Hey, happy Monday!
I feel a little guilty for bringing you here with a lure, not even one of the best I admit… But I did it for the sake of getting down from the surface of things to the inner core, the warmer, denser core, of the matter.
First, however, I want to show you these two images.
The first comes from ChiefMarTech by Scott Brinker. It is the superinfographic, now dated April 2020, that maps more than 8,000 marketing tools.
The second comes from SmartSellingTools who did the same thing for sales-related software. Here it is.
You don’t need to tap to enlarge them and read the names. There are too many of them. The industry has literally exploded. How do you choose the right one? You can’t-if you don’t know what to do.
So what is the best strategy tool in the world?
The one that, if used skillfully, can grow your business twice as fast as it is today?
It is none of those in the previous pictures.
It is the spreadsheet. The spreadsheet.
It has always been there in your computer, or in the cloud, ready to visualize, manipulate and project the most important thing in any business challenge. The numbers.
You can buy in Saas the glitziest version of anything…
But the spreadsheet has one record above all: it is the first ever No-Code tool.
The one that allows you to prototype the operating model of any initiative and see if the numbers “stand up.”
Use it in reverse
In 1990 Rita McGrath and Ian MacMillan intercepted a recurring pattern in a series of large managerial failures: it is incredibly common for large product launches in the marketplace to become the perfect recipe for failure.
All these debacles have one thing in common: failure to check, as we went along during project execution, and before each investment, that there were really conditions to materialize the numbers in the business plans.
The result is a process for managing innovation that has been named Discovery Driven Planning.
Essentially it is based on three basic pillars.
- The need to quickly generate and validate a large number of ideas
- The ability, even for large organizations, to behave like a start-up and to define in advance that these numbers actually exist in the real world before starting to develop even a brick of the new project
- The replacement of the milestones with checkpoints to transform the initial hypotheses as quickly as possible with the facts that gradually emerge from the experiments.
The process is described in detail in this book Discovery-Driven Growth and it is no secret that the Lean Startup of Eric Ries has been profoundly influenced by it.
The simplest and at the same time most useful tool you can steal now, and implement obviously in a spreadsheet, is the Reverse Income Statement, basically the reverse income statement.
The purpose is to reconstruct the economics in reverse, starting with the definitions of success in terms of expected sales and margins and working our way down through the composition of these numbers to figure out how many units of product need to be sold and how much it would cost to do so … but more importantly, what conditions need to be in place to make the plan feasible.
Each line thus becomes an experiment that is allows you to shift the weights on the scales of assumptions to facts by investing only what you cannot lose while avoiding making dangerous bets.
Three questions for the week
- What are the biggest problems for your clients in your field?
- Are you working on a solution? If not, why?
- What are the numbers you need to find out to materialize the turnover that justifies a good return on investment?
I would really like to know what you are creating.
Be heard
👋
