From Startup To Success

AUGUST 2011Predictable SuccessGetting Your Organization on the Growth Track—and Keeping It Thereby Les McKeownHitting Your StrideFrom Startup to SuccessQUICK OVERVIEWAlthough Predictable Success addresses the structure of medium- to large-scalebusinesses, it offers a wealth of insight to solo entrepreneurs and small-businessowners. Every business, regardless of size, moves through common phases of growthand, potentially, of decline. Author Les McKeown identifies the dangers of each stageand the opportunities for growth that each one presents.This summary of Predictable Success focuses on the growth stages—Early Struggle,Fun and Whitewater—and ends with Predictable Success. However, the book alsooffers advice on what to do if your business slides into the treadmill stage (in whichthere is a lot of action but minimal return), the big rut (in which creativity is replacedwith routine), and the death rattle (in which businesses struggle to resuscitate lostcreativity and momentum).Greenleaf Book Group Press 2010, Les McKeownISBN: 9781608320318220 pages, 19.95SUCCESS PointsFrom this book you will:APPLY AND ACHIEVEAchieving and maintaining Predictable Success requires a constant balancebetween flexibility and systems. Processes can help a business operate smoothly.They can even keep it moving when the owner isn’t in the office. But a dependenceon systems can lead to stale practices. Instead of fresh ideas, it’s tempting to slipinto doing things the way they’ve always been done.To reinvigorate the creativity in your business, McKeown suggests promotingsabbaticals, shadowing and job swaps. If you’re an independent business owner,the idea of a sabbatical may seem like a pipedream, but shadowing someone for afew days or going to a few of their appointments or meetings may give you a freshperspective on how to run your business. Who do you admire in your industry?Who is experiencing sustainable, successful results? Ask that person if you can sitin as a guest in a couple of their meetings or spend an afternoon at their office.Watch what they do, note what systems they use to make their business runsmoothly. Then go back to your own office and figure out how to adapt those bestpractices to your business.Page1SUCCESS.com Learn the seven stages ofbusiness Identify what stage yourbusiness is in Learn how to move fromthe stage you’re in intoPredictable Success Begin identifying theprocesses you need forconsistent resultsSUCCESS BOOK SUMMARIES

Predictable SuccessPredictable success is a state reachable by any groupof people—any organization, business, division,department, project, or team—in which they willconsistently (and with relative ease) achieve theircommon goals.Managing an organization that is in any state other thanPredictable Success is a trial of nerves: The organizationmay or may not be successful (you can’t tell with anycertainty in advance), and even when it is successful, it’shard to tell why or to “capture” that success so that it canbe repeated.PREDICTABLE SUCCESSAS A NATURAL STAGEIN ORGANIZATIONALDEVELOPMENTPredictable Success is one of the seven stages of growthand decline through which every organization progresses.Not every organization makes it all the way through allseven stages—some organizations stop at one or morestages; some make it to one stage, then drop back to theprevious stage or stages; and some organizations die at acertain stage.Predictable Success is the apex of the growth curve. Thethree stages before Predictable Success (Early Struggle,Fun and Whitewater) are growth stages. The stages afterPredictable Success (Treadmill, The Big Rut and DeathRattle) are decline stages.There are three important things to note about thegrowth cycle:Page21. Organizations cannot “jump” a stage.2. Organizations can move back as well as forward in thegrowth cycle.3. It is possible for an organization to remain in PredictableSuccess indefi nitely.By implementing the right strategies, any organization,division, department, group or team can undergo a processof continuous rejuvenation, allowing it to stay in PredictableSuccess and not decline either back into Whitewater orforward into Treadmill.THE EARLY STRUGGLE—OVERCOMING GRAVITYNo matter how a new venture is launched, no matter whatpreparations you make or how much you think you’ve learnedfrom “the last time,” the fi rst stage in every new venture is afight to achieve liftoff. I gave it a name: Early Struggle.I discovered that while Early Struggle is never exactly thesame for each new venture, because every new business hasits own unique set of variables—the skills, knowledge andexperience of the founding entrepreneurs, how establishedthe product and market is, and how much cash there is tostart with, for example. I learned that while the intensity andduration of Early Struggle can vary greatly, one thing is sure:The stage itself is unavoidable. As I was to fi nd out (and asyou will see later in this book), just like every other stage onthe road to Predictable Success, you can’t detour past EarlyStruggle or skip over it—the only thing you can do is tominimize the time you spend there.Early Struggle brings with it an equally simple but starkconsequence: If your business fails in this, it will die.The reason is pretty straightforward: There is no other option.If a business hits problems in any other stage of PredictableSuccess, it can always retrace its steps back to an earlier stage indevelopment, regroup and prepare for another push. However,unlike the later stages on the path to Predictable Success, inEarly Struggle there are no previous stages—so there’s nowhereto go backward to. Only by facing—and overcoming—thechallenge of Early Struggle can a new venture survive, moveforward to its next stage of development and advance towardPredictable Success. The option to return to an earlier stage andregroup does not exist. The option is binary: up or out.SUCCESS.comSUCCESS BOOK SUMMARIES

Predictable SuccessHow to Get Out of Early StruggleAs we’ve seen, in Early Struggle your key goal is simple—getout of it, as fast as possible. There are three key steps to gettingout of Early Struggle:1. Maximize your access to external funding.My rule of thumb for years has been this: Whatever yourbusiness plan says you need, triple it. When you’re struggling tofind any money at all to launch your new venture, it may soundglib, even flip, to hear me casually say, “Triple it”—certainlywhen I was launching my first businesses thirty years ago, Iwould have sneered at such a suggestion. But forty-plus start-upslater, I know what I’m going up against in Early Struggle—and Iknow what’s needed to come out the other side.Remember that statistic on failure during Early Struggle—80 percent. Many of those businesses failed simply because theywere underfunded to begin with.2. Minimize the path to a viable market.One of the most important reasons for securing ready accessto external funding is simply so that you can focus on somethingmuch more important: finding a viable market.Believe it or not, a lot of businesses never make it out of EarlyStruggle because they concentrate too much on raising capital.It’s important to remember that while raising external cash is agood and important exercise, it’s not your ultimate goal—yourultimate goal is viability—and in Early Struggle that meansfocusing laser-like on finding a viable market for your goodsand services.Practically speaking, this means doing four things: Prioritize. Getting closer to finding (and gaining tractionwith) a profitable market for your product or service shouldbe your number one priority at all times. Listen. The vast majority of new businesses jump intolife in fully formed “transmit” mode. They barge into themarketplace like a boorish first date, talking incessantlyabout themselves, who they are, what they do and theirvalue proposition, barely taking a breath, certainl and fi nding a market to selling, pure and simple. It’snot that cash flow becomes unimportant—it’s simply that inFun, the business is making sales at such a rate, and has suchrelatively low costs, that the cash flow seems to look after itself.As for finding a market—the market has been identified duringEarly Struggle, so in Fun, the focus is all about mining the market.The newly energized organization seemingly can’t help but findPage4customers and converts, and the business grows rapidly: Fun isalmost always accompanied by fast, customer-led growth.Growth brings with it complexity. The simple, transparent,turn-on-a-dime business that employed only ten people in theearly days of Fun grows, fi rst to twenty-five, then fi fty, thenone hundred people. Now there are layers of management.Communication slows down. Inaccuracies begin to happen.The boss can no longer see—let alone instantly fi x—everythingthat is happening. And one day, the unthinkable happens: Acustomer is let down.And at that point, everything begins—very slowly—to feeldifferent. Gently at first, but discernibly, instead of the relativelysmooth sailing that has been Fun so far, the business begins torock a little from side to side. More things begin to go wrong.More mistakes are made. People begin to grab the sides. Profitsslide. Water starts to lap over into the boat. And before you knowit, without even trying, you’ve been kicked out of Fun.Like it or not, you’ve just hit Whitewater.WHAT WHITEWATER ISWhitewater is the third stage of growth for every organization,after Early Struggle and Fun.Whitewater occurs as a natural outgrowth from Fun—inother words, an organization doesn’t have to do anythingspecific to get into Whitewater—once it reaches the Funstage, so long as the organization continues to grow, it will hitWhitewater automatically.Of course, larger organizations with systems and processes inplace find this complexity easier to cope with—the whole purposeof systems and processes is to enable an organization to dealeffectively with complexity. The problem is, our young growingorganization doesn’t have many—if any—processes or systems. It’son the way up, and so far, it hasn’t needed any systems or processes;in fact, it sees them as a bad thing: “Hey—we’re flexible and we canturn on a dime. We don’t have titles, or job descriptions, or rules orsystems or processes—they’d just get in our way.”As a result, the Whitewater stage—painful as it is—is oftenmore prolonged than it needs to be, because senior management’snatural reaction is to reject the very thing that is needed toget through Whitewater: systems and processes. The logic issimple and compelling: Because systems and processes haveuntil now been anathema (“We’re young, vibrant and creativelySUCCESS.comSUCCESS BOOK SUMMARIES