Room to Succeed
It has been said that the biggest gains in a business occur the most infrequently. Most people think this is because real opportunities come along infrequently. But I think it is simply because the things you do often take time to compound before they can pay off. If you have enough room for error in parts of your strategy to withstand hardship in the other parts of your strategy, this compounding effect can be allowed to happen. When it works, it can appear to others like great timing, brave bets or even incredible luck. What it really was, however, was room to succeed.
Having this room is why some companies succeed when others fail.
In your planning, do you build-in room or give yourself latitude to deal with uncertainties? Do you defend that room once you have it? It’s harder than it sounds and we don't talk about this enough. I think it's because presenting "room for error" can be misconstrued by your audience as a hedge. A hedge that makes you look like you are unsure of your ability to execute or unwilling to take risks. This is the wrong of course. In fact, building adequate leeway into your strategy (when done right) provides quite the opposite; it acknowledges the gestalt (if you will) in attaining a stated goal: By viewing your strategy as more than simply a collection of individual assumptions and making allowances for the unseen forces acting for and against you - you can materially increase your chances of success.
Most people think about this in terms of having adequate capital. And often times, it comes down that. However, if you are raising that capital from investors, it might be hard to explain that you need 50% more to cover errors or to simply stay in the game long enough for things to compound. Some investors might even find it advantageous to let you trip and only then decide if they want to insert more coins to keep playing. A more controllable way to generate room is to ruthlessly minimize the number of things you are trying to simultaneously execute. To do this you must decide what your organization needs to be really good at to win; and then place only those bets. And if new things come up along the way that you can't ignore, you need to decide what you are willing to drop to maintain that room. We all want to do more and go faster and not everyone will understand your rational, so this principle can be harder to implement than it sounds. Perhaps the easiest way to provide yourself with room for error is to proactively not tolerate issues or inefficiencies capable of dragging on the organization. I'm talking about day-to-day issues that tend to quietly compound and ultimately consume the leeway you need when things get tough. The list of possible things is long and familiar to most leaders: creeping tech debt, accounts receivable turnover, employees in the wrong job, poor work culture, misaligned metrics, customer churn, spongy product positioning etc. We let these things slide every day for a number of good sounding reasons. What we don't see is how they compound and consume our precious room for error; ultimately killing us before the finish line.
You have a goal and there is a probability of success you will achieve that goal. While this probability is properly unknowable, everything you do will either increase the probability or will eat away at your chances that things line up the way you need them to. Maintaining room for error increases your probability and reduces the reliance on unnatural acts and long shots. I find talking about money, priorities and the things we can't tolerate in terms of these additions and subtractions to our success probability is helpful. Most of all, it removes the stigma associated with wanting room in the first place. This is true when dealing with the team, the board or the investors.
THE DISCUS THROWER (DISCOBOLUS) – 460-450 BC
The original sculpture was created by Myron, a Greek athletic sculptor that worked mainly with bronze. The subject is shown on the verge of releasing the discus, and the potential energy in his pose is easy to see. However, there is no strain shown in the muscles.
