The Six States of Existence in Business Growth

I’m writing about this today because it’s been a hot topic in conversations with both long-term and new clients recently. I know I’ve made many decisions in my business career that broke the formulas listed below… and I know it cost me dearly.

This info is really valuable for a couple of reasons. First of all, it will help you to categorise where your business is at right now. More importantly, every state of existence has a set of rules to follow in order to support development to the next state.

You could call each state a condition of business growth, and the what to do in that state is called the formula. You’ll see a series of graphs below that give a visual to each state. It helps to look at it from the bottom up, so if we list them like this: Power, Affluence, Normal Operation, Emergency, Danger, Non-Existence.

Non-Existence

Every business starts in Non-Existence.

The formula for the Non-Existence condition is to make yourself known, find out what is required or wanted, and deliver whatever that is.  This is how businesses are started.  You solve a problem that a large enough group of people have, and you have a business.

If you follow the formula for Non-Existence, you’ll move up into the Danger condition.

Danger

In Danger, you are going from one disaster to the next (not sure if you can pay the rent next week, never mind the wages).  The formula for this is:

  • Recognise that there is a dangerous, unsafe element in the situation, and handle it directly by locating the source of the problem and correcting it.
  • Do this yourself (don’t delegate it).
  • Then organise the environment (think of and create systems based solutions) so that the danger situation can not come up again, and make sure the solutions are documented and applied by everyone in the team.

You will move up to the Emergency condition

Emergency

By following this formula, you will move up to the Emergency condition.  Suddenly, there will be lots to do or change (or there will be no change at all).

  • Talk big, and make sure you deliver.
  • Economise, and get ready for expanded activity.
  • Prepare to deliver more.
  • If you are coming up from a lower condition, keep operating the way you were, and pick up the pace. –
  • If you are coming down from a higher condition, then change the operating basis now. Find out where the problem is and fix it.

Normal Operation

If you follow the Emergency condition formula, you’ll move up to Normal Operation.  This is a good indicator.  In Normal Operation, make sure you don’t change anything.

You’re doing alright and it isn’t the time to find a new way of doing things.  When results increase, make sure you understand exactly what caused this increase, document and then increase or strengthen this action.  Make it a part of the business culture.

If results diminish, find out the cause of it and correct it.  Normal Operation is a time to relax discipline a bit as statistical trends are rising.

This is where it can get exciting.

Affluence

Following the formula for Normal Operation means that you will move up to Affluence (or Abundance) – If you would like to define it – this is success.  The formula for Affluence is to economise.

  • Slow down spending. When in the Affluence State, do NOT create any future financial commitments for yourself or the business.
  • This is the biggest mistake that occurs in the state of Affluence – money starts coming in and the car gets upgraded or you buy a new house – which puts pressure on finances eventually, and you move back down to Normal Operation or even Emergency.
  • Eliminate waste. Pay all your debts.
  • Find anyone you owe money to anywhere and pay it. Meet all prior obligations. Clear the deck for a huge amount of action.
  • With any remaining money, invest in the business to improve the ability to scale and deliver efficiently.
  • Find the exact action and people that caused the abundance and strengthen them (invest in them, develop them further).

Now you’re cooking with gas – You’re in the Power Trend

Power

Following the formula for Affluence will move you up to the Power condition.  In Power the formula is to create procedures for everything.

  • Document everything you did on the way to getting into Power.
  • Make a list of all your contacts that have had anything to do with you getting into Power.
  • Make sure the person who is taking over your role has that list, and begins to build a relationship with every person on the list.
  • Expand your area of responsibility and control.  Make sure that you are available for the person that is going to be doing your job for you, and ensure that person gets every single bit of information they require to keep things operating at the current high level.  Now expand!

If you don’t follow the formula for each condition, you’ll find yourself (and your business) moving up and down, and you won’t trend toward Abundance and Power.  The most common thing we’ve seen is organisations getting to Affluence, and then moving back down, usually because of poor financial decisions for that stage of business growth.

There’s a lot of detail in this information, so re-reading it is a good idea until you can think with it.

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