Author: Ed Reid, Managing Director of TAB (UK)
You don’t need me to tell you that things are going to be different.
As I start writing this week’s post it’s just been announced that ‘non-essential shops’ will re-open from June 15th, along with a host of other businesses. But plenty of businesses that are a cornerstone of both work and social life – restaurants, pubs, hotels – will remain closed.
Gradually, many members of TAB UK are going their businesses back up to full speed. But we’re all going back to a world of work that will be very different. As I’ve written previously, millions of people who previously thought that going into the office was essential have discovered that, well… It’s not. That they can get just as much done at home and that their quality of life – and quality of relationships – has improved significantly.
Understandably, thousands of business owners are suddenly wondering if they really need to pay for that expensive office space. Why pay for it when people can get just as much done at home? And when commuting capacity is going to be severely reduced.
So there are going to be some huge changes – which is why this week I want to talk about two things that will never change.
I thought I’d reached the age where I’d seen every motivational poster going. I thought I’d never see one to compete with Nike’s Just Do It for simple, concise effectiveness. (And if you want to feel old, Just Do It was coined in 1988.)
But then the other day I saw this poster. The simplicity is stunning.
1.01 to the power of 365 = 37.8
0.99 to the power of 365 = 0.03
If you improve or get better results by just 1% every day versus going backwards by just 1% every day…
Every single day? OK, I’ll allow you the weekends off…
1.01 to the power of 250 = 12.03
0.99 to the power of 250 = 0.08
If you improve – or if your business improves – by just 1% a day, then you’ll be 12 times as effective by the end of the year. If you go back by just 1% every day then there’s very little left by the end of the year.
Isn’t that poster, in two simple lines, the essential message of the Alternative Board? Isn’t that what we’re all trying to help each other achieve?
One of the great joys of having written this blog is being able to look back over so much material. One of the great truths is that the fundamentals never change.
In July 2012 I wrote a post called Two Wheels Good. It’s that poster put into action – and it’s still true today:
I think there’s an interesting piece of Team Sky/Brailsford [Dave Brailsford, appointed Performance Director of British Cycling in 2003] philosophy that has important lessons for anyone running a small business. It’s Brailsford’s commitment to ‘aggregating small gains.’
This first came out at Beijing [the Beijing Olympics of 2008] where the British cycling team looked for small gains in every area of their performance – and when these small gains were aggregated they made a significant difference.
Maybe it doesn’t make much difference if you reduce the average time someone takes to pay an invoice from 40 days to 38. It doesn’t make much difference if you shave 1% off the cost of your purchases, or if you fractionally increase your prices without losing any sales. But taken together measures like these will really impact the bottom line
Well, I might word it slightly differently eight years on but, as I’ve written above, the fundamental truth remains unchanged.
The ‘new normal’ – and did any phrase ever become a cliché more quickly – will mean we’re all going to face new and different competition. The current crisis will – I am absolutely certain – speed up the pace of technological change.
New companies will find new ways to bring new products to new markets. But one of the markets they target may well be the one you operate in. So aggregating small gains – and doing it consistently and remorselessly – will be more important than ever. Big change will make small changes more important.
That’s why the fundamentals of TAB will continue to apply as well. Yes, we’ll sit round the table – or on Zoom – helping each other navigate the new world, but we’ll also need to remember the basics. The very basics…
‘We’ve survived a pandemic, the pace of change is going to get even faster and you’re telling us we still need to remember the KPIs, Ed?’
Yes, I am. Marginal gains may have first come to the fore in 2008, whereas KPIs were probably first identified in a Florentine counting house in the 14th Century. But in whatever world lies in front of us, those two fundamentals are going to be equally important in building or re-building your business.