The 1% Solution: The Key to Lasting Business Improvement
By Tom Connellan
No matter what type of business you’re in, there are bound to be a handful of companies in your field that seem to be far ahead of the rest of the pack. Most everyone seems to be running as hard as they can, looking up every now and then at those few in the lead. And most everyone is trying to work out which big change to make or what lucky break they need in order to catch up.
But there’s another, far more helpful, way to look at this challenge. Rather than searching for the next big improvement to make, we need to be looking for the many small improvements we can make in our businesses every day.
Stop and think for a minute about just how much distance is really separating you from the highest achievers in your field. The top company is certainly not 100% better than its nearest competitors. Not even 10%. In fact, in almost every field of human endeavor, all that separates the great from the exceptional is about 1%.
A perfect example of the power of 1% comes from the Olympics. I analyzed results from a range of sports across a range of Olympic Games and discovered something amazing: In virtually every event, the average difference between the gold medal winner and fourth place is just 1%. Sometimes it’s even less than 1%. When Michael Phelps won the men’s 100-meter butterfly at the 2008 Beijing games, his margin over the swimmer in fourth place was 0.15 seconds, or just 1/3%.
Let’s apply this to your company: There’s no way you can be 100% better than the competition. But that’s okay, because you don’t have to be. The key to building sustainable improvement lies not in trying to be 100% better than your competition; it lies in simply being 1% better in everything you do.
What if you go to your sales team this month and ask them to focus on being 1% better at winning new customers than your competition? It will be pretty hard for them to say no to a request as reasonable as performing just 1% better. Let’s say your customer service department makes a minor change in the way they take calls, with the result that your customer satisfaction scores on average rise to 1% greater than your competition’s. And your distribution team tweaks one of its processes and achieves 1% faster delivery times. Now translate this across all the hundreds of things that your business does every day and imagine the snowball effect of these relatively small improvements.
Small, easy-to-achieve changes to the way people do their jobs are what lead to true and lasting improvement in a company. The key is to ensure that they are carefully targeted, high-leverage changes.
Leverage makes it possible to lift things with minimal effort. When you were a kid, you probably weren’t strong enough to pick your best friend up—but on the seesaw in the playground you had no trouble lifting him or her far off the ground. A seesaw is a kind of lever. The principle of leverage applies in business improvement: Make the right small change in the way you do something, and you will see outsized improvement in results.
Here’s a real-life example. A man’s new bakery was failing to get customers because it had a deep entrance, no storefront windows, and he wasn’t allowed to put a sign on the sidewalk. It looked like he might lose everything, until one day he dragged an old table out of his garage, set it up near the doorway of the bakery, and spent $12 on a fan. Every time a batch of baked goods came out of the oven, he put some on the table and turned on the fan. The irresistible aroma wafted out to the street, and people began stopping and looking around until they’d figured out where it was coming from. Within one week, his sales had doubled. That’s a small change with a big impact. There are probably scores of such changes you can make in the way your company operates.
When people in your company begin to make the right small high-leverage changes, their performance improves quickly. This gives them a sense of accomplishment. Research has shown that this is the best way to increase motivation, because when a person feels a sense of accomplishment, they are motivated to accomplish more. And when they accomplish more, they start receiving positive feedback—from their managers, other departments, and customers—making them even more motivated to maintain their improvement. You get a team that is fully engaged in their work and that has a structure in place for continually improving performance—1% by 1%, day after day.
Tom Connellan is a New York Times bestselling author of 10 books. In demand as a keynote speaker by firms such as FedEx, Acura, BMW, Neiman Marcus, Canadian Tire, Marriott, Home Depot, Sobeys, and TD Canada Trust, he has gained a reputation as a “tough talking and truth telling” speaker because he delivers actionable ideas.