Tim McCarthy and the Business of Good

Newsletter: Looking Before Leaping

Jun 1, 2010 7:20:00 AM / by Tim McCarthy

Great organizations depend on great research and all ideas can and should be tested before  being rolled out into the market. [more]

My first learning about research was probably from my Dad, an M.D. who did his rounds at our small county hospital. As he reached retirement age in the mid 1970s, our hospital still had doctors “on call” for emergency room services.

The hospital’s administrator suggested to Dad that he could “retire” by starting a fully organized and staffed emergency room system for the hospital.

He wanted to stay busy and insurance was getting expensive due to his age so he told the admin he would do it – but only if he could first spend a year studying big city emergency rooms that were already operating full-time, 24 hour systems.

They agreed and it turned out well. He got to work another 7 years and the emergency room he started at the Ashtabula County Medical Center continues to grow as a regional center 30 years later.

With that learning and the encouragement of my sister, Kathleen, whose PhD is in research, I’ve always tried to use research to “look before I leap.”

When I considered starting a business, for example, I spent six months interviewing more than 20 successful entrepreneurs around the country to learn what to consider before taking the plunge. I recorded everything they told me and compiled it into a situation analysis for my start up business plan. The business I began from this research in 1988 became the business I sold in 2007.

In that business, we changed from a consulting firm to a mail shop firm and finally to a product company (WorkPlace Media) through hard work and constant research. The product which ultimately made us “famous” was conceived around 1994 and yet was not fully developed and nationally introduced until 2001.

Said simply, we looked constantly and carefully as we leaped.

In recent weeks I’ve grown concerned about the people I care about who appear to be leaping before they’re looking.

The primary culprits, perhaps as you’d expect, are the small businesses we help launch then grow. They hesitate, mostly just from inexperience, to research costs and create revenue projections before they launch those ideas.

Much worse, they don’t put measures in place to check their progress before their investment becomes difficult to payback. We rarely invested money in developing WorkPlace until we’d exceeded a benchmark of success that allowed that new investment.

A small but typical example of my entrepreneurs leaping is a coffee shop that decided that people in our little town would be drawn to fresh roasted coffee. He thoughtfully researched and found that no coffee roasters exist within a sixty mile radius.

But what he didn’t research was who exactly would be his buyers and how he would market to them.

So now, while doing very well and making wonderful progress overall, his expensive roasting machine operates at about 30% of its capacity.

That’s what I consider a very avoidable problem.

Recently, two larger businesses – one for-profit and one non-profit – really surprised me by making huge leaps without looking. Of concern is that each of these friends run sizable organizations with more than 30 years of success behind them.

They should know better.

In the non-profit case we were engaged in a well conceived plan to double their size when I found out they were barely making payroll. Note to self: Don’t do that again!

The for-profit bought a company of similar size in only 30 days because he got it cheap.

Importantly, both organizations will likely weather the storm they’ve created. But why create such a storm?

Their storm was created, in my view, by not being sure of where they were (look) before they decided where they were going (leap). To me it’s that simple.

And lest you think I’m preaching from a clean pulpit, my own experience indicates that I’ve created my own troubles, too. Most wrong decisions I’ve made were due to taking an emotional view of situations. I usually term this view “optimistic” because by doing so I can accuse anyone who disagrees with me as being a pessimist.

Look, it’s our job as leaders of our organizations and of our lives to look at every opportunity. Right now, in fact, I’m excited about what a small, well funded foundation will be able to do to put a dent in poverty through social business innovation.

But it’s taken a couple years already and may take a couple more to identify specifically how we will take our big leap. We’ve already jumped into several things but most, after measurement, have fallen short of their goals and therefore been abandoned.

But eventually we will leap once we find that canyon worth leaping into. We’ll just make sure there’s a net near the bottom of the canyon.

What in your organization or life is tempting you to leap?

It is likely that there is good reason to do so. You wouldn’t have gotten as far as you have successfully if there wasn’t merit in considering opportunities.

Just make sure to take a good long look... before you take the big leap.

My Dad would have preferred staring the new emergency room system six months after he was assigned the task. In fact, I remember him being pretty excited about getting to work.

But by taking that year and learning what issues others (in the big city systems) had already encountered and overcome, he probably avoided a ton of problems that he’d have faced by leaping too soon.

I plan to do the same as I venture carefully into this next chapter in my life.

Tags: Monthly Newsletter, Business & Entrepreneurship, Organizational & Operational Excellence

Tim McCarthy

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