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Guest: David Desharnais, a coach at CEO Coaching International. David is a high-impact technology CEO and enterprise operator with over 25 years of experience leading organizations through scale, transformation, and value creation across more than 20 industries.
Quick Background: Companies don’t stall because their industries are stalling, or because of tariffs, or because of AI. They slow down because the CEO doesn’t have a plan to maintain growth through the good and the bad.
When your dashboards start blinking red, you need to find ways to plug your company into a broader ecosystem of customers, products, and partnerships that can recalibrate your business’ trajectory, no matter what’s going on in the rest of the world.
On today’s show, David Desharnais discusses how CEOs can break out of stagnation and accelerate their growth, as well as how to build a Jim Collins-style flywheel that will keep propelling your company towards BIG.
Keys to Breaking Through Stagnation from David Desharnais
1. Identify Leading Problems in Lagging Indicators
The first step to solving any problem is admitting that you have one. And in stagnation scenarios, CEOs can be slow to realize that something is wrong.
“Holding steady” might sound like a good thing, especially in an up-and-down economy.
A revenue “dip” last quarter might not set off any alarms.
Slowing customer conversion rates might just trigger an extra meeting with the marketing department.
But any one of these metrics could be a symptom of BIG problems. And if multiple “dips” start piling up, major problems like customer churn and monthly sales declines will not be far behind.
David Desharnais recommends taking a widescreen view of your company’s data and being aware that last month’s bad numbers aren’t just lagging indicators — they could be pointing to more problems.
“I tend to look at 10 to 12 metrics,” David says. “For example, time to first value for a customer: when is it that they see the value and are paying you. Or if you have demos that lead into pilots and the pilots lead into a rollout, but that whole cycle is slowing down. Or the sales cycle that you’re measuring used to be six months, now it’s nine months or 12 months. Or if you have partners and you sell through distribution and that pipeline is flat or shrinking or just slow. If any five of those of the set are going in the wrong direction, that is where you pull the cord and stop the train and deep dive into what’s going on.”
The good news is that, more often than not, an early-stage stall is a self-inflicted wound. If you follow your data and are willing to admit that you’re chasing too many shiny objects or losing focus on your core customer, then the CEO usually has the power to course correct before stagnation takes a turn for the worse.
2. Leverage a Force Multiplier
As they grapple with the need to grow, innovate, and diversify, some BIG businesses lose touch with what they’re best at. Or, if stagnation has led to total leadership paralysis, the company might be missing a significant opportunity that’s right in front of them.
Identifying one of these potential “force multipliers” and maximizing the resources you put behind it can transform a stall into a sprint. It could also dramatically reinvent your business if you can multiply your value proposition, the scope of your services, or the breadth of your target market.
David used this strategy to boost a fintech company he founded en route to a nine-figure exit. While the company knew its tech was strong, it didn’t have relationships within financial services to establish credibility. So David identified a force multiplier that would allow him to break through that barrier and sell more than he could on his own.
“We decided to move into a strategic sell-through motion with a strategic partner,” David explains. “And that led to two, and three, and five strategic partners that were involved in managing bank relationships, accounts payable, accounting software that was cloud-based, things that were already part of the workflow for the customers we were trying to sell to. We couldn’t break in directly, but we were able to take our strength, which was technology and the ability to embed our technology inside other very critical workflows that were already being used by the customer. And that created a pull. So much so that we dedicated probably 80% of our investment in selling and marketing, moving from direct to indirect, empowering these strategic partners to make the inroads that we couldn’t make. We were able to create a ‘toll’ situation where we got paid every time our technology transacted that was so successful that we became a target for acquisition by a very large strategic partner. That ended up being a very good outcome.”
David also recommends examining what he calls your company’s PRESTO: the Political, Regulatory, Economic, Societal, Technological, or Other changes in your space that might lead you to an additional force multiplier.
“When I was CEO of a company involved in the transportation market, a new presidential administration was coming into power,” David explains. “It was changing the dynamics where everything had to be built and bought in America if you’re going to serve the American federal or state-level governments. So we positioned ourselves to make sure that everything we were building was built in America so it could be sold in America. Becoming BABA (Build America Buy America) compliant, we were able to create a massive distance from competition, and the outcome was tremendous.”
3. Avoid Growing Broke
When David was working at Amazon, he heard the familiar complaints from market observers: the company was growing rapidly, but it wasn’t turning any profits. For most companies, that’s a death sentence. But Jeff Bezos had a long-term vision that was BIGGER than selling enough books to get in the black.
“Amazon was making money, but they were plowing it back into their innovation machine for the longer term,” David says. “And what was really critical, Jeff Bezos was very communicative to the investment community about what he was doing and why he was doing it, and making sure that they were not making short-term decisions at the expense of long-term profitability and growth.”
Most importantly, Amazon’s investments in itself and its customers eventually led to a new venture that was profitable: Amazon Web Services. By pouring the money it was making into developing AWS, Amazon created a product that many of its earliest customers didn’t know they wanted yet.
Over time, Amazon identified a formula BIG enough to start a flywheel of profitability spinning: selling more products, which attracted more customers, which increased sales volume, which lowered prices, which attracted more customers, which fueled more innovation that allowed the company to keep growing without running out of money.
“An absolutely critical part of the flywheel for Amazon, and frankly for any flywheel, is it makes enough money to fund innovation that allows them to fuel that momentous turn of the flywheel,” David says. “So with AI today, how many people can we get to use this? And then moving into a business model that was amenable, that would start to generate capital — not to cover everything, but to demonstrate that there is the ability to monetize what we’re doing. And if you can continue to move that forward, at a larger and larger scale, it will become a tipping point, much like what Amazon experienced to become the largest, most successful e-commerce player in the market.”
4. Design Your Playbook
Your force multiplier will get you focused.
Your flywheel will restart your engine.
But to prevent future stagnation your company needs a system that will sustain growth.
CEOs can use David’s four-part framework to create a playbook that will steer you around the next potential stall, see your company more clearly, and keep Making BIG Happen.
- Define the field. “Know where you’re going to play and ultimately where you’re not going to play. Start looking at the pockets of revenue and opportunity that you can chase profitably over time.”
- Determine how to win. “Look at other force multipliers that you might have access to. How do you make money? And not just how much do you charge, but how do you actually create that product or service and bring it to market and at what price point. What’s the business model? What’s the technology angle? Is AI relevant to your customer? What about sales? What about service? How can you differentiate?”
- Understand the capabilities you need. “What is needed to be able to deliver from a core competency perspective? Sometimes this may lead to new innovations that you incubate and drive forward. Sometimes this may lead to an acquisition of technology. Sometimes this will lead you to strike a strategic partnership with a hyper-scaler or some notable 800-pound gorilla.”
- Track, measure, manage, and establish accountability. “The above may all be working well over time. But the most important part of that success is having a system of accountability across your management team, making sure that you are monitoring those metrics. And you don’t do that once a year. Are we meeting daily in urgent situations to talk about really key metrics that we’re trying to move the needle on? Are we meeting weekly as a management team? What about monthly? What are we tracking quarterly? And then how that dovetails into the annual plan.”
Top Takeaways
1. Don’t lag. Numbers trending in the wrong direction won’t turn around by themselves.
2. Don’t invent, innovate. If you’re pouring cash into initiatives that aren’t profitable, you risk growing broke.
3. Don’t wait for the next stall. Work with your executive team and your CEO coach on a plan that will keep your flywheel spinning.
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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