In business, it’s often a winner-take-all-scenario. Either you get the business or you don’t. But what if just a few small improvements, compounded over time, could lead to exponential growth and big profits?
The Japanese calls this Kaizen. It’s the idea that big results come from many small changes accumulated over time.
One of the best examples of how small differences can lead to exponential results comes from the world of professional golf.
In 2015, Phil Mickelson earned $51 million split between prize money on the tour and endorsements. His per-round stroke average was 70.5. By contrast, ever heard of Roger Sloan? Me either. Sloan won $133,000 on the tour. I couldn’t find anything he endorsed. His per round stroke average was 72.5.
You see where this is going?
Mickelson bested Sloan by an average of just two strokes per round yet Mickelson earned 383 times more money. In other words, Mickelson was just 2.8 percent better than Sloan, but that small margin added up to an extra $50 million in Lefty’s pocket.
Just think, one missed putt or one wayward tee shot every nine holes made the difference between being the world’s thirty-sixth highest paid celebrity and total obscurity. It’s the same in business. Small mistakes could cost you millions.
Exponential Growth
Make a point to identify areas of your business where consistent, 2.8 percent improvements compounded over time could generate exponential growth and Make Big Happen! Here are a few to get your started:
- Increase response rates by 2.8 percent.
- Increase quality leads by 2.8 percent.
- Increase conversions by 2.8 percent.
- Increase referrals by 2.8 percent.
- Increase average sales price by 2.8 percent.
- Increase average profit margin by 2.8 percent.
- Increase productivity by 2.8 percent.
- Increase inventory turnover by 2.8 percent.
- Reduce costs by 2.8 percent.
The key is you have to focus on making small improvements in multiple areas across your business. Remember basic math here. If we make 2.8 percent improvements in just three areas, that could be expressed as 2.8 to the third power, which equals about 22. However, if we improve in 7 areas, we’re looking at 1,349. Now that’s exponential growth!
At CEO Coaching, we focus like a laser on identifying these consistent improvements with our clients. For example, my client Don Schiavone, formerly the chief operating officer of Grasshopper and now an entrepreneur coach with the firm, said in the early days of Grasshopper, they would set a growth target but they had no reliable way to know which strategy or tactic would lead to hitting the number.
Today, they come up with multiple growth ideas, carefully test and measure the results of each one (fire bullets), then fully back those ideas that generate the best results. Without a rigorous testing mind-set like this, you’re simply stabbing in the dark.
By constantly testing, measuring, and adjusting, Grasshopper makes multiple small improvements over time. And this has led to stunning results including selling the company to a Fortune 500 firm for nine figures.
Make small improvements. Rinse, repeat. It’s a simple formula that works.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, the firm has coached more than 1,500+ CEOs and entrepreneurs across 100+ industries and 60 countries. Its coaches—former CEOs, presidents, and executives—have led businesses ranging from startups to over $10 billion, driving double-digit sales and profit growth, many culminating in eight, nine, or ten-figure exits.
Companies that have worked with CEO Coaching International for two years or more have achieved an average revenue CAGR of 25.9%, nearly 3X the U.S. average, and an average EBITDA CAGR of 39.2%, more than 4X the national benchmark.
Discover how coaching can transform your leadership journey at ceocoachinginternational.com.
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