I just finished “Ready, Fire, Aim” by Michael Masterson and found something that speaks to our experience at FiveFour.
I’ll tell you what that is in a minute. First some background.
The book started as a retreat. Masterson is a serial entrepreneur and he led the retreat for other entrepreneurs.
He wanted to impart the lessons he had learned from a 30-year career starting and running several multimillion-dollar businesses. Later developed and expanded it as a book. The subtitle states his objective; teaching the reader to take a business from “Zero to $100 Million in No Time Flat.”
The out-of-order title represents one of the two biggest ideas in the book: The importance of action.
Taking action is a familiar concept at FiveFour. We talk about it all the time, whether it’s Grant Cardone’s “massive action” or Walt Disney’s “grow wings on the way down.” Then there’s one of my favorites: Eighty percent and shipped is better than 100 percent and stuck in your head.
The other major point is that there are four distinct stages of life for a company as it grows from nothing to $100 million in annual revenue.
That’s where I got very interested.
According to Masterson, each of the four stages of a business has different problems, challenges, and opportunities which require different skills from the entrepreneur running the company. The stages are:
- Infancy (Up to $1 million in revenue)
- Childhood ($1 million to $10 million)
- Adolescence ($10 million to $50 million)
- Adulthood ($50 million to $100 million and beyond)
The stage that was the most interesting to me is adolescence. Many of the challenges we solve for business leaders at FiveFour are at this level. A new set of challenges always emerge when a company grows to around $10 million.
At this size, there is at least one or two levels of management between the founder/CEO and the front-line workers who engage with the company’s customers. Those employees do not have the benefit that existed in the first two phases of business growth: Proximity to the founder/CEO.
Companies that reach $10 million in revenue usually do so because the founder/CEO built a culture around taking care of the customer. With multiple levels of management, they no longer talk directly to every employee and are unable to directly impart their culture and expectations of how the customer should be cared for.
This usually shows through disgruntled customers.
Masterson writes: “The most important disconnect has to do with the priority you had established to make sure every customer would be handled with the utmost of care and consideration.”
The business needs a transformation. A transformation from focusing almost exclusively on customer acquisition to one that now focuses equally on customer retention. Masterson calls it customer service, but were he writing today rather than the mid-2000’s, he would likely recognize that the customer experience is even more important.
The leader accomplishes this transformation by a focus on operations and training, communicating the vision, joint ventures and hiring stars and superstars. He’s dead-on with that list.
It’s impressive the degree to which organizations have traits and characteristics. I reminded of that every time I run across a book or concept from 20, 50 or even 2,000 years ago that we see play out in our daily business lives.