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October 20, 2022

This summer my dad nearly died. At first we thought he was just tired – and the ER near where we were staying in Maine had no answers. Two days later, his lungs were filling with fluid, so we drove to Boston – where he stayed for five days. Then ten days more in another hospital when we got home.

After he was released from the hospital he was still on oxygen and getting out of bed was difficult. I was an (unqualified) nurse for weeks.

It was over two months of not being able to focus on my businesses before he was better.

Imagine that, almost three weeks where I could have only the bare minimum of meetings, and couldn’t do any “hands-on” work myself. I had to rely on the people and systems I had in place beforehand.

Here are six reasons the wheels didn’t come off the bus:

Communication:
All my companies are run using asynchronous communication. Nobody needs to be available at the same time in order to make progress.

This is in stark contrast to most companies – where meetings (endless meetings) are the norm. But is that really the best way?

Your best time to get things done might not be the same as for other team members. When you can set the company up to move projects forward with the fewest meetings possible, the entire organization not only gets more resilient to absence – but productivity goes up.

What did this mean for me? If I needed to be at the hospital, I didn’t feel any guilt about missed meetings.

Decisionmaking:
I live on a “1000 year flood plain”. In other words, most things just run unless there’s a very rare occurrence. Instead of me being the bottleneck (remember, the neck of a bottle is at the top – the CEO), I only need to be in the loop when something is mission critical.

Everything else can run on parameters I’ve set. I’ve empowered the team to make decisions without me being in the way. So if a lawsuit comes in (hope not) or something of that magnitude, yes – I’m pulled in. But I don’t have to be for most anything else.

Do I get involved normally? Yes – to grow faster. But I don’t need to.

Automation:
there’s a ton automated (machine and human automation) so it runs on rails. Importantly – the automations also flag the team when something is out of bounds.

The key is not just to automate “what happens” – but also to automate notifying when something isn’t on track. So it’s MORE than just the process being automated. It’s alerts to know when things humans do go off track.

When I was gone, I knew everything was running on time and on track – because I wasn’t hearing anything from those alerts.

Dashboards:
I know what’s going on by looking at just a few Google Sheets and custom-coded dashboards. Advertising, marketing, sales, delivery – I can pull up the information without interrupting the team.

Here’s a goal for you: can you run your company on nothing more than your cell phone? Looking at a few reports, giving (asynchronous) guidance to the team, then logging out?

Revenue Model:
This one saved my bacon. It’ll save yours too. Recurring revenue means that even if sales went to zero (it didn’t), I’d have months and months of runway.

Never (ever) underestimate how awesome that is. If you don’t have a recurring revenue offer, find a way to add it. You can add recurring revenue to any business – I’ve done it in dozens. Do it, now.

Advertising Model:
We use paid media to acquire customers. $X goes in, Y clients come out. It took months of testing to get there, but when the process to do this is nailed down it’s a thing of beauty.

Once you have advertising down this way, it’s an asset of the company. Something an acquiror would pay a lot for. And something you’ll appreciate every day. Ask yourself – if some competitor in your space has figured out how to make advertising work for them reliably, why can’t you?

Dad had a hard summer. He’s on the mend, slowly. And I’ll admit, my eyes were off the ball for longer than I’d have liked. BUT this I can say, hoping you can do the same – I had nearly three months of my absence and the companies kept ticking along.

How long would yours last? And what are you going to do to absence-proof it?

Discover a weekly list of short, actionable steps to get out of operational deadlock, build a self-managing team, grow strategically, and increase company value in the Boardroom Bulletin™.

My business lost a major contract, so I cut the headcount of my company in half. It wasn’t a good start to that year.

Even after the cuts, I thought we might not make it.

I made some quick changes, and the opposite happened – we were more profitable and started to grow faster than before. Here’s why:

The contract we lost was almost half our monthly revenue. Everyone in the company knew, and gave them ‘all hands on deck’ service. Even when that customer made unreasonable demands: insane deadlines, pulling me in, second-guessing the team, and renegotiating price down every quarter.

Then they had a management change. New management had “their guys” that they brought in. It happens a lot (and you should plan for it, if you’re a vendor). But I wasn’t as prepared as I should be.

And just like that, we were out. They didn’t have the courtesy of even calling me, let alone a meeting. They sent a breakup email.

I’m sitting there stunned reading the three-sentence message. Wondering what the (BLEEP!) I’m going to tell the team whose livelihoods depended on this account.

I had no idea this would be the best thing for the company in the long run.

We helped team members we let go find new positions as best we could. That cut the company down to breakeven. We weren’t losing money – but not making any, either.

Yay, no salary for me (again).

Next – figuring out how to support our remaining clients with a demoralized team. That was trickier, because they all had lost friends to the layoff. Each one was wondering if the company would survive, or whether they would be next.

The key to solving it?

Doubling down on process.

We’d spent so much time delivering for the Big Client (and their unreasonable, out of left field demands) that we spent no time making delivery better. We realized that we’d been ignoring some far more profitable smaller accounts.

And I asked a critical question – how could we revise everything to support far more smaller, but more profitable, customers? (Have you analyzed your customer base?)

We made a two month plan to refactor how we delivered. I doubled down on marketing and sales – which I could do, now that I wasn’t being pulled into delivery.

Do you know what we found in just a couple of weeks?

That we could deliver for clients with 20% fewer labor hours, and more reliable results, with better process.

It just required that we take the time to do things differently. Time we didn’t have with the Big Bad Client monopolizing every spare hour. We went to work doing what we should have all along:

  • Document the process (the right way)
  • Communicate differently, both internally and with customers
  • Lean on automation more to reduce manual labor on the team and increase reliability of delivery for the customer
  • Analyze who should be doing what

The 20% decrease in workload let us take on new clients. Which drove higher profitability.

Within seven months we were more profitable than before. AND I wasn’t pulled into anything. AND the team wasn’t second-guessed by a bully client.

This was early in my career. I came up with some rules that I’ve held to since:

  • The first is never let a single customer become a material part of revenue.
  • The second is the point of this article – don’t scale before you’ve optimized delivery, because-

Stuff’s gonna break
Your team’s gonna break
The company’s gonna break
You’re gonna break

OK, so how do you apply this in your company? It depends on what you’re delivering, your labor mix, and a few other important factors. The important part isn’t what I did, in my situation with my team and my customers.

The point is the thought process you go through to fix the problem.

Step back to first principles: is a small number of customers risking your company’s revenue? Are they preventing you from doing a better job for higher-margin customers?

Start by asking those questions – and go from there.

Discover a weekly list of short, actionable steps to get out of operational deadlock, build a self-managing team, grow strategically, and increase company value in the Boardroom Bulletin™.

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