A Little More About Going "Outside The Envelope"

If you read my last post, I spent a little time on "the envelope" that we use to determine an airplanes performance.  At each of the four corners there is an absolute maximum performance intersection.  It is the place where two variables must be exact in order to reach that corner.

If either of these variables exceeds the limit you leave the envelope.  Let's say you want the minimum speed for the maximum weight.  This situation is full throttle.  Think of it like loading your car with the absolute most it will hold and go up a hill at the same time.  If you have more weight than the engine will handle, you end up going backwards even though you have the pedal to the floor.

The same is true in flying, business and life.

In business it can work the same way with leverage (loans) and income.  Too little income and you slide backwards on the loan.  Too much loan and you don't have the income which leads to the same problem.

If you don't get enough of a loan, you might be "undercapitalized" and therefore not have enough products or people to earn enough income.  Balance and respecting both minimum and maximum limits is critical.

More importantly, the edge of the envelope is maximum performance.  The really great pilots and business owners can get right to the edge and sit there comfortably.  They know it, respect it, and occasionally stick a hand across to see what it feels like on the other side.

In the airplane we have a list that tells us how to change the envelope when the airplane changes. If a part is missing, and yes we fly like that, we need to adjust because the edge has adjusted.  Business is no different.  Sitting on the edge doing nothing is dangerous in business because it always is changing.    The greatest at sitting on the moving edge are the business founders we call visionary.  Steve Jobs, Bill Gates and Jeff Bezos come to mind.

Love em or hate em, they businesses they founded have all been to the edge and remained there more often than not.

Spins are the anomaly in flying. What appears to be a totally out of control venture that is way outside of the envelope of "normal flight" requires very specific inputs to perform and recover the airplane back to "normal flight".  Spins teach us where the edge of the envelope might have changed.  Sometimes spins are fatal, other times you re-enter the envelope, but always in a different place than you left it.

New Coke was a quick spin for the Coca-Cola company.  They tried it and survived and it was a guidepost for the company as it re-entered its own envelope of business.

The trick to spins is to make sure you have the energy and altitude to recover safely.  The trick in business is not to go all in.  Coke had several other products and when they realized that "New" Coke wasn't going where they wanted it to, and was taking too much energy, they started a recovery with "Classic Coke" and then just brought it back as "Coke", eventually eliminating "New Coke".

Spins are simple, but they aren't easy until you practice them a lot.  The same thing is true in business.  Going outside the box is simple, making it profitable is the challenge.