Advice for CEOs

In the previous installment of this article, I explained an important aspect of what happens to companies in No Man’s Land: profitability erodes as the company grows. Operating Leverage is a key indicator you can use to predict when you are entering or exiting No Man’s Land. It is a simple diagnostic tool that highlights whether the fundamentals of your business are eroding or improving.

In Doug Tatum’s book, No Man's Land: Where Growing Companies Fail, he describes a set of symptoms that indicate that a company is in No Man’s Land. Some of these include; working in, instead of on the business; working harder and longer hours but not getting the desired results; managers showing signs of “being over their heads”, with cash tight even if the company is basically profitable. Concerns about meeting payroll and other obligations; losing touch with your customers; quality problems with the products and services you sell; deteriorating service levels and lead times getting longer - all these combine to make you and the organization feel that you are in a state of chaos. These are tell-tale signs that your company is in No Man’s Land.