Will Your Company be Good 2 Late?

Some people say we should sell to the Fortune 500.  Screw that, we want to sell to the Fortune 5,000,000.  Jason Fried, Founder 37 Signals, from his book Rework

I read the Jim Collins classic Good to Great three times and discussed it with a group of talented business people once per week for over a year.  I was baptized in the gospel of the Hedgehog, the Level 5 Leader and the 3 Circles.  I know the statistics of what the heralded 15oo did right in order to sustain growth and market leadership for so many years.

Since then I’ve learned another stat.  Each of those card carrying G2G behemoths employ over 5000 people; which sounds immensely impressive until you consider that companies that employ over 5k employ over 2.9% of our workforce.  It’s fascinating to consider how Walgreen improved themselves with a new competitive advantage via their online experience, but Walgreen didn’t invent their innovation.  It’s compelling to learn how Wells Fargo forged its way through economic swings, but Fargo didn’t GoFar when it came to creating enough jobs to move the needle on our country’s unemployment rate.

Collins focused on the successful Fortune 500 size institutions to surface the diamonds of insight of what they did right. But what of the real innovators in our economy?  What of the companies that generate millions upon millions of our jobs, even though over 9 out of 10 of them fail?   What can we do to prevent these courageous Founders and their fledgling ventures from being Good 2 Late?

For example, a large percentage of emerging business fail because they literally die on the vine of their own growth.  Economy Heroes of these essential ventures need a plausible path to answer an essential question:  Will my company make money at higher volumes? This company found out it couldn’t:

The Inc. Investment Indicator enables a company to measure the return it generates on capital – both physical and personnel. Most emerging companies don’t consider the financial impact of an executive hire on their risk level.  Employees impact ROI on capital as much as a lease or hardware purchase.  This company is already moving dangerously close to capital collapse; and even though they have the opportunity to scale their business, capital constraints will prevent them from doing so.

I love this scene from The Natural where Robert Redford describes a huge mistake he could have avoided:

Entrepreneurs rarely see IT coming; and that IT is No Man’s Land.  It’s the chasm of the inevitable transitions that a company must hurdle in order to scale the business.  If CEOs and their leadership teams can sync on the right priorities and prepare for No Man’s Land, they are less likely to step on the same landmines of those who were Good 2 Late.