Set Point Shift: How to Create Explosive Growth
BY Tom Searcy
Lessons from my diet: Use these 5 steps to move your company past a plateau and on to the next 'set point.'
image courtesy of flickr user ZeRo`SKiLL
I dropped about 20 pounds last spring–and in doing so, changed my weight "set point" to 175 pounds. That means that my body–metabolism, habits and choices–adjusted to a "new normal" that was easier to maintain than it had been to attain.
Like the body's systems, businesses also develop along a series of set points and set point changes. At each set point, the organization adjusts its pace, people, processes, measures and systems–first to get to the new set point, and then to sustain that set point.
My brother likes to say, "Companies are perfectly designed to achieve their current outcomes." If you don't like your outcomes, you need to redesign. A great first step in the process is to establish your organization's target "set point." Some organizations refer to this as the next level. What I like about the set point idea is that it says we can define in measures of speed, volume, scale and margin what our next new normal should be.
Want your business to find a new set point? Here's a road map to follow.
1. Define your new set point–by size, pace, volume, accounts, etc. For most companies, you can calculate a new set point by doubling your current growth rate. But that's just a guideline. What you are really trying to achieve is a new business operating level that requires measurable improvement across your operating and sales organizations.
2. Pick your set point timing. Entrepreneurs don't usually have the attention span for a sustained effort. So aim to achieve the new set point in less than 12 months–the shorter the change cycle, the better for you.
3. Determine and execute needed changes. In one of the businesses that I ran, we had a set-point change that required speeding up a new facility ramp-up: A seven-month plan got shaved down to 30 days. It took very hard work in planning, vendor sourcing, staffing and other disciplines–but changing that set point for our business transformed our growth curve. Executing the changes was painful but all future steps became remarkably easier.
4. Set a different change tempo. To lose weight, I needed dramatic changes to my diet, exercise regimen, water intake and rest cycles. Most likely, you will also need some drastic measures to change your set point. But now that I am at the new level, I don't need the same level of dramatic life change to stay put.
5. Rinse and repeat. Expect a stair-step pattern: Reset your set points, attain them and then start the process again. So prepare yourself to revisit this cycle.