Growth by Subtraction

I’m in the growth business. Along the way, I’ve learned a little secret to growth that most entrepreneurs overlook or simply ignore.

It’s the difference between sustained, sane growth, and the frustrating stall that most businesses experience—what I call “survivor businesses.”

The secret is this…

Growth spawns complexity.

Actually, that’s not quite right.

Both the desire for growth and growth itself, spawn complexity.

As you step up to the plate and say “I want to grow my business” you begin to ask “how.” “How” leads to new ideas, new systems, new structures to create and support the growth you desire.

For virtually all of the service firm owners I’ve worked with, growth is both desired and feared.

Desired for obvious reasons: Why start a business unless you intend to grow it?

Feared, because for these firm owners growth means more work and more complexity for them personally. That’s how you end up being the first person to show up in the morning and the last to leave. The one always holding the bag.

The Complexity Problem

Complexity is a drag on your business. It eats resources—time, money, people, energy. The more complex your business becomes, the more difficult it is to react to change, the more expensive it is to manage, and the less fun it is to own.

I’ve watched one of our clients struggle with this for five years. It’s gotten so complex that it’s almost impossible now to unravel it all.

A previously simple business slowly got complex by adding this, then that, and then some more.

Every individual thing seemed like a “plus plus”…and advantage at the time.

However, the key discernment that must accompany addition, never happened.

There was never any meaningful subtraction.

You can get to a point where the weight of continually adding stuff—systems, offers, tools, services—to your business can crush it.

Sustainable growth that optimizes for both profit and for entrepreneurial happiness requires you to continually shed complexity.

The Path to More Goes Through Less

I grappled with this for two years. We had multiple online courses we sold, a consulting practice, and a couple of whale clients for whom we were their problem-solver-in-chief. Or, more accurately, I was their problem-solver-in-chief.

Because we basically had three businesses in one, we also had to have three marketing and sales processes and three delivery systems.

It was a confusing and tangled mess.

And for a year, growth stalled, and I couldn’t figure out why.

Thankfully, I had the good sense to question why we were doing all of those things and not making progress.

Then it hit me.

We were dabbling…

A little of this, a little of that…good at all, not great at any.

So I started subtracting.

How to Decide What to Subtract

When you’re feeling the strain of complexity, the big challenge is figuring out what to subtract to simplify things. You’re changing tires on the bus, while it’s moving. One wrong move and you might crash.

I’ve found that this has less to do with hard numerical analysis and more to do with honestly answering three questions (in this order):

1. What do you enjoy?

In any business where you’re both the owner/investor and an active manager of the firm, I think this is the most important question. I don’t necessarily mean “what’s your passion”, although it may align with your answer.

This is more practical.

What do you enjoy doing in the business? For me, that boiled down to three things:

  1. Developing new ideas and communicating them (doing that now…check!).
  2. Creating relationships that build the business.
  3. Developing new strategies for our clients and seeing them win.

Back when I did this, it took about two hours sitting at a coffee shop, mind mapping the business before I uncovered these three things. And, in hindsight, the times I’ve had great joy in the business and experienced flow, are when I’m spending most of my time in these three areas.

Yours will be different, but the exercise is invaluable.

Why start with this question? As I said at the beginning, sustainable growth requires that you optimize for both entrepreneurial happiness and profit.

2. Where’s the value?

Now let’s figure out, of all the things you’re doing, what creates the highest value—for your clients and for you (profit).

Of all the services you currently offer do one or two drive the biggest results for clients, and the most profit for you?

Or, as we discovered in our case, is there a service you can add (in place of current offerings) that gives clients even better results, and is more profitable for you.

3. Where’s the leverage?

Finally, taking the first two answers into account. Where can you apply leverage to the thing that delivers value (without reducing the value) so you’re freed up to spend your time on the activities in the business that you enjoy.

There are three ways to think about leverage:

  1. What systems and technologies can we apply?
  2. Who has the capability we need to create leverage—by hiring an employee or an expert firm.
  3. Who can we develop a collaboration partnership with, where we both grow together?

Technology is the sexiest, but often brings more complexity with it. My favorite example—marketing automation. A great tool for sure, but I’ve seen so many businesses add it, then quickly grind to a crawl as they try to swallow a giant bite of added complexity (usually without any real strategy for how to market themselves…they just hope the new tool will solve the problem).

The point is to find the simplest possible technology solution to solve TODAY’s leverage challenge. By the time you get to tomorrow, the challenge will have changed. The more complex the tool, the harder it is to implement and the harder it is to pull out and replace.

The fastest and usually the simplest answer is to go hire someone who’s already solved the problem. They’ll bring the systems, technology, and people to you so you can gain the capability instantly.

The most complex, but sometimes the most promising answer to leverage is to find a collaboration partner. In my first business, we partnered with another firm to win a multi-year, multi-seven-figure contract that neither firm could have won alone.

What You Gain from Simplicity on the Far Side of Complexity

Now having been through this cycle of growth, complexity, subtraction, new growth several times here’s what I’ve seen come from it…

  1. You’ll get more clients, that get greater value from what you do, are more profitable for you, while simplifying your operations.
  2. You’ll free up yourself from activities you don’t like doing. This is not a trivial thing, or a luxury. I believe it’s a fundamental requirement for sustained growth over time.
  3. You’ll have a more “friction-free” experience of running the business. Friction kills momentum. Flow creates a flywheel.

If you look at your own business, how will you answer the three questions?

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