When I started sailing I learned an important concept called “sea room.” One definition of sea room is “an unobstructed space at sea adequate for maneuvering a ship.” Another definition is “the space required by a vessel between its path and the shore or an obstacle.” Why is this important? Well, when a storm shows up, you better have enough maneuverable space to prevent hitting the rocks and sinking your boat. If you are a pilot, the same concept applies, but instead of sea room, it is about air space and runway. If you’re in a dive, you better have enough airspace to pull up to prevent you from crashing and burning. Likewise, if you are attempting to take off you better have a sufficient runway to build the velocity necessary for takeoff, or again, you are likely to crash.
Unfortunately, this analogy is strikingly relevant to business. If CEOs or company owners experience a negative turn in their business results, they will naturally start to take corrective action. If the changes they make do not turn around their results quickly, and they have limited sea room or runway, they are likely to run out of time, and either hit the rocks or crash and burn. Sometimes the executive team is too close to the issues or has unexamined, self-imposed assumptions that limit their possibilities. When this is the case, in my experience, the best course of action is to bring in an outside set of eyes to work with the team to assess the current situation and revise the strategy and/or operations in order to turn around their results quickly.
A Company is a System
I look at a company as a system that is perfectly designed to produce the results it is producing. If I don’t like the results, I have to change the design. Since we cannot intervene in a world, we cannot see, having an outside set of eyes looking at the design can make a critical difference in the results a CEO can produce.
Let me give you a real-world example of a company turnaround I did. The owners had previously built and sold a very successful company. They took some of their proceeds to launch what they thought would be an even more successful venture. They grew this company to $7M, but with continuing losses during the process. They just couldn’t get enough forward momentum to take off. In this case, they did ask for help, but with very little runway left. They hired me as CEO, hoping I could help keep them from crashing.
I took the assignment because the company was in an emerging, growing market, but lacked a winning strategy in the face of stronger competitors, higher product cost and technology disadvantages. With these disadvantages, we all knew we had to find a different source of competitive advantage.
The Power of a New Set of Eyes
The new set of eyes that I brought to the company augmented the executive team, and together we saw a powerful strategy that enabled the company to grow profitably. Within two years of implementing the new business strategy, the company was transformed from a failing $7M company to a prospering $19M company.
We were still the high-price bidder and did not offer the best technology, but had found a completely different path to success. Think about it. This was the same company, with the same products and channels, but with a new strategy. New eyes enabled the Team to devise this new direction.
Bring In a New Set of Eyes
At $19M, we stalled and I was facing a loss without immediate corrective action. I took some short-term actions to remain profitable. The more important decision I made was to engage someone immediately to take a look at our strategy and determine what we were missing. I needed a new set of eyes. After three months, that person, using the same data known by me and my executive team, suggested a strategic shift in our product/marketing approach. This new set of eyes, interpreted the same data we had differently, challenged our assumptions and offered one idea that produced a dramatic shift in results. The company went from a stalled $19M to $23M to $27M to $34M based on this one shift in strategy.
What did it take to do this? It took the humility to ask for help and the wisdom to both take the advice, then hire the advisor to give us the bandwidth to implement the shift in strategy while the executive team attended to the business of operating the business during this strategic transition.