Lesson 4 · Learn
The difference between the number you have to reach and the number you are currently on track to deliver. Both halves are usually softer than anyone admits.
6 minutes · No tool · Teaching only
You now have a destination. A destination is not yet a plan, and the distance to it is not yet a gap.
The gap is what the number requires minus what the business is currently on track to deliver. Both halves are soft. The required figure was never shown to you until twenty minutes ago. The trajectory is almost always an extrapolation of recent years that nobody has stress-tested.
So the first honest thing to say about your gap is that it is probably larger than the version in your planning deck.
Eight million dollars means nothing on its own. Eight million dollars across five years is a different business problem from eight million across two.
Convert to that rate and the credibility question answers itself. Six percent a year is a focus problem. Twenty-two percent a year is a structural one. The dollar figure cannot tell the two apart and the rate can.
This is the distinction that determines everything that follows, and most plans never make it.
You close it inside the business you already have — pricing, product mix, what it costs you to serve the customers already on your books, and removing complexity that is consuming profit. The revenue does not have to change.
You close it with customers you do not have yet. New accounts, new products, new geographies, or another business bought and integrated.
A margin gap is largely inside your control and the work is unpopular. A growth gap depends on a market responding the way your plan assumed, which is a genuine risk regardless of how well you execute.
Most plans conflate the two, and the conflation always runs the same direction: a margin problem gets presented as a growth plan, because a growth plan is easier to put in front of an owner or a board.
The more years you have remaining, the more manageable the gap looks. Eight million over six years is a rounding error in a slide. Eight million over eighteen months is an emergency.
That is precisely why gaps go unaddressed until there is no time left to close them. Nothing about the arithmetic changes as the years run down — only the honesty of the presentation does.
Of the improvement in our plan, how much comes from earning more on the revenue we already have, and how much requires revenue we do not have yet? If nobody can split it, the plan has not been examined.
Next — lesson 5
