Frameworks & Finance

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How to get out of a rut in your business

Nov 30, 2023

Have you ever been frustrated because you can't get through a plateau?

Today I share a personal story on golf and how it relates to your business.

We also talk some statistics.

But first, our sponsor.

 

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GOLF, STATISTICS, AND GETTING OUT OF A RUT IN YOUR BUSINESS

Growing up my dad used to take me with him when he played golf. That meant from an early age I loved the game.

When I’d play with him, he had one rule: if he beat me to my ball, he was picking it up.

As a young/new golfer, you’re going to hit bad shots. If I got frustrated or distracted by a limb, he’d beat me to the ball and pick it up. It forced me to play quickly. Sure, he was lenient and would turn it into a game, but it deeply engrained quick play into my DNA.

Even now when I go on the golf course, I get frustrated when my playing partners play slow to the point where it can impact my score.

And while I was exposed to golf at a young age, I wasn’t exactly a passionate young fella. I didn’t understand what it meant to be great at something.

I played in some tournaments, but it wasn’t until high school that I started taking golf serious competitively.

But the problem was I had a lot of ground to make up. So, I went and took some lessons. Through the lessons, I got better but still struggled to “get over the hump.”

I’d shoot rounds sufficient to make the team when playing on my own, but when it came to competition I’d struggle. The pressure and desire to make the team meant I put pressure on myself and didn’t perform as well as I was capable of.

I didn’t have the reps to perform under pressure.

Even outside of the pressure-packed environment of high school golf team tryouts (did you catch the sarcasm there?), performing on the golf course is difficult.

I’ll shoot one good round, then a bad. Next I’d shoot 3 good and 1 great, then blow up and shoot my worst score in years.

One thing is certain in golf: consistency is impossible.

But what if, hidden inside of those scores was actual consistency?

Let me explain.

In statistics, you have the mean, median, mode, and range. All 4 calculate different things.

Let’s create an example. Continuing with my golf example, here are my last 20 scores:

77 79 75 80 81 78 73 78 75 77 79 77 87 84 79 81 75 79 79 90

The mean is the average value of all possible outcomes. Cool people call it “the average.” To get the average (or mean), you add up all values and divide by the total count (number) of values. When you add up the 20 numbers above (1583) and divide it by 20, you get a mean of 79.15.

The median is the middle value of all possible outcomes. You line up your values from least to greatest and then pick the middle value. Above, the middle value (or median) is 79, as there are 9 values before and after that numbers (there are 2 values in the middle, which you’d average, but in this case they’re both 79).

The mode is the value that appears most often. In the case above, that value is 79 as it appears 5 times.

The range is the difference between the smallest and largest number. You take the largest number (90) and subtract the smallest number (73). Using the above numbers, the range is 17 (90 - 73).

Regression to the mean

Going back and looking at the mode data, you’ll see that as you get closer to the mean (79.15), you see those scores repeated most frequently. Because it’s a small sample size the result isn’t perfect, but the principle still applies.

Looking at all possible outcomes, the most common outcomes are closest to the mean and outcomes become less common as you move away from the mean.

So when talking regression to mean, it’s the concept that if one outcome, or sample of outcomes, is extreme, the next outcome (or sample of outcomes) is likely to be closer to the mean.

While this is used in scientific settings, it still applies both personally and to your business.

We’ll have a great outcome and assume that outcome will be what happens going forward.

Then it doesn’t… so what happened? We had a regression to the mean.

But what do we think? we call “jinx.” Because we thought about or praised the outcome, we caused that failure.

In sports, you see this all the time. In golf, a putter is making a lot of short putts so the announcer mentions it and he misses the next.

In basketball, a player will make a string of free throws and then miss the one right after the announcer brings it up.

They miss and the colleague exclaims “you jinxed them!”

A quick YouTube search got me this compilation of Announcer “jinxes” with 2.5 million views.

So, why does this matter to you?

We often perform our best and assume that that performance will keep on.

When it doesn’t, we beat ourselves up and self-sabotage future results.

So, how do we stop that?

  1. We acknowledge the extreme outcome
  2. We think of ways to overcome the regression
  3. When we do revert to mean, we let it go

1 & 3 don’t need much explanation, but let’s talk about 2. How can we overcome it?

In a business, this can be accomplished 2 ways:

  1. Create a system
  2. Improve your skills

Create a system

Systems take your “worst” result and create a floor on the result. Systems look like:

  1. Standard Operating Procedures to create consistency
  2. Creating KPIs to review results
  3. Regularly scheduled meetings to review the KPIs

Systems help a business stay consistent.

With the right systems, your business will thrive and the system will “bump up” your worst potential outcomes.

Improve your skills

Even the best in the world keep learning.

Anyone who stops learning is old, whether twenty or eighty. Anyone who keeps learning stays young. - Henry Ford

You improve your skills by:

  1. Getting more experience and applying the learnings
  2. Continuously practice the skill
  3. Hire outside experts to level up your organization's skills

Too often I see businesses afraid to hire to level up their skills. The reality is, the pace of learning you have is limited by your current knowledge, access to resources, and the time you can commit to it.

If you can only commit 5 hours a week, but a consulting firm is committing 20 (plus their additional knowledge and resources), you can supercharge your learning.

You essentially jump levels and can shorten the time it would normally take.

It can be so frustrating as a business owner to feel like you’re stuck in a revenue or profit rut. I’ve seen it time and time again.

Every business is limited by the skills and systems of the individuals who are a part of the business.

How are you going to upgrade your skills and systems today, next week, and over the next year?

This is the path to unlocking growth and getting out of the regression to the mean cycle.

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