Doug DavidoffThis book review originally appeared in Baltimore and Washington SmartCEO Magazine June 2010 issue.
The toughest lesson I’ve ever learned about business, or any performance-related issue, is that often times a clear sign of progress is encountering new struggles. From my work with hundreds of small and mid-market businesses all around North America, I know I’m not alone here.
Now, thanks to Les McKeown and his new book Predictable Success: Getting Your Organization on the Growth Track – And Keeping It There, I finally understand just why this is true, and, more importantly, what I need to do about it. McKeown is a highly intriguing person to be writing a book such as a Predictable Success. An accountant by training, a bit of a serial entrepreneur by habit, and an advisor to mid-market companies as a profession, McKeown may be one of the few people who have seen as many businesses from the “backstage” as I have.
Predictable Success is best explained by a comment Jeff Immelt, Chairman and CEO of General Electric, made about his company, “When you put your foot on the gas in this company, it goes forward.” Every business owner or senior executive that I’ve ever met understands just how simple this sounds, and just how difficult it is to achieve.
McKeown shares his experience in both running organizations and advising others. McKeown introduces one of the most valuable constructs I’ve seen in business in recent years. He describes the life cycle a business goes through as defined stages:
Early Struggle: Defined as the time where a business struggles to:
- Making sure there is enough cash to keep you going.
- Clearly establishing that there is a sustainable market for your product or service.
The business mortality rate is, obviously, very high.
Fun: You’ve got the cash and the customers to keep you going. Business seems to become effortless. You’re close to your customers, your staff is excited, you’re “kicking butt and taking names.” Life is fast paced and exciting here. As the owner, you finally feel “successful.” The exclusive focus here is sales, because sales is profit.
Whitewater: You hit a wall. The very success that made everything so much fun in the previous stage sets the seeds for “Whitewater.” Suddenly, everything becomes complicated. You often feel like you’ve fallen backward as the focus, once again, goes from sales to profits.
You need to put systems in place here, but getting those systems to work is far more difficult than you could ever have imagined. “The organization seems to be going through an identity crisis, and you may even be doubting your leadership and management skills.”
Predictable Success: Simply put, you set goals and objectives with a predictable degree of success. “You know why you are successful, and you can use that information to sustain growth in the long-term.”
Treadmill: While there is no reason that a business can’t stay at Predictable Success, the reality is that most will decline over time, as their systems and processes become emphasized too much. Creativity and risk-taking wane as “the organization becomes increasingly formulaic and arthritic.”
The Big Rut: If creativity and risk-taking aren’t re-injected in the business the organization enters, well, The Big Rut.
Death Rattle: Bureaucracy takes hold and the business dies.
There are two key rules for how the Predictable Success Model works:
- First, a business must progress through each stage – no stage can be skipped. That doesn’t mean that you have to spend a lot of time at each stage, but you cannot skip any.
- Second, with the exception of “Early Struggle”, a business can advance or regress one stage at a time. At “Early Struggle”, there is no regression.
I have to admit that when I first read that you can’t skip stages, I was quite disappointed. As I read the book I was intent on proving that McKeown was wrong, that if you knew enough going in you could skip the stages you didn’t want to go through. After reading Predictable Success I’ve realized just how important each stage is, and not only can you not skip a stage, the attempt to skip it is potentially fatal.
I’ve spent most of my life working with businesses that find themselves on the left side of McKeown’s Predictable Success Model. I’ve found that most small and mid-market business owners make the deadly mistake of confusing the “Fun” stage with success. Then when they hit “Whitewater” they react as if they were regressing rather than progressing. From there, a series of errors are made and the business finds itself resembling the “Early Struggle” phase and a vicious circle ensues.
Those of you who take this recommendation and get Predictable Success will know what to do about it.