I believe in aggregate marginal gains. So I started to look for what I call “1% ideas” - the idea being that if you improve at something by 1% every day, after 70 days you’re twice as good.
Now don’t get me wrong, I appreciate that it is actually very difficult to improve at something by 1% and even harder to improve at something by 1% a day. Take language for example. The average person knows somewhere between 10,000 and 30,000 words. Even at the low end, a 1% improvement means learning 100 new words. You try learning 100 new words and see how far you get. Now try that every day…
So in my eyes a 1% idea is really just a way of looking for the things that can help me improve - a skill, a tactic, a mindset - anything really. Here are some of the 1% ideas I've found over the last month or so that specifically pertain to growth strategy, sales and marketing.
1% - this graph
This graph represents the effectiveness of a specific marketing strategy (success) against the length of time it has been around (popularity/time).
Think about it. When print advertising was pretty new, all you had to do was stick a glossy ad in a magazine and you were all but guaranteed a return (it worked for black pearls when combined with an outrageous price tag). Same with Google AdWords 10 years ago. Now, with so many players fighting for the same strategy, you need to make a decent investment to make money. This is a problem for smaller businesses as they need to find channels, or at least strategies within those channels, that aren’t overrun by the horde.
There isn’t an easy fix unfortunately, but at the very least, thinking about this graph when looking at marketing channels and then trying to figure out how you can escape from the horde, would be a start. Do something creative and put the effort in. My particular favourite example of this in recent times is the following “ launch strategy” by Zack Kanter and the team at Leanflix:
In case you are wondering, @pmarca is Marc Andreesen. He helpfully retweeted to all 500k followers:
It’s nothing too brilliant, but it’s different enough to actually get some traction - which is the whole point.
2% - Views from Martin Sorrell
In a wide ranging interview with HBR, Martin Sorrell talked about what a parent company can (and needs to) do in order to justify its existence. It was framed as “turning a portfolio of companies into a growth machine”, but I think justifying existence is a better way of thinking about it. Basically, WPP grows largely by acquisition. They leverage their size to buy smaller agencies/companies and make 1+1 > 2. That’s their growth strategy in a nutshell. In order for that to be successful though, they have to ensure that the whole is greater than the sum of the parts - otherwise there is no justification for an acquisition, the parts can just get on on their own.
Here are then, the four main areas where he believes WPP adds value across the portfolio and makes 1+1 > 2.
3% - Instead of trying to spot someone lying, focus on prevention (courtesy of Leslie John)
People are terrible at spotting liars (even though we probably think we are great). We are even worse when a lie is cloaked in flattery (or worse, conforms to our pre-existing assumptions). This isn’t great in a negotiation. So instead of trying to spot a lie, focus on developing ways to make lying difficult. You can achieve this using the following five strategies:
4% - Think about the opposite of a business strategy - if it’s stupid, it means the original strategy will probably fail (courtesy of Roger L. Martin)
I’ve seen it a few times over the years - a “strategy” that isn’t a strategy at all. For example, a global wealth management business decided that its “strategy” was:
“To target wealthy individuals who wanted and were willing to pay for comprehensive wealth management services, by providing great customer service across their wealth management needs”.
Great, so your plan is to be a wealth management business.
Maybe this one is a bit obvious, but there is a great way to check to be sure. Ask yourself “if I make the opposite choice, will I look stupid?” If so, then you have made a poor strategic choice in most markets.
Let’s take a look at this one in its opposite form:
“To target poor individuals who don’t want and aren’t willing to pay for comprehensive wealth management services, by providing poor customer service”.
This looks pretty stupid to me. So by fulfilling the original strategy, you haven’t really made a strategic decision, you can’t distinguish yourself from competitors and the strategy itself will probably fail. A better strategy might be "...to sell only managed funds to individuals with a net worth between X and Y and a history of investment in <insert fields here>". At least then you've made an actual decision. The opposite of this strategy probably makes sense as well - you may even have competitors doing it and doing it well.
5% - This picture (courtesy of Ramzi Yakob)
When I first saw this, I liked it A LOT. I like it even more now, but it needs a little explaining so stay with me.
Businesses grow in three ways:
The first two "ways of growing a business", what I called "increase usage" and "increase price" drive the third "service more needs".
Let's take a look at how.
At its heart, a business exists to meet a need. Crudely, you know when the business is successful because the product/service that has been created to meet that need is being used. So stage 1 of growing a business is building something useful that is used (and thus meets a need).
Then, you can get on to stage 2 - making money and data. Usage of your product generates cash. But it also generates data. Both are important.
Money is important because you can pay yourself and others, which means you can do more, you can reinvest, you can take more risks. You can afford to service more needs.
Data, specifically proprietary data, is also important. This is what creates competitive advantage and enables you to optimise and create new features/services/products/businesses. No-one else has the data that you have about your customers.
So money and data enable step 3 - making decisions about what new needs to service:
So why is this a 1% solution? Because it nicely distills a solid growth principle - sustainable growth is only achieved by servicing more needs, but to achieve this you need to be generating both money and data. Both are crucial (not just money, not just data).
Increasing price creates more money and increasing usage generates more data, both of which enable you to make strategic decisions. This helps you to figure out what to do next, specifically how can you meet more needs and ultimately grow your business.
If you found this useful, please do sign up to our newsletter - you'll get an easy to digest version of this post every month or so with the top five or so "1% improvements". Any questions or queries, please add them to the comments or reach out to me directly via email (email@example.com) or Twitter (@siamac).