Is your business on the edge of Death Valley?
Published: September 11, 2019

There are two Death Valleys. There’s the one in California, that recorded the world’s highest-ever temperature, a whopping 56C. Then there’s the other Death Valley, the one we invented for the purpose of this blog. It’s where many businesses come to grief. That’s the place we’d like to explore today.

So, what is Death Valley?

Basically, it’s an area you don’t want to be in, but one you can enter without realising it. You can find yourself there when, having built a successful company, your growth needle plummets, and despite your best efforts you can’t get into the profit zone you’re looking for. Welcome to Death Valley.

Many owners deny it at first, often believing it’s just a blip, something a sales drive will fix, or that it’s just a dry spell. But gradually the dry spell turns into a drought. You’re unsure how this happened, or why and how you were blindsided, but the figures don’t lie – you’re well and truly in it.

Should you be worried if you find yourself headed there? In a word, yes. Death Valley is getting bigger and more crowded. Since 2010 failure rates of small and mid-tier organisations stand at 50%. Literally thousands of businesses enter the Valley and never come out. Most entrepreneurs think it won’t happen to them, and because they didn’t expect it, they’re not prepared to deal with it when it occurs.

Businesses often land in Death Valley because of bad habits they got into long before they got there. Conducting our own research, we wanted to find what was happening with businesses today, and how prepared they were to tackle problems like Death Valley. Gathering responses from over 400 companies we looked at the six core pillars of strategy: purpose, vision, values, market positioning, business growth indicators and finally strategy implementation based on our Strategy on a Page methodology.

Our research doesn’t make for happy reading. Business indicators and the ability to implement strategy are vital to survival and growth. Unfortunately, the research showed that the single weakest pillar is strategy implementation. The average score was a humble 36 against the required score of 80, followed by growth indicators at 47. Businesses are on the edge of Death Valley without knowing it or equipped to escape it.

Are you in Death Valley?

So, the big question you need to ask yourself is – could my business be in or on the edge of Death Valley? You can start by asking yourself the following questions:

• Am I frustrated with my sales growth?
• Is my profit margin reducing?
• Am I struggling to attract and keep the right talent?
• Am I targeting the right customers with precision?
• Is my product fit for market?
• Are my cash reserves reducing?
• Is my cost of customer acquisition increasing?
• Is the lifetime profit value of my customers reducing?
• Am I running out of ideas of how to break the current business cycle?
• Is our competition growing faster than us?
• Am I convincing myself that something good will happen to turn the business back into high growth?

If the answer is yes to some or all the above, then you’re probably in Death Valley, or about to enter it. But all is not lost. Many owners have subsequently avoided or climbed out of the Valley to create robust, successful businesses. But you can’t procrastinate or waste time in denial. To move back from the edge you need have the right strategy in place, the right attitude and the right people around you to implement in.

In the second part of the blog series, we’ll talk in more detail about what you can do. In the meantime, if you’d like to speak to a BGI specialist about your own business and how you can avoid Death Valley and scale up, then book a Discovery Call at your own convenience.

To make a Discovery Call click here.