I woke up to the morning snow last week and marveled at the beautiful snowscape. Everything was covered in 6 inches of snow (12 inches if you were my youngest). I then let the dog out and followed her to get a better view of it all. I was surprised to see half a tree laying on my now crushed fence.

I winced. Not just because of the damage, but also because we had been talking about getting the trees trimmed for about 3 years. Who wants to get the trees trimmed anyway? There’s no ROI, I don’t feel better because of it. The trees aren’t prettier or tree-ier because they are trimmed.  They are just trimmed.

At least that’s what I thought until that morning where I found out exactly how much ROI, risk reduction, and safety is in trimming the trees.

I should not have been surprised. So, now I have to pay the consequences of my apathy.

Isn’t that a lot like business?

There are parts of your business that are like trees. They are large, have a deep root system under your company, and are nice to look at, as long as they stay there. They might need some trimming from time to time but we’d only notice that they need work if something bad happens.

Beware your business trees.

Have you ever had a major part of your business break like my tree did?

Perhaps it was letting one of your clients become too big a percentage of revenue and then canceling the contract.

Perhaps it was slowly losing profit margin during a strong revenue growth phase leaving you with razor thin margins for error when you hit a bump at your now larger company.

Perhaps it was a key vendor walking away from your partnership leaving you looking for a new one that may not be as beneficial.

My problem was apathy. I knew I should do something but it looked OK. So as long as it was working, let it ride. It’s this mindset that makes business trees dangerous.

You need to actively trim your trees and prepare a plan in case they split in half. Here’s how.

  1. Be disciplined

If you have golden rules, you need to follow them. You created these principles as guideposts to keep you safe. Hold onto the conviction that they are right. It’s why you created them in the first place – to keep you safe. If you have set a standard that no client can be more than 20% of your revenue, then you need a plan for when that opportunity arises. Will you say yes/no? If you say yes, how do you get your team onboard and mitigate the risk?

Are you breaking any of your golden rules?

  1. Run break/fix scenarios

It’s hard to look at your business and stress test the parts that could cause you harm. You need to try. What’s your plan when a key player leaves, your largest customer leaves, you get sued, a key technology gets cut off, a partnership ends, a new governmental regulation upends your industry?

These are good conversations. Do you have them?

  1. Test everything

The easiest one to pick on here is budget. Budgets are a huge tree. They grow new branches and leaves every year. How often do people have to justify their budget? Do you need to use Zero-based budgeting every other year? (Zero-based budgeting is starting from scratch and adding only expenses back that are justified). We do a monthly fee subscription audit periodically as it’s incredible how fast you’ll be spending $1000/month on tools that people only look at once a quarter.

What about meetings, reports, vendors, and partners. How often do you ask yourself how valuable all those resources and relationships are? How often do you take away the low-value activities?

What’s needs a good stress test?

You have big business trees. Don’t be apathetic during the good times.  Your trees need trimming for your business to avoid surprises and thrive. It’s not worth waking up in the morning with a tree on your fence or in your house.

Dan Cooper
Post by Dan Cooper
January 17, 2019
Dan Cooper co-founded ej4, a video-based online training company, in 2003, and was its CEO until selling in 2012. During his time with ej4, he grew the company from a startup to a nationally-recognized firm, serving clients including Pepsi-Cola, Dr. Pepper Snapple, Honeywell, Monsanto and Syngenta. Channel partners included SAP and Oracle. As of the 2012, ej4 was serving 1,000+ customers, delivering millions of program views, was highly profitable and debt-free. Today, he is the CEO of Acumen, a mastermind community platform built for CEOs and Owners of strong and growing companies. He and his wife, Ali, have three children and attend Cure of Ars church in Leawood, KS. Dan enjoys running, all things soccer — coaching, playing and watching —and burning all types of meat on the backyard barbecue grill.