Revolving vs. Evolving
The difference in trying to grow, and actually doing it.
I’ve always found the hour as a super interesting metric…
While the number itself is uniform - an hour is the same everywhere - how that metric is USED and analysed is entirely different.
Task to task.
Project to project.
Person to person.
Business to business.
If you really break it down, you’ll see why an hour can be useful as a tool for some benchmarking or setting goalposts, but it is not the end-all and be-all of measurement.
From an efficiency standpoint, it makes zero sense as well - if you are paid by the hour, then you are motivated to count the hours, rather than making your hours count.
Too many people and businesses become overly obsessed with hourly efficiencies rather than focussing on the big picture.
It’s like personal finance gurus telling you to cut out five-dollar lattes while failing to mention high admin fees on your superannuation accounts could be costing you tens of thousands of dollars instead.
Ask better questions, and get better insights.
That’s one of the first steps in starting to attain any leverage in any activity.
I’ll return the frame to the ‘hour’ - whether we have a single allotment or a collection of them, we can either use them to do more of the same (REVOLVE), or move forward (EVOLVE).
Are the hours quality? Or are they simply amassing quantity?
When it comes to evolving - I believe it starts with how you look at the collection of seemingly small decisions that compound to have a massive impact on your life - be it personal or business.
As always, it must start from a place of understanding, first.
So what are the major differences between a revolving business and an evolving business?
Businesses that revolve:
Busy enough to keep the lights on, pay their wages, and take some profit home. But, they are often scrambling with so much to do IN the business, they rarely are able to work ON it, or actually enjoy the profits they do take home.
It’s hard for them to plan beyond the next week. They feel overwhelmed or talk about how busy they are multiple times per day - they’re too dependent on the ‘do’.
Marketing is super inconsistent. They embody the concept of rollercoaster marketing.
Costs typically rise in higher proportion than their revenue. Top-line revenue is up, but so are the costs of delivering the work, and the proportion of profit is not the same - the bulge of dead weight can be problematic in the future if things change.
Goals are linked to vanity milestones without understanding what the numbers truly mean in their business. I.e. doubling revenue, or becoming a 500k, 2m, 5m, 100 m business - it doesn’t matter, if the goal is just a number, and not linked to the tangible activities to generate them, or reflective of the business they need to be to attain and sustain it, it’s going to get turbulent [more on this here]
They’re not intentionally reinvesting profit per client into activities that help them intentionally increase their client's lifetime value. Growth doesn't end with acquisition - it is bolstered by retention, re-engagement, and advocation. If you flatline or churn in these categories, growth will be even further out of reach.
Truthfully, I am seeing this more and more. The supply and demand dynamic in the market is lending itself to some phenomenal growth in certain sectors, and it’s an exciting time.
The thing is, in business - it doesn’t take long for you to acclimate to your surroundings and to start believing this is the new normal, and all you need to do to grow is answer enquiries and lock in the work to grow.
If everything you hear everyone is having record months - it is typically a sign of there is a ton of demand and a lack of supply across many industries at the moment.
This was basically lesson one in my marketing degree.
I’ve seen countless industries experience massive metrics while doing the exact same thing. After a while, this will seem like the new normal, and they’ll forget the day when all they had to do was field enquiries, answer questions, and be available for a client to pull the trigger on a sale.
I’d be lying if I didn’t say that TENASU has been a massive beneficiary of this as well, and I am definitely not saying people shouldn’t bathe in personal accomplishment, have goals, or celebrate the wins - it’s super important.
After almost eight years in business - you learn that nothing is ever as good or bad as it seems - it’s important to keep an even keel and a healthy perspective no matter the situation.
Business is a wonderful vehicle for personal and professional growth, but even as an extreme optimist, I adopt the Richard Branson school of thought that to achieve longevity in business, you need to be just as mindful of mitigating your risk, while taking meaningful steps forward.
The thing about markets - is they are constantly in flux, expanding and contracting - riding the wave with them sounds extremely risky.
Change is on the horizon, and preparing for it is crucial.
It won’t be here abruptly, it’ll slowly creep in, and it doesn’t always show up in the same way.
Enquiries will gradually start to slow down, but are barely noticeable unless they’re closely watching or tracking - it may just be 5-10% per month.
Referrals drop by as little as 5% per month over a four-month period - a little alarming, but it’ll rebound (hopefully)
Market confidence starts to wane a little bit, meaning the urgency is not there as much - sales conversions may even be steady, or drop by 1-2%, but the average close time expands from 1 week to 3 weeks, or 1 month to 3 months.
They may increase their staff load or resources by 20-30% to cater for increased demand.
All of a sudden those compound and constrict and they’re running a very different business, or worse - this business is running them.
The hard truth is - it always was, they just weren’t privy to it.
This is why the process of evolution must start now - so that you own your piece of the market, instead of being dictated heavily by larger market forces that are out of your control.
You don’t need to have a large market share to be a market leader - I’ll talk more about this in my next article.
Below are the characteristics of businesses that evolve, unlike their revolving counterparts, they;
Plan ahead. Break their year into four sprints with key achievable activities, responsibilities, and deliverables that are milestone driven to contribute to bringing these goals to fruition. These are specific and measured.
Continuously optimise the marketing channels that bear the most fruit, while using the extra time and resources to experiment and diversify, so they aren’t left behind.
Build authority, reputation, and brand to own the category or section of the market. They are well positioned to their clients and competitors to solve specific problems and get paid well to do it.
Focus on their client experience, and regularly get real feedback about what works and what they would like to see improved. Have a plan for each customer touchpoint.
Measure what matters. Understand their Customer Acquisition Costs, as well as it’s ratio to Lifetime Profit Value. This enables them to build a sustainable marketing budget - they know what they can reinvest from each sale into keeping that customer happy and have a plan around it [have three great books about this, hit me up if you want them]
Constantly looking at operational and financial efficiencies. Controlling costs and outgoings in tandem with growing the business to reduce wastage and increase profit. While this doesn’t feel like marketing or branding relevant, I promise this is a massive contributor in determining a streamlined, efficient, and marketing plan that generates more predictable and scalable ROI, while fostering an environment for better decision-making.
Leaders are actively working on their development based on what and who they need to be within the business. This isn’t necessarily just hard skill improvement such as skills, systems, and processes, but soft skills such as communication, leadership, and emotional intelligence.
In short, they are growing their business, and themselves, from the inside out. The business only goes as far as the leaders grow.
This brings me back to the hour.
As a business owner or leader, it’s incredibly easy to get caught up in the busyness of business.
We get so caught up in the ‘DO’ it’s hard to focus on what to ‘DO NEXT’ that is proactive and linked to a strategy.
We wait until things quieten before starting to plan, which is the absolute worst time to do it.
If you can carve out even two hours per week, the compound growth is astronomical. You will be making decisions and implementing activities from a position of strength, rather than desperation.
Recognising this is the first step in the shift, identifying what you need to do next.
To me, it comes back to the calendar. When is there focused time allocated to progression and evolution?
This does not include late-night thoughts as your head hits the pillow, or random ideas that enter and leave your mind within the same car ride.
At the end of the day, I strongly encourage business owners to review a year, not just by metrics, but also the overall positive momentum generated.
Have they gained a year of experience? Or did they simply live the same 24 hours, 365 days over?
Have they continued to refine our thinking, skillsets, capabilities, knowledge and connections?
Or,
Have they simply jumped on the hamster wheel for another day of more of the same?
While some people are content to fill the time (or simply let it pass)
Others choose to maximise it.
Exchanging time for money, until they can exchange money for time.
That is leverage.
That is evolution.
So, how much time do you have THIS week to plan ahead?
How much more time do you think you’ll allocate next week, and next month?
Genuinely interested to know, there are no wrong answers - only learning opportunities.
Zac
Ps. It’s not all doom and gloom though. Undoubtedly people will not heed the advice of the above and when markets contract and people bow out or decline from reduced activity - there is an opportunity for others to rise.
One of my favourite stories is (see Post vs. Kelloggs), back in the 1920’s Kelloggs was second fiddle to Post, then with strategic implementation, they rose to be the dominant brand they are today.