Article previously published in Arkansas Money & Politics
For most of us, speed is sexy. We love it! We are exhilarated by it. We love how it makes us feel when we experience it, and we are in awe of it when we observe it. The 100-meter dash and downhill skiing in the Olympics, a 100+ mph fastball, NASCAR and Formula One auto racing: we can’t get enough of it.
Speed is also highly regarded in business. The speed at which a new product is developed, the rapid rise of a company stock price, the speed at which a startup company gains traction and raises money. All of these examples show up on the front page of our news feed.
As thrilling as pure speed may be, if not accompanied by some level of control and direction, it can be destructive, if not fatal. Imagine coming into turn number three at Daytona Speedway. Daytona is considered one of the most dangerous racing tracks in the world. Folks in the industry say it “eats cars”. Drivers can reach speeds of 200 mph on the backstretch at Daytona. Without the banked design of the track and the ability to downshift the vehicle coming into the turn, the cars would literally fly off the track. Once I was on the back of a motorcycle with a distant relative when I was a teenager (clearly, I had impaired judgement). When the speedometer went over 100 mph on the freeway, I stopped looking at it. All I could think of was how many bags it would take to collect all my body parts if the driver lost control.
Olympic downhill skiers routinely hit speeds of 70-80 mph on tracks with slopes of 45 degrees or more. For reference, a black diamond slope at a commercial ski resort is typically around 40 degrees. At a 50 degree slope you can reach down and touch the snow with your hands at your side. A 100 degree slope is free fall. Terminal velocity for a human in free fall is 118 mph. I have taken the wrong trail a few times and ended up on black diamond slopes and tried to ski down. I needed a diaper for two reasons. One of those reasons was that I spent most of my descent on my butt and needed the extra padding. No comment on the other reason. Needless to say, without controls such as snowbanks, netting and other safety elements built into the track design, as well as the skier’s ability to use the edge of their skis to control speed and direction, there would be far more serious falls and deaths in the sport.
Speed to market, speed to capture market share, speed to a liquidity event, speed to $10m in revenue. How fast we go as business owners gets us positive attention, puts us on the front page and feeds our ego. Speed is sexy in business too! Many of us want it. We crave it!
Humans are constantly pushing boundaries. It’s what we do. It is not unusual for our ability to increase speed or create a new technology initially exceeds our ability to actually control it. However, this is not the case with business.
Here is the challenge: as in life, too much speed without an appropriate level of control or direction can be destructive and fatal in business. Unlike technology, the techniques and tools for controlling our business already exist. Values, documented processes and procedures, financial and people management strategies are all tools to give our businesses the proper level of control and direction. We just have to commit to integrating them into our business and use them.
There is also the issue of balance. Too much and we stifle our growth potential. Too little and we crash and burn. Startup companies live on the edge of growing so fast that they outrun their cash, the fuel for their growth. They typically care less about profit and more about month-over-month revenue growth, and customer acquisition accelerating at the speed of sound. They need just enough control and direction to keep them from imploding. I always describe a rocket launch as a controlled explosion. That’s what a startup is. It needs just enough control and direction to get into orbit. This is also true of any company experiencing rapid growth. Without the proper use of controls and direction, they can outrun their cash flow, end up with an inconsistent and inefficient sales process, poor customer service, or unsafe working conditions. All of which can undermine growth or even kill the company.
In mathematics, speed (r or rate) measures the distance traveled (d) over the change in time (Δt), represented by the equation r = d/Δt. In business, the formula translates to r + cd = Rapid Healthy Growth, where cd = Control and Direction. Just follow the formula.