An industry partner recently praised our CEO for the speed at which we were executing on our strategic plan. The praise felt particularly good because the industry partner had some insight into our competitors. In comparison to our peers, the feedback wasn’t just that Realtracs was moving fast, but that Realtracs was moving ☰ faster☰.
The feedback had nothing to do with our position in the industry. By size, we are in the top 5% of MLS’s in the country, but we are not the largest. We have a fantastic, well-rounded, mobile friendly product, but some of our competitors have made multi-million dollar acquisitions to try and corner the market. We’re hardly #1. So why did the feedback feel so good? Because position doesn’t matter—pace does.
When we discuss pace, we are not speaking of how frantically we work, or the number of hours we work in a week. In fact, the person who praised us has no insight into whether we work past five o’clock (we don’t). We are not speaking of output. Rather, we are speaking of outcomes. The person who praised us was noting our results.
We measure outcomes in terms of key performance indicators (KPIs). For example, we know our market share for every geographic area in which we compete. We measure levels of engagement across our customer base. We watch our Net Promoter Score (NPS) daily. We know what percentage of our features are available on our mobile app. For us, an outcome is meaningful only if it has a meaningful impact to our KPIs.
Unlike many companies, our teams are not given projects to complete. Instead, the teams are given problems to solve. They are then empowered to run experiments and find the best ways to solve those problems. For each problem, we define the related KPIs. Then, we measure progress on the problem by movement in the measures. For us, pace is not defined by how many hours we work, but on how quickly we can make those measure move.
Perhaps you’ve heard the fable of the Tortoise and the Hare. The rabbit could move more swiftly, but he didn’t win the race. The only measure that mattered was who crossed the finish line first. Output didn’t matter. Only the outcome did.
Why Pace is More Important than Position
In business, there is no finish line. Many companies span multiple generations. Caswell-Massey is a soap company that has been around since 1752. Ames is a tool company founded in 1774. Some companies date back more than a thousand years.
If there is no finish line, being first doesn’t matter so much. Some may argue that the finish line is when the company is sold and its founders have their payday. But being first doesn’t even impact a company’s valuation—pace does.
For example, the top five car manufacturers as of 2022 are Toyota, Volkswagen, Mercedes Benz Group, Ford Motor Company, and General Motors. As of the date of this post, the companies (all combined) are worth around $470 billion. By comparison, Tesla is worth over $712 billion. Why? Because in a world transitioning to electric vehicles and weening itself off fossil fuels, Tesla is innovating, iterating, learning, and growing faster. Their cars even improve after they are driven off the lot via over the air updates! Tesla may not be the biggest, but they are outpacing their competition.
Picking Up Your Pace
Most organizations move slowly (get poor results) because they put a lot of time and energy into projects that don’t work. That is, the work does not yield the desired result. No matter how you try and spin it, employees know when their work does not matter. It’s incredibly demotivating and undermines trust.
If you want to speed up (improve results that matter faster), you need to quickly find out which activities aren’t yielding the desired results. For example, if you’re pouring a lot of energy into marketing campaigns that aren’t improving lead generation, you obviously need to stop those activities and find out which activities will work better. Most organizations know this. Unfortunately, more organizations don’t recognize the problem or act on it fast enough.
At Realtracs, we measure the amount of time it takes us to figure out if an idea (or activity) will improve a KPI or not. We call this our cycle time. For example, if we hypothesize that an email drip campaign will improve engagement for new customers, we measure how long will it take us to prove or disprove that theory. We often find we were wrong (the activity didn’t work) and we adjust and try something different. The more iterations we pack into a short amount of time, the faster we will find the winning formula.
In short, if you want to improve the pace of results, improve the speed at which you can iterate, learn, and find out what doesn’t work. Ironically, the hare could have won the race by doing less (not sleeping). Likewise, your organization can likely get results faster by figuring out what activities don’t work and focus on what actually moves the needle.
How Fast is Fast Enough and the Emotions of Being Behind
The fable of the Tortoise and the Hare reminds us that it doesn’t matter how often we are #1 during the race. What matters is the end result. Nonetheless, nobody likes being behind. A sales team never likes losing a deal. A customer relations team doesn’t like unhappy customers. The resulting anxiety can quickly infect an entire organization. I’ve had more than one stakeholder in my career act like Veruca from Willy Wonka:
So the question is, “How fast is fast enough?” Determining if your pace is fast enough is a function of your competition and your burn rate. Quite simply, if your pace is faster than your competitors, then eventually you will catch up. But in order to accelerate, if you burn through all your cash before you achieve profitability, it won’t matter anyway. This is why start-ups are risky and hard. This is also why startups are known for being high-stress, overworked environments.
If your pace is slower than your competition, then I won’t sugar coat it—you’d better get to work. But if you’re like Realtracs and your pace is faster than your competition, you can safely focus on the long-game and not get caught up in short-term losses or stress. Don’t be like Veruca in Willy Wonka. Just acknowledge the challenge, take a deep breath, and remember that your position doesn’t matter nearly as much as your pace.