In the Current of the River

Here's an analogy that I think is helpful when you are routinely evaluating the performance of your business.  

Whether we want to be or not, we are in the current of the river. There are times we choose to fight the current, and other times we choose to go along with it, but we best not choose to ignore it.  We are in the current, no matter what.

Of course, I'm not talking about a literal river and real water.  I'm talking about the current of today's economy and the current of technological evolution.  

Just like real river currents, sometimes economic and technological currents are overwhelming.  We might get swept downstream no matter how strongly we try to resist.

Rather than just looking at straight financial numbers from your accounting program, understanding that you are in the current gives you a better perspective on how your business is doing.

An example:  You are in the homebuilding business.  Let's say your sales are down 10% from last year.  Just looking at the straight numbers would seem disappointing.  However, new home starts are down 20% year over year.  That's the current of the economic river.  You are in it.  You are actually doing pretty well considering the circumstances.  

If you don't think about the current, you will tend to give yourself too much credit when things go well and too much blame when they don't.  

I believe a healthy way to think about it is this:  If the market is up, you want to be up a little more.  And if it is down, you'll probably go down with it, but you want to be a little less down. 

Another observation:  When a company is very small, its growth can exceed whatever the market is doing.  My business was this way in the early years. But as a company grows, the ebb and flow of the economic current affects it more.  It becomes harder to out-perform the market.  There’s no rocket science to this.  It’s just common sense.  

The way to navigate the current of the river is to concentrate on making sure that your service level is the best it can be.  Business being down because the market is down is one thing.  Business being down because you did a poor job is a completely different thing.  If you concentrate on doing a good job with every order, you will navigate the current well, and do a little better than wherever the current takes you.