Over the last few months I have been working with lots of small, ambitious companies looking to raise money to fuel their growth.
Whilst with a one such company yesterday, refining their business plan ahead of a funding pitch, the team descended into fits of giggles.
The reason for the laughter was that most of the targets we agreed were critical to the success of the company over the next few months would fall to the same team member, who was slowly sinking into her chair as our discussion progressed.
In essence the outcome of one or two key activities would largely determine the company’s growth.
And so it often seems to be. Whilst all (or most anyway) of the things a company must do to run itself well are important, the ultimate success of a venture may come down to a small number of activities, events, or decisions.
The funding application.
The customer pitch.
Overcoming a critical engineering or coding obstacle.
Dealing with a major customer’s problem quickly.
It is at these margins that you can win big, or opportunities can slip away.
Even in larger companies this can be true. When I worked in a FTSE 250 business our growth each year was often down to the outcome of one or two major tenders.
One contract we won was equivalent to nearly 10% growth for our company in a single year. From an organisation of over 60,000 employees how many of us were working on closing the deal every day for four months?
Huge pressure, huge opportunity, huge risk.
Binary outcomes like this can determine whether a business grows or not, whether a year’s results are good or bad, whether bonuses are paid or not, whether investors are happy or not.
Whether people keep their jobs - or not.
The better you understand where these margins of success are in your organisation - and the critical activities they depend upon - the more able you are to empower the right people to maximise the chances of the best outcome. The better you can see where a little extra investment can deliver a huge return. The better you can see who might be under the most pressure, and who might need support to deliver their best.
Never mind the 80/20 rule, at times it can be 99/1.