Maximum Sustained Impact
In my last post, I ran through The Plan, Gordian Software’s 3 day sprint system. In the past 3 months, we’ve doubled revenue and also received lots of questions about how The Plan works.
So, let me introduce the secret. We call it Maximum Sustained Impact.
In short: The Plan is only a routine and does not create success by itself. It works because we have a team where everyone is aligned on making their Maximum Sustained Impact. This allows them to handle the high ownership/fast paced Plan without burning out or dragging the team.
For the long version, let’s define our terms:
Maximum - “As much as possible given one’s current knowledge and capabilities”
We focus on one’s existing skills, limitations and knowledge to define their maximum rather than an idealized absolute.
Once we focus on achieving our current 100%, then we can look to expand it:
- Is there a gap in my product knowledge that’s keeping me from my full potential? I’ll learn more so I can be more effective.
- Am I lacking skills that would increase my impact? I’ll learn those skills or find someone who has them to help me.
- Am I motivated enough to take on high impact work that I could do? I’ll take time off or shift my focus to renew my drive.
Sustained - “At the level you want to continue”
We have a small team, so everyone is naturally in a high impact position. These positions require lots of time and energy to execute well. More so when you are learning new skills and pushing the limits of your knowledge.
Getting it right requires good tactics (day-to-day decision making) and the right personal strategy (setting up the right structural pieces in your life). This takes wisdom and self knowledge.
The key question is: when should someone push hard on business, when should they recharge and when should they take care of their other responsibilities?
Our philosophy here is linked to our core value of Freedom. Everyone is free to set their schedule in the way that enables their Maximum Sustained Impact and we will support them.
There are a few concrete practices in the company that help here:
- Flexible working: Everyone chooses their own schedule. Only The Plan is mandatory. Work best early or late at night? No problem. Need to take a midday break for a personal obligation? No problem. As long as you don’t block others on the team, you’re free to set up your schedule the way that you need.
- Life Happens leave: Sick time and personal emergency time are “default approved” and generally do not count against your vacation days. We expect people not to show up for work in these cases and just ask them to mitigate the impact on their coworkers if possible. We trust people to determine what falls under this policy and what is discretionary leave.
- Parental leave: Having a child is a huge transition for both parents and requires time to find the “new normal”. We want to recognize that and give space for it to happen. In time, we expect parents to come back into the flow of Maximum Sustained Impact, just as we all do, but we take a longer term view here rather than push for the earliest possible return to work.
We use these tools to remove unneeded friction so that we can sustain our impact over time.
Impact - “Profit over time”
This one is simple. High impact activities increase profit in the long term. This requires both short and long term thinking from everyone on the team. Everyone on the team is responsible for knowing how their work fits into creating a long term, profitable company.
This applies to all domains of work:
- Recruiting? Adding high performing people improves profit.
- Finance? Making correct financial decisions improves profit.
- Engineering/Product? Better products make more profit.
- Sales? More and better deals make more profit.
We’ve been profitable since our early days and are very capital efficient. We grew to $12M annualized sales and were profitable on less than $250K of investment. This is extremely rare and comes from an uncompromising focus on “what is the most impactful thing I can do today?”.
The Plan
We need all three elements for success. To illustrate:
- If your maximum impact is high, but the time or energy required to achieve that impact exceeds what you want to give, then you won’t sustain it over time.
- If you have limited knowledge or skills, then your maximum impact will be low regardless of whether you can sustain it.
This matters because The Plan is a self-directed, relatively ambiguous environment. We use Maximum Sustained Impact to bring tremendous flexibility, focus and creativity to bear on the critical problems in front of us. The results are clear. We’ve grown from $0 to $55M in annualized sales with less than 10 people.
The Plan is not for everyone
In all honesty, the work is intense and demanding. Startups are an exercise in sacrificing the present for huge and uncertain future gain. On top of that, we are growing extremely quickly (925% in the last 6 months as I write this) and struggling daily to keep up with demand for our product.
This is why we need Maximum Sustained Impact. It isn’t objectively measurable, but it’s the only way to succeed in our mission.
We’re comfortable with that.
There is an alternative view: the maximum is not relevant, a company should set an “acceptable” performance standard and have no expectation of anything that is over the bar.
This view is legitimate and appropriate for many companies, but not for us.
So far, it is working. It’s enabled us to deliver results: $55M in annualized sales, $6.1M per employee and 925% growth so far in 2021.
We’re just getting started.