Understanding the principle of anticipating the future helps the business function and move forward, even as times change. This has been Ken’s company’s third guiding principle, what next. He covers various topics to explore why this should be important, from S curves to planned obsolescence. Ken gathers from his own experiences to prove how such a simple question works wonders to better build a company.
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Guiding Principle 3
This is the podcast where I share case study evidence in all different capacities that can help small, medium and large size businesses move forward in topline growth and hopefully bottom-line net profit. I’m in the middle of a four-part series that is both an end of the year wrap-up but also basically a light shining forward of what I call bumper bowling. I want you to picture you walking up to a bowling alley. There’s this big beacon of light on your chest. What you’re doing is you’re shining a light so that your six-year-old, your five-year-old, your four-year-old can go bowling. Not only have fun, knock some pins down in a guaranteed fashion, that’s the key phrase, but the light and slow ball that they throw doesn’t get stuck in a bumper, as is the case quite often with little children.
If you shine a light, they can see. If you put blown-up bumpers in the gutters, that ball will unequivocally get to the end and at least knock a pin down. A lot of businesses run their business with activity. They have rough ideas, rough goals, some direction but they don’t shine a light. They don’t put the bumpers in the gutters. They don’t throw a heavy enough ball. I’m in the middle of a four-part series that are guiding principles that any company of any size can use. The reason I know that is because our company, which is a four-timing 5000 company, started in March of ‘92. As a mature company in our twentieth year, we began to hit the Inc. 5000 list. We began to grow. Now we’re at 100 plus employees.
We found out we hit the list for the fourth time. We missed it the first time, I mentioned this on the last episode. We missed it in 2014 because Kerri and I were out of the country. I forgot to fill out the paperwork. It just so happened to be our fastest growth year, and we would have made it five years in a row. What’s the point of all this preamble? What steers the ship? What undergirds our company? What helps every employee along the way if they can’t reach the manager, Kerri and I? What helps all decisions are the conscious guiding principles of our company. This means these are not posted on somebody’s door. These are spoken of, acknowledged, accepted, and used as rubber bumpers in the gutters of our bowling lanes. They undergird every decision.
The first one I talked about is that we treat our clients as family. I went into some depth of the psychological reasons of why and how. I went into guiding principle number two that you feed the head, or the body starves, and about continuing education, not just for employees but for employees, management, leadership, executives, board of directors. I went into the details of why and somehow.
Now, I am on guiding principle number three. We are in a hard and fast series of end of the year wrap-up meetings that are setting the table for the incoming year. When I was scripting out this podcast, I’m not going to say this one is the most important. If there is one single guiding principle that lends credence to why we’ve hit the list four times out of five years and as a mature company in the last four years, went from nine employees to 102, it would be guiding principle number three. Guiding principle number three says, “What’s next?”
In 1955, the first time they took the Fortune 500 list, put it on paper, and wrote it up in magazines and newspapers, we acknowledge that 439 of those 500 companies that were the biggest, some did billions of dollars. They had the largest management teams. They had the biggest budgets and the biggest marketing departments and most importantly they had the biggest research and development divisions of any company in the world. How come 439 of the 500 are no longer around? I’ve done this talk many times with many people, intimate groups, and big groups from stages. In intimate groups, the knee-jerk reaction is simple. They go, “That’s easy. Maybe the founders didn’t want to leave it to their children. Maybe the products no longer exist. Maybe they were in the buggy whip business and now they’re replaced by cars.”
There are no horse-drawn carriages anymore. These intimate groups think they have the answers. I blow their minds and tell them that, “Wouldn’t it surprise you then that every one of those 439 companies, their actual product sets and the industries they were in are 100% still around,” and it blows their mind. I want to make sure I’m clear. The 80% of those companies that no longer exist, the industry, their competitors, they’re all still around. Some of those companies even got resurrected by other Founders years later. They’re still around. Why did they go out of business? They didn’t understand the principle of what’s next. They didn’t understand the principle of what’s called an S-curve.
My number one downloaded podcast out of what is now 293 published podcasts is episode number one called S-Curves. It’s been downloaded by massive companies, small companies, people writing books. It has been downloaded and emailed me about, “What a podcast.” How many questions have come from that single podcast? There’s a reason. It’s the most important. It was purposely-built. I won an award. I got Author of the Year out of 205 authors in a calendar year. Of 2012 when I wrote simply seven pages as a partner with Brian Tracy in a book, those seven pages got Author of the Year for any single book. Why? It’s the principle of S-curves and how I told about the story of one of the biggest US companies and how it almost went bankrupt. It turned itself around in nineteen months by using this concept of what’s next. S-curves.
S-curves, the principle say this, “What can we do in nights and weekends that doesn’t take any extra physical cost or any extra brain power? What can the equipment we currently own generate nights and weekends? What can the people we have on payroll generate nights and weekends, if we were about to go out of business and our current product line was failing and we knew it was going to fail within six months?” It’s called planned obsolescence. What if you knew unequivocally you had proof and evidence that none of your competitors knew. It was your product, your industry, your widget, your tool. I used to own a chain of video stores in the VHS industry. I used to rent VHS tapes. They got replaced by DVDs. They got replaced by Redbox. They get replaced by direct streaming media. Now, they’re all replaced by the Netflix of the world, the Hulus the world, the everything of the world.
What if we finally swallowed the pill and accepted that the actual product itself is going to shift severely like VHS to DVD to direct stream, where I wasn’t able to see the shift? The product is still there. People still watch movies on Wednesday night. People still make microwave popcorn, go on a date and watch a movie at somebody’s apartment building. I didn’t understand the delivery mechanism my product was shifting.
The question you have to ask annually, and it is the most serious question of the four guiding principles, is what’s next? Here’s where this gets interesting. It’s mind-bending that I can even say it, prove it and show it. We have never in seven years gone more than 24 months selling the same product. We’ve hit the Inc. 5000 list four times in five years selling three completely different products. How is that possible?The product is still there but it’s shifting. Click To Tweet
These are three completely different products. The same market, same rough concept, but a totally different product. We are good every December asking ourselves, “What’s next? What’s new? What’s better? What are we missing? What are we blind to? What do our competitors see that we don’t see? Does that make sense? What product are you selling right now? What product are your competitor’s way about to shelf and replace?”
It could be the same exact concept, but it’s a different delivery mechanism. It’s a little bit better. Guiding principle number three is, “What’s next? What S-curve are we going to stack on top of our current S-curve?” If you don’t understand that concept or that term, I beg you to not listen to the next podcast and go to episode number one, start there and then come back to episode 297. Guiding principle number three, What’s Next? I hope this helps.
- S-Curves – previous episode