It’s not the flashes of football or laughter and chatter in this busy hotel lobby that are distracting me tonight. It’s a concept, a new metaphor for business, that has been boring through my thoughts, reordering how I view my career: Business is a river. Try it on. It may open new sources of revenue for you.
This metaphor is not my own. My good friend and coach Jody Johnson from ActionCoach introduced me to it recently. I was struggling with a dilemma. One of the leading innovation consulting firms had approached me about working with them and I was starting to wonder, should I continue on my own or join something more established? You’ve probably faced similar quandaries yourself: Should you abandon blazing your uncertain trail and step onto a better-worn path?
Sure, all the leadership books you read tell you that “persistence” is the common trait of anyone who has had a significant impact on the world. But how do you know if you should persist? How do you know you are on the better path?
Jody introduced me to the work of Roger Hamilton, who suggests you think of your business as a garden and your cash flow as a river feeding the garden. To know that your garden will continue to flourish, you want to make sure your river is flowing.
I remember from my college fluid dynamics class that volume of a river’s flow is the function of two things: speed of the water multiplied by the cross-sectional area of the river. To get more flow, then, you need to speed up the water and/or keep the water speed the same by widening the river. If you build a wide, fast-moving river, you can build an empire (think of the Nile and ancient Egypt).
Increasing water speed
Water flows from high points to low. So to get the water to flow more quickly you need to increase the incline of your business. Specifically, this means increasing the relative value of your offering to your competitors'. Every improvement, new feature, innovative characteristic of your product/service is like digging a little deeper than your competition. Customers will naturally gravitate to you.
What I saw for myself was that I have spent nearly 10 years digging. I’ve published four books, facilitated hundreds of strategy sessions, and researched thousands of companies all to dig deeper than others. I may not know much about fishing or employee compensation, but I know strategy at a deeper level than most.
My IP--“The Outthinker Process”--is, for a while at least, more deeply developed than what most others can offer. Every story I incorporate into my speech or case I write makes my process a bit more valuable, digging it deeper. If I stop improving my process now (e.g., by joining a firm), eventually my process will be no better than others’.
I think my strategy is working because I am seeing growing signs that people find it valuable. For example, Harvard Business Review just contacted me out of the blue because a leading consumer products company had attended my workshop two years ago and wants to conduct a proprietary program. One of the largest packaged food companies in the world attended my workshop and wants me to give a speech. I’m increasingly seeing clients who have experienced my IP and now want more.
Ask yourself: Are your customers returning for more? Are they starting to bang on the doors? Is your customer acquisition cost decreasing? If so, you are increasing the slope under your river.
Widen the river
A river coursing down a steep slope produces a lot of pressure, but if it is too narrow its flow is still limited. To open up the Ganges, you want to widen the river. In business terms that means increasing leverage. Create enough products, services, and channels to allow you to serve more clients. If the steepness of your slope allows you to increase your price, the width of your river allows you charge that price more often.
In my case I am seeing the river widening. I have several seminar partners who have been organizing events for me for years, but this year I am adding new channels. I signed deals with a training company and a speakers bureau. Both are ramping up new business quickly. I’m raising capital to launch a digital collaboration tool based on my IP. My “Outthinker Fund,” while still nascent, is potentially close to its first deal.
Ask yourself: What are your channels for getting your product/service to customers, and are they growing?
The challenge for me has been that I like to measure revenue but have lacked the indicators to tell me whether that revenue is growing or not. This metaphor--your revenue as a river--provides a structure to help you see if you are on the right path.
My river’s speed is increasing, as I deepen its value, and its width is growing, as I open up new channels. I think I will stick with this...luckily, it also happens to be what I love.
[Image: Flickr user Claudio Alejandro Mufarrege]