What surprising product has emerged in your business?
“Crisis creates opportunity”
-Bruce Rauner
I recently did a post-COVID audit of my services using my very favorite tool, the Impact/Effort Matrix. It takes just 15 minutes to use and will help you figure out your three biggest near-term growth drivers for your business at this moment. Check out my blog post on the subject to learn more.
I’ll wait. No really.
So many small business owners are taking advantage of the opportunity to regroup and assess their product portfolio!
What things have risen in relevance and resonance with your customers in the past 18 months?
What has become outdated or unnecessary?
Maybe your lead products have shifted, and new, unexpected ones have emerged.
My “big three” are building a retainer business, passive income projects, and virtual facilitation with teams as they reset post-COVID.
Virtual facilitation wasn’t part of my business slate until now. For the first time in history, companies need a little guidance to restart after a global pandemic. Through the COVID chaos, I’ve learned quite a bit about teaching, facilitating, and problem-solving with virtual teams. I believe no learning is wasted, and 2021 has been no exception.
I have a new lead product in my business, but it needs fuel to thrive.
Set out to grow your new portfolio
Which products will take root and grow? The ones you feed.
If you come from the corporate world like me, August is budget season. Over the past months, teams have worked tirelessly to build innovative, well-supported cases for 2022 investment. Budgets are usually driven from the top down by accounting reverse engineering to hit a margin. Or, worse, done in siloes, tallied up, and then followed up with a top-down mandate to “reduce everything by 10%”. I, for one, prefer the approach used by high-growth companies—Zero-based budgeting. Or what I call...
The Hunger Games of budgeting
Zero-based budgeting demands that leaders make a case for each dollar and recommit to a collective investment and growth strategy.
The critical mindset for the team: Assume nothing.
Step 1: Retrospective Reality Check
Functional teams like Marketing, Product, IT - meet in advance to grade last year’s investments with a handful of questions:
Did we prioritize and put our resources to the highest and best use?
Which investments moved us forward toward growth?
Which projects are “walking dead” programs we should divest?
To get ready for the next budget: Start with Zero. This is a clean slate moment.
Step 2: Prepare to Pitch
All teams began with zero budget and were charged to build the best case for investment at this moment in time. Leaders meet with their teams and prep just two things:
A pitch to fuel your core business next year. What is your case to maintain and grow work in flight? Why is this the best use of resources today?
A pitch to fund new growth opportunities. Frame the opportunity, size of the prize, and investment needed. We created a simple template to capture new investment ideas.
Step 3: May the odds be ever in your favor
Let the games begin! The leadership team gathers for a full day (or two) offsite to accomplish the following:
Set ballpark target budget (perhaps driven by the desired margin)
Hear each leader’s pitch for core growth and new opportunity investments
Peers rank and score as the pitches unfold.
Leave the session with an agreed-upon prioritized list of budget must-haves - snap a chalk line - then a ranked list of potential opportunities below the line.
This exercise is a fascinating experiment in human behavior. Through disagreement, debate, and heated negotiation, the team reaches a collective consensus.
Story from the real world: In one fast-growth product company, we did this workshop over a series of several days.
Our sales lead, let’s name her Cato, padded her budget with plenty of extras in anticipation of cuts. Peers saw right through the surplus and called her hand.
Our head of product, we’ll call her Katniss, made a robust case for long-term investment in product innovation and creativity.
Our marketing leader, we’ll call him Peeta, argued to shift investment from lower margin channels to higher-margin ones, making a case that, while small, would drive a 60% margin lift.
In the end, the team chose to double down on the product innovation and the nascent channel. Don’t worry; our sales teams were well funded too!
The magic? The team joined forces to reach an agreement on spending our limited resources to the highest and best use. The result was nothing short of transformative for the company.
Start with Zero for ownership, transparency, and accountability.
Why does it work?
Leaders own the strategy: We sequestered ourselves with the understanding that no one left until we made the tough tradeoffs. Once the doors opened, everyone was united and galvanized around investment strategy.
Providing financial transparency: Financials tend to be the “black box” of organizations, and leaders are afraid to share plans widely. After a FUEL workshop like this one, leaders are empowered to socialize and communicate the tradeoffs - because they were in “the room where it happened.” Each participant can tell the story of choice, foregoing x in support of y.
Personal accountability: If you ask only one question related to funding - ask this one:
“Did we spend the company’s money as if it were our own?”
I see this mindset most prevalently in fast-growing small businesses. Having worked for some world-renowned entrepreneurs - Sara Blakely and Ted Turner - I’ve seen firsthand the impact of this principle. Companies grow to be great with a “treat it like it’s your own” mindset.
Story from the real world: Two people in my career exemplify the “treat it like it’s your own” persona.
The first is Ted Turner. Ted was known for being the billionaire next door. At the height of his power and wealth, he drove a used Ford Taurus. I met him at a lunch event once wearing the same suit he had worn in every other meeting that week.
The second is Mike Lazzo. Mike ran Cartoon Network and was the mastermind behind Adult Swim. He used to drive his car from Atlanta to New York for sales meetings to save the company the travel expense. Even as his status and influence increased, Mike always handled the company resources with care. What stories of “treat it like it’s your own” do you have?
If you or your team are ramping up for the budget season, try our FUEL workshop and let Springboard facilitate your group to fuel growth.