Cycle Theory is an idea that’s been around for a very long time. It’s a pretty straightforward concept that applies to many aspects of life, and a way that humans have made sense of the universe for millennia. In fact, we’ve been talking about cycles for thousands of years. The pre-Columbian Mayan calendar was based on cycles, the Hindu belief in reincarnation is a cycle that extends beyond this world, and the ancient Chinese believed [...]
If you have a company that’s had two massive transition points—first a Tornado and then an Avalanche—you have two options. First, you may have to sell. Even worse, of course, you could simply go under, with nothing to show for all of your hard work. Your best alternative, though, is to follow the path of Devon Energy. In a previous blog, I told the story of Devon Energy: Having survived their Avalanche, merged with a [...]
When your company’s been through the punishing rounds of the Business Storm Cycle – from the high-growth Tornado where sales are climbing so fast you can’t keep up, to the Avalanche of high inventory and shrinking margins that follow – how you deal with the consolidation phase that follows can mean life or death for your enterprise. Make the wrong choices, and you may not survive the next cycle. Make the right ones, and you’ll [...]
Business owner, do these complaints sound familiar to you? Why is productivity down? Why are margins falling when revenue is soaring? My back office just can't keep up or give me good data It seems like my technology team is always fighting fires If so, it’s likely that you are going through one of the transitional phases of the Business Storm Cycle. Whether that’s the rapid growth phase of the Tornado, where sales are suddenly [...]
Tornados – those hypergrowth phases of high sales revenues and low cash flow – can sneak up on you. You don’t realize one is there until your company is whirling around your ears, and you’re right in the midst of it. That drastic percentage of increase in revenue is what causes a Tornado. The front office goes crazy, while the back office gets more and more lost, trying to figure out what to do with [...]
I’ve talked about surviving the Tornado; that wild hypergrowth phase that blasts your company up to the sky, then just as rapidly drops it back to earth. But what does a Tornado phase look like when you’re in it? Let’s follow one company’s wild ride. Wind-farm company, Headwind Energy, had tripled in revenue size in a matter of months. The company doubled in size in people and quadrupled expected profit. During these months, their people [...]
Who’s more likely to survive a powerful storm: The person who prepares for what’s coming, and has a plan in place to deal with the likely outcome or the one who didn’t bother to check the weather report that day? The answer’s pretty obvious, but it’s amazing how many otherwise smart and forward-thinking individuals in leadership fail to prepare (and thus prepare to fail) for the predictable phases of the Business Storm Cycle ahead of [...]
You’re caught up in the Business Storm Cycle – and though you may not have heard its name, you’re certainly aware of its impact. Maybe you’re caught up in the Tornado, that hypergrowth phase where sales are exploding and you’re running as fast as you can to keep up. Or perhaps you’re stuck in the Avalanche, watching your margins shrink as your growth declines. Or you might be in the doldrums of the consolidation phase, [...]
How often have you tried to economize by fixing something yourself, only to be forced to call in an expert to fix not only what was broken, but your subsequent “repair” as well? Let’s face it; experts in nearly any field are in demand for a reason – and the reason is they know what they’re doing, and they do it much better and faster than non-experts can. I wouldn’t hire the guy who cuts [...]
What do you do when the weather report warns of an impending large-scale storm? You hit the hardware store for flashlights, batteries and candles, nail sheets of plywood over your windows, and make sure your storm cellar is ready for occupation. You buy gas for the generator if you have one, and you line up with your neighbors for milk and bread at the supermarket. In other words, you prepare. You may not be able [...]