The universal law of “business gravity” and how it affects every aspect of your company. Brainstorming.
I have been thinking a lot about growth strategies and how they affect business success, which ultimately means a scalable product created by happy employees, loved by customers, meaningful to society and profitable to our shareholders. Such a dream! Yes, I know it is incredibly difficult to achieve that, but we will all agree that it’s possible in some extent.
I have recently celebrated one year of at Trackmob and along the way I’ve participated in almost all business related activity. Billing, finance, accounts, sales, marketing, support... you name it. This holistic view of the business structure helped me to better understand how everything is interconnected and bound by an invisible force that, although not visible, is as real as gravity — “Business Gravity”.
What is Business Gravity?
What I call business gravity is a subtle force that is invisible but capable of driving changes. For better or worse, this force is acting right now on your hiring process, sales, fundraising and even your business valuation. Everything. How?
The force of gravity (F), as physics shows, is a relation between the mass of two objects (m1 and m2) and its distance (d). The greater the mass, the stronger the force. The opposite is true for the distance. As it grows, the force is exponentially reduced. “G” is a constant value that multiplies the relation between masses and distance.
Alright, let’s play a little with that. I invite you to think about your company as an astronomic object. Let’s say you are M1. How great do you think it would be? Small? Big? Now let’s imagine another object that your company interacts with…What about an employee? Good, M2 is an employee. A very good one, the kind you don’t want to loose.
Question 1— what are the odds that this employee will keep “orbiting” your company in the near future? Let’s try to answer this in terms of Business Gravity:
Mass — How “attractable” is your company?
Mass, in this case, might not be synonym of revenues. We are talking about intrinsic attributes that make a company “attractive” to employees. People, culture, brand, coworkers. Consider yourself. What makes a company attractive/massive to you?
Distance — How “far” the person is?
Distance concerns the estate of the object. Maybe the person just got onboard and is yet to have time to find affinity with the companies values. Despite the reason, the employee has a position related to your company. Let’s remember that the distance is the denominator of the formula and this value must be squared. So let’s imagine that your employee moves 20% away, or 10o “positions” away from the original position (500). What is the impact over the force?
Observe that moving 20% away translates into a reduction of 44% of the force. This concept of exponential growth is clear to me in situations where small actions, whether positive or negative, can result in dramatic consequences.
We can apply this framework to multiple situations. Imagine an early-stage startup seeking investment. Not only does it’s attractiveness matter (team, market, growth, and other intrinsic attributes) but also how well they are positioned and connected. Mass and distance will drive how investors will orbit the startup.
Ok, you’ve got the idea. Alright. Shall we move forward? Let’s talk about moving objects.
Business gravity in practice — motion and energy.
In overall, most people are interest not only in analyzing, but moving objects. This process can happen in two ways. Naturally, as your business “attracts” the object with its own mass, or artificially, which means that you will apply some sort of energy to bring it close to you.
Astronomic business 101
The concept of business gravity helped me lot to think about causality and business strategy. I have watched several of managers, investors and entrepreneurs applying a lot of energy to “artificially” change a scenario, which usually translates into burning fuel (money). Although it might be a strategy to leverage the company, quite often natural movements are far more effective and offer better returns over the time.
Let’s go back to the employee exemple. For some reason your talent wants to leave. Your first reaction is offer him more money to stay. That’s the easy way, moving objects by force and burning fuel.
Another option would be to truly understand what is going on and invest in people development, connecting work, purpose and happiness. Difficult, but possible. That would require you to thinking carefully about onboarding, culture, learning, satisfaction, health, happiness, family, incentives and other complex issues. Once done, it will make your company more attractable not only to that unhappy employee, but to all employees.
“(…) financial incentives play an important role in retention – but money alone won’t do the trick. Praise from one’s manager, attention from leaders, frequent promotions, opportunities to lead projects, and chances to join fast-track management programs are often more effective than cash”. Retaining key employees in times of change, McKinsey.
You see, creating a massive business is difficult. It requires you to think. Burning money is easy and makes you lazy. That’s the beauty of this analogy. People usually think they need a CFO to “count the rockets”, but what they actually need is someone to ask WHY - tell me why you need more rockets and I will probably convince you otherwise. If you do have a good destination, I will tell you how to use your rockets more efficiently to get there.
If you really want to create a successful business, if you want to bring customers, employees and people close to you, you will have learn how to burn rockets efficiently as you create mass, awareness and scale. You will have to figure it out how to captivate not only one but all employees. You will have to learn how to bring onboard not one but hundreds/thousands of customers. And you can’t do all that just burning fuel. That’s paramount.
“Nothing happens until something moves.”