Your business is many things. It’s a team of grade-A pros you’ve assembled to execute at the highest level. It’s a group of employees on the ground floor who take pride in hitting their marks. It’s a customer base that wants what you’re selling and feels like they’re part of the story your brand is telling. And it’s you, the CEO: your vision, your passion, your ability to inspire, create, innovate, and grow your business.
But at the center of all these moving parts is one key economic driver. That driver could be a number. It could be a percentage. It could be a rating. It could be a ratio.
Whatever it is, your key driver is bigger than any spreadsheet or scoreboard. It’s the one thing that you should be focusing on relentlessly. If you do this one thing well, and if it passes the following 3-point checklist, it will drive the growth and profitability of your business.
1. Your economic driver is what you’re best at.
In his book “Good to Great,” Jim Collins says that every company is either a hedgehog or a fox. Foxes look good, act smart, and tend to chase after every shiny thing that they see. These kinds of companies are too distracted by things that don’t matter to ever figure out what really does matter.
Hedgehog companies are the ones that get BIG. They’re single-minded in their devotion to one thing at which they know they can excel. To quote Jim:
“A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at. The distinction is absolutely crucial.”
Struggling businesses are often cluttered, clinging to outdated products or practices, chasing after the next big thing just because that’s what everyone else is doing, hesitant to change because they think what they’re doing is a working.
Hedgehogs know better. They don’t keep doing things because that’s how mom and dad ran the business. They don’t let what’s trendy distract them from their core visions and values. And they don’t keep doing things they’re just OK at.
If you want to get great, then you can’t stop at good. Pour all the resources you’re wasting on good into the things you’re great at.
2. Your driver has to be actionable and measurable.
You’re the CEO because you have a clear vision for what you want your company to be and what you want to achieve.
But struggling CEOs often confuse that vision with their economic driver. They think that just having a company is proof that the company is working. Vision is one thing, but if your head is too far up in the clouds, your company is never going to be more than a pipe dream.
Example: you make a big investment in branding and marketing. Your new logo is cool, your new web page is snazzy, and your videos light up social media.
Congratulations. Now tell me: how is all that razzle-dazzle translating into more business?
Big-picture vision is essential, but it’s only step one in getting your company from where you are to where you want to be. The key economic driver that is going to get you to that next level is specific, actionable, and measurable. I don’t care if your new marketing campaign looks good on a t-shirt. I care how those t-shirts are translating into more sales. I care about how many email clicks it takes to turn a prospect into a customer.
Our most successful clients are obsessive about tracking how their key economic drivers grow their businesses. For example, TaskUs determined that its clearest path to BIG was growing a passionate base of employees who loved where they worked. So they give their global workforce quarterly surveys and host radically transparent townhall meetings. TaskUs has been so responsive to employee feedback that their employee net promoter scores rival some of the biggest names in business.
3. Your economic driver has to keep growing.
What happens when a company hits its targets?
At a mediocre company, complacency. These CEOs see the same sales figures as last year, the same customer retention rates as last quarter, and they think, “Good enough! Let’s keep doing what we’re doing.”
Of course, “good enough” never is. Moreover anything you’re tracking that flatlines after you hit your first target isn’t driving your business anywhere. You need to keep improving your numbers, keep experimenting with new ways to do things, and then do more of what’s working and cut what’s not.
Jim Collins says that CEOs should think about their businesses like they’re giant flywheels mounted on an axle. You don’t get that flywheel to turn all at once. It takes a bunch of little pushes – that is, a bunch of smaller targets hit, surpassed, and hit time and time again. At some point, one more little push leads to a BIG breakthrough, and the flywheel is spinning on its own. For example, a high employee net promoter score attracts new top talent. Negative churn in a SaaS business keeps revenue growing. And a relentless focus on reducing price attracts more business, which leads to greater economies of scale, and more opportunity to keep lowering prices.
In other words, focusing on your key economic driver won’t just make BIG happen. It will KEEP making BIG happen until your dream business is a reality.
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make Big Happen. His firm coaches over 170 of the world’s top high-growth entrepreneurs and CEO’s from over 20 countries on how to dramatically grow their revenues and profits, implement the most effective strategies, becoming better leaders, grow their people, build accountability systems, and elevate their own performance. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.
About CEO Coaching International
CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 350 CEOs and entrepreneurs in more than 20 different countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from $10 million to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for four years or more have experienced an average revenue CAGR of 40.1% during their time as a client, more than four times the national average. Additionally, clients have averaged 210% growth in profit while working with the firm. For more information, please visit: https://www.ceocoachinginternational.com