I like consistent and continuous progress and improvement. At the same time, I work hard to avoid distraction. To make good decisions about what is important, we all need a standard to evaluate which ideas merit attention, and which ones are too small to create an impact. A “1% idea” is one that’s big enough to generate incremental income equal to 1% of last year’s sales. It’s as simple as that. Since adopting the “1% idea,” I’ve never looked back.
Putting a collection of modest improvements into action is often easier than betting it all on one thing, but what does “modest” mean? Do you have a metric to judge every opportunity as you head into 2020?
Is a coffee shop’s decision to offer that new, gluten-free, hazelnut vegan tart going to take its business to the next level? If sales were $400,000 last year, could that tart bring in $4,000 in incremental income? If yes, they should go for it. Does Apple need to offer ten types of covers for each iPhone or is one enough? Since Apple reported $258 billion in sales last year, can they sell $2.58 billion worth of each new type of cover? Does McDonald’s need to put the McRib back on the menu in every location around the world? Can that item produce new sales equal to 1% of last year’s $21.9 billion in revenue? Are you asking yourself these types of questions?
A product pipeline filled with a collection of ideas, each potentially contributing new growth equal to at least 1% of last year’s sales, means every year will be off to a positive step forward. Want to grow 5%? Find five “1% ideas.” There are loads of metrics you can use, but the beauty of 1% is that it’s a pretty easy calculation. When the math is easy, you’re free to focus on other stuff.
Is your next new product launch, cost savings initiative, headcount addition, or marketing effort a “1% idea?” How many “1% ideas” can you implement in 2020?