Self-Delusional Business Growth Models III

Dec 3, 2010

(Third in a series of three) There are a number of business growth models that – to put it simply – don’t work. Within this group, there is an especially dangerous sub-set: business growth models that not only don’t work, they’re actually self-delusional – as in, they lull the executive team into thinking they have a working model that’s likely to succeed, when they in fact have quite the opposite – a growth model that’s broken.

Here’s self-delusional business growth model #3 (#1 is here, and #2 is here):

3. Using placeholders to disguise absence.

Ever read (or heard someone say) something like this:

We’ll secure 25 new clients for product x (or service y, or activity z) in the next year. That will net us $4.1m in new revenues.

See that placeholder: ’25 new clients or customers’? Here’s the question: Who are they?

If you know precisely who they are (or are likely to be), and have listed them out, great, you get 8 out of 10 (you still have to actually convert them next year – you get ’10 out of 10′ then).

If you don’t know who they are exactly, but you have a pool of real, identified, qualified candidates from which they will come, Okaaaay…better than nothing, 6 out of 10.

If you don’t have a pool of real, identified, qualified candidates but you do have a rock-solid, no-arguments, this-is-invariably-the-way-it-always-works, non-subjective, externally validated set of statistics that show how to move an already existing group of clients through a sales funnel to reach next year’s sales goals…meh. 4 out of 10. (Your vaunted statistics are just an average of everything that’s gone before. You take a dive this year and your statistical conversion rate goes down – and your growth target is a bust.)

If you don’t have any of this, but you do have a great marketing and sales plan to make it happen, 2 out of 10. (The validity of your marketing and sales plan is utterly unknown until it meets reality – next year.)

If you have none of the above – just a hopeful placeholder based on… um… common sense, 0 out of 10 – you’re deluding yourself.

(Well, not you. You’re not likely to commit this cardinal error. I mean the other people reading this.)