Last week I was in Palm Beach at the fabulous Breakers Hotel. The historic hotel was opened in 1896 by business tycoon Henry Flagler. Everywhere you look, you’re struck with a sense of awe at this magnificent property. It’s just gorgeous with these massive vaulted ceilings everywhere.
You just never know who you’re going to run into. Celebrities, political dignitaries, Noah Fleming - who knows?!
Interesting enough, to each of our surprise, I ran into the president of a company I had spoken to last year about a potential engagement - about 16 months ago to be exact.
His company was dealing with a variety of sales challenges. At the time, he discussed how everything I was writing in these Tidbits kept hitting a nerve every week with both himself and his VP of Sales.
For about six weeks, we discussed how I could help and had numerous discussions working to define a plan of action. As I always do when working with companies, I ensured that we had agreed on the “worst case scenario” return on investment from implementing the areas we were discussing. He told me he believed that even in the worst case, once we got everything implemented, that the return would be in the neighborhood $5M profit improvement per year.
But when it came time to make a decision, they couldn’t make one. I followed-up for a couple of months but nothing happened.
In the end, the plan of action became one of inaction & second-guessing.
Back to the Breakers…
We got talking, and he told me they were finally starting to make some progress. They had recently chosen a CRM tool for the sales team. When I asked how the team was adopting the changes, and more importantly, how it was alleviating the challenges we had discussed 16 months earlier (which had very little to do with simply choosing a CRM), he stopped me.
He said, “No, Noah. We just chose it...just a couple of weeks ago. Now we’re in the design stage. They’re telling us that should be done over the next couple of months.”
I was a bit surprised, but it’s a story I’ve heard many times before.
Here’s a client who’s said that there’s a $5M/year improvement available.
To reframe that, it means that every month that the improvements were delayed it cost the company just over $400,000.
Since we’d been working with a schedule of about four months to full implementation, he’d lost out on 12 months of benefits, even if he were able to get the full results we’d talked about tomorrow.
Or, in other words…
The delay cost his company at least $5M.
Of course, there’s no guarantee what I was suggesting would have worked, but the basis of all of my work is that I won’t start working until my client and I both conceptually agree the intervention will work, and we’ll work as partners to reach those objectives.
Consider the opposite side of the spectrum. I had one prospect last year tell me flat out...
“Noah, the $250k we spent with you was the cheapest part of this engagement... The real cost was that it took us months to get from deciding to act, to pulling the trigger and moving ahead. If we'd had the results, we have now four months quicker, that would have been an extra $1M in profit. Lesson learnt."
Not every project will be a success, but it brings up one of the most critical questions in business - what’s the cost of doing nothing?
Your Challenge For This Week:
Look at the investments you’re considering, and ask yourself, “Is the cost of delaying my decision greater than the cost of implementing immediately and seeing the results?”
Remember - the higher the ROI you foresee, the more costly it is to delay.
If you’re hesitating to pull the trigger on an investment that has the potential to create $400k/month in additional profits…
What’s driving that hesitation?