Crossing No Man’s Land

  • Introduction Fewer than two percent of all companies in the United States ever grow to more than $25 million in annual sales. That means that 98 percent never break through the glass ceiling of being a “small” company.In the growth and development of every business, certain critical points demand dramatic, transformational change in order to break through to a sustainable and profitable size. Understanding this pattern and being able to identify the points in time at which radical change is required for the business to grow are essential leadership skills. Yet the vast majority of business owners and leaders cannot make the changes, and thus will never grow beyond $25 million.This period of time and revenue growth between $25 million and $100 million-plus is called “No Man’s Land.”
  • Small Versus Big Consider these distinctions between a $25M and a $100M company. For the majority of small companies ($25M or less in annual revenue):
  • Market is “niche market.” You have carved out a limited, specific market by product, geography, service offering or some other characteristic.
  • Sales approach is “avoidance.” You sell below the radar and avoid selling head-to-head against much larger national firms and industry leaders.
  • Value proposition is “better.” In contrast to your competitors, you demonstrate an incrementally better set of benefits in your offering to customers.As companies close in on $100M in size, these characteristics change significantly. For larger companies:
  • Market is “broad market.” You sell a complete, integrated solution to large clients.
  • Sales approach is “confrontation.” You must face other large competitors head-on in price, integrated solution, technology, service, innovation and other criteria.
  • Value proposition is “completeness.” You are expected to provide a complete solution at a very price-competitive rate.Industries, markets and firms can differ, and these breakpoint revenue amounts are only guidelines. However, if your company continues to grow, you will reach the edge of No Man’s Land. When you do, you will need to make transformational changes.
  • Living on the Edge How will you know when you’ve reached the edge of No Man’s Land? Look for these warning signs:
  • Red flags. Bigger players are moving into your niche and perhaps claiming your niche.
  • Thunder without rain. You are swamped by what seem to be new RFP’s. You’ve made your way onto the list of qualified companies who bid out large business, but you remain too small to win.
  • New faces. You are finding new competitors, smaller, lesser-known firms, in the opportunities that you are pursuing.
  • Bobbing in the ocean. Annual revenues go up and down like a buoy over several years. You perceive a ceiling of revenue amount that you cannot break through.
  • Trading places. Your company is losing large accounts at a rate similar to the rate it adds new ones.The edge of No Man’s Land puts you at significant risk. You’re becoming too big to hide, yet you still feel too small to fight. To continue to grow, you must add larger accounts than when you were smaller. Yet, this need for larger accounts pushes you into the marketplace of the larger competitors, who can be very aggressive in terms of how they deal with smaller, up-and-coming firms. In addition to brand, they also command superior resources and technology, and have a broader service base and, often, price advantages.If you aspire to become much larger, you must cross No Man’s Land as quickly as possible in order to minimize your vulnerability.
  • Thar She Blows! Upon entering No Man’s Land, there are four options for speedy travel. The first three include:
  • Acquisition or merger. Buy, merge, or be bought in order to achieve size, capital and leverage.
  • New products. Bet the farm on the introduction of a new product/service for rapid growth.
  • New markets. Rapidly expand into markets in which you have little presence with the expectation of high sales volume.These three options pose several formidable challenges. First, they require a substantial financial investment. Second, they represent a significant distraction from your current client base. Third, based upon business statistics they have a low probability of success.The fourth option? Whale hunting.Whale hunting is the “organized and process-driven effort to scout, hunt and harvest very large accounts.” This approach provides multiple advantages over the other three. Specifically, whale hunting:
  • Uses your current resources rather than undertaking an enormous increase in expense.
  • Creates a process and implementation methodology that will sustain the business after it has reached its initial growth targets.
  • Incorporates predictability and measurement into the achievement of goals throughout the growth process.
  • Ensures scalability so that as you grow, you do not need to re-invent the “success magic.” Rather, your processes are designed to anticipate and accommodate growth.
  • Preparing the Hunt. Before embarking on whale hunting, it is critical to:
  • Fathom your new waters. You are now in a new world of opportunity. You will be competing against companies much bigger than you, and yet you will still have your old competitors as well. To win, you must learn how to beat the big competitors.
  • Focus on understanding. This is not the time to dramatically shift markets. At the edge of No Man’s Land you are probably in the right market. However, you have the wrong message and inferior process to deliver it in order to win.
  • Fashion formal sales processes and measurement. Being in new waters requires a much more scientific approach to determine what the data of the marketplace is telling you. The key is to develop your process for approaching the new, larger opportunities, and then make certain that you measure your success in each of the steps of your new approach.Whale hunting isn’t easy, and you can’t build a whale-hunting culture into your business overnight. Yet, whale hunting is not a parable or a fairy tale. It is the true story of how people of indomitable spirit set out with rudimentary tools and technologies to capture the largest mammal on earth in order to ensure that their village survived and thrived.Like the Inuit, you can undertake a systematic, well-managed, yet rapid journey across No Man’s Land. When this process is clearly understood and embraced throughout your company, it will yield extraordinary outcomes.                                                                                                                                                                                                                                                Vistage speaker Tom Searcy is founder of Whale Hunters, a sales process and business development company based in Indianapolis.

Leave a Reply

Your email address will not be published. Required fields are marked *