My friend, Jeb Bell — follow him on Twitter at @gladspuck — forwarded an article from the New York Times’ “You’re the Boss” column that I found both fascinating and instructive on why so many professionals and their organizations fail to create distinction in their marketplace.
Titled, “How Can Jimmy Beans Wool Get Its Growth Back on Track?” the post examines an online yarn and fabric retailer with a brick-and-mortar store in Reno, Nevada named, obviously, Jimmy Beans Wool. The article states, “Founded in 2002 by Laura and Doug Zander, the company began as a small storefront yarn shop and developed a loyal following online through its creative use of social media, most notably YouTube videos. From 2007 to 2012, sales grew organically at an annual rate of as much as 50 percent. They topped $7 million in 2013.”
- Remember that for a moment: by developing a “loyal following” through a focus on what made them distinctive, they were growing as much as 50% a year. I’ve watched a couple of the YouTube videos — they’re homespun and tightly centered on information and insight to help people who knit, crochet, and loom.
Trouble was on the horizon, however, as the story from NYT continues: “About two years ago, Ms. Zander began to think bigger. ‘Everyone in the business community was saying we could be a $100 million business,’ she said. That became her goal. Toward that end, she implemented numerous growth strategies. But sales fell flat, and, in subsequent months, dropped further. The Zanders stopped taking salaries, started paying employees out of their personal savings account and rethought their growth plans.”
- OK — analyze that last statement a bit more thoroughly: “Everyone in the business community was saying we could be a $100 million business,” Ms. Zander declares. And, therein lies what I believe to be the problem.
The rest of the article has various consultants spouting the typical crap about what they think should be done next — from cost cutting ideas to expanding their number of retail locations. Some of them, on the other hand, are quite insightful.
However, here is what I think is the central issue: Somewhere along the way — after listening to those described as “everyone in the business community” — the PURPOSE of Jimmy Beans Wool moved from being “a distinctive company to serve knitters and crocheters” and turned into “we want to become a $100 million company.”
When the very PURPOSE of your business moves from “creating distinction (in part through the Ultimate Customer Experience ®)” into “becoming a company that sells $X worth of our stuff,” my bet is that you will achieve neither your financial goals nor marketplace distinction.
Can you become a $100 million company that sells yarn? I don’t know. However, my bet is for that to happen, you have to worry more about serving knitters than you do about the size of business that you want to become.
- And, what was so wrong with organic growth of 50% per year?
What if you maintain that pace? 7 million becomes 10.5; which becomes 15.75; which becomes 23.625; which becomes 35.4375…get the picture? Notice: maintaining and enhancing her distinction moves the growth upward…however, the “growth strategies” that were employed have almost tanked her business.
If you’ve followed this blog, heard any of my speeches, or read my latest book, you already know that I strongly believe: Creating distinction is THE business growth strategy.
Does it mean that Jimmy Beans Wool would’ve ended up a $100 million company? No…it does NOT guarantee that.
But…wouldn’t you prefer to be the distinctive, highly-profitable, most-desirable resource in your marketplace — as opposed to a business where you can’t take a salary and have to pay your employees from your personal savings?
So…what’s the purpose of YOUR business? And, what’s YOUR purpose in it?