s look at the definition of Stage 1 and then, IMAGINE:
Stage 1 is a company of individual contributors doing whatever they believe is best at the moment with no common strategy, few if any metrics, hoping for silver bullets, heroes, and good luck.
Now, imagine if you had a competitor who was a Stage 1 company. Do you think you could find any weak spots?
Imagine if you were the customer or client of a Stage 1 company. How confident and comfortable would you be counting on a provider with little or no strategy peopled by individuals who don’t work as a team, each with their own individual vision of what they do for you? What if they also lack metrics to assure outcomes and count on “good luck” to move forward? If that were your provider of products or services, would you be eager to pay them a premium or would you look for deep discounts to make the relationship less risky?
Imagine if you were a highly talented and productive person looking for your next opportunity. How would you view a Stage 1 company as a place to work? Would you feel comfortable taking a job without a clear strategy or metrics to reward your success? What about a place where the very future is centered on hope and good luck?
Simply put, Stage 1 companies are risky. Stage 1 companies are great to compete against, but risky for customers, employees, and stakeholders. If Stage 1 companies are in the right place at the right time with the right thing to sell, they can do very well…until things change. Then, the good luck of the right place, right time, and the right stuff to sell will no longer be “right.”
Every Stage 1 company has a high “Cost of Chaos” and requires more resources per profit dollar than any other Stage to grow current revenue. The “Cost of Chaos” for a Stage 1 company is between 10 and 40% of the topline. Chaos is the anchor that restricts your topline growth.
When you look ahead at the results of becoming a Stage 5 company, you see:
Cross organizational alignment exists. Strategy, structure, and tools are in place. Metrics rule. Results are predictable. Transitions are opportunities.
Now, think about being a customer or client, an employee or a stakeholder. Imagine the difference between the relationships with a Stage 1 company compared to a Stage 5 company.
Imagine how different it would be to have everyone aligned around a single strategy, supported by structure and tools to make outcomes predictable with metrics in place to assure continued improvement.
Imagine what it would be like to know that this organization would be there to support you across the future transitions, not just for survival, but to actually make things better.
While the Stage 1 company has high “Cost of Chaos,” the Stage 5 company only has healthy levels of the “Cost of Chaos” (3 to 8%). This Chaos is healthy because it fosters creativity and proactive changes to assure it continues as a leader.
Stage 1 companies have numerous rationalizations regarding their inability to advance. They believe it is more important for them to be flexible to take advantage of opportunities that POP up vs. implementing a focused strategy. Stage 1 companies would say they aren’t really hoping for good luck, but are instead, victims of bad luck. Stage 1 companies are sure the effort and time required to reach Stage 5 is unnecessary as things have always worked themselves out.
The trip to Stage 5 is available to anyone who applies the science of “Revenue Generation” and creates and deploys a Revenue Strategy.
The trip to Stage 5 is paved with additional cash and supported by better and better customers, clients, and staff. It is managed by market driven metrics that keep the trip aligned to the desired results while reducing the “Cost of Chaos.”
Each Stage between 1 and 5 is more rewarding and more fun than the previous stage for staff, customers, clients, and stakeholders.
The trip between Stage 1 and Stage 5 gets started with a Revenue Strategy and one word. That word is “NO” and it is applied to the question, “Will I continue to be a Stage 1 company?”
To get to Stage 5, stop all the rationalizations, develop and deploy your science-based Revenue Strategy, and just say “NO” to everything else.