Corporate finances for established companies and innovation accounting for startups are extremely wide‑ranging and quite complicated topics. You have to be really good with numbers and understand different business concepts well to properly measure the performance of a company.
In corporate finance, we know financial accounting, performance reports (balance sheet, income statement, cash flow), ratios (profitability, leverage, liquidity, efficiency), financing structure, tax optimization, working capital management, and so on. It takes months, if not years to understand everything, especially in practice. But in the end, it all comes down to one thing – cash flow.
There are only two types of businesses – the ones that are making money and the ones that are losing money. The startup phase is one big exception. Almost all businesses lose money in the startup phase.
That’s why we measure startup progress differently, with innovation accounting. The core question in the startup phase is whether there is anyone out there willing to use the product and then pay for it.
Innovation accounting is also quite complicated. In innovation accounting, we know many different types of metrics, funnels, progress analyses (like cohort analysis), and methods of testing what works best. But in the end, it all comes down to one thing – the one metric that matters or OMTM.
It’s absolutely important that a company operates on high moral ground, builds quality and valuable products, takes good care of employees, other stakeholders and community, respects the environment etc., but if the company isn’t making money, there is soon no company at all. And if a startup isn’t focused and progresses fast enough in OMTM, it will never grow into a successful company.
In the end, it all comes down to one thing in business – cash flow or OMTM.
OMTM – The one metric that matters
The one metric that matters in the startup world shows if a company is building something that people want to use and pay for or not. It answers if there is any value in the product or points in the right direction of how to build it. Together with other metrics, it helps company management build a sustainable business model around the product.
The one metric that matters is always simple, actionable, you can easily compare it with the past results, and it answers the most important questions related to the progress of the company.
It forces you to draw a line in the sand, it completely focuses you actions and inspires a culture of experimentation and innovation (source: Lean Analytics). It’s a goal you hang on the main wall in the company and then everybody is fighting for.
We can, of course, use the concept of OMTM pretty well in personal life.
OCTM – The one change that matters
Ask yourself: What is the one change, one single change that would really completely transform the quality of your life? What is that one thing that’s dragging you down? One thing that is just too painful to deal with? What is your characteristic drawback that is fu*king with the quality of your life the most?
We all have it. Usually people know what it is. Sometimes they don’t. But we all have it. If you know it, good. If you don’t, take a few minutes to self-reflect and analyze what it could be. Most often it comes down to stupid beliefs and bad habits like:
- One big destructive personality character
- Extremely poor money management
- Being drawn to shady people and environments
- Eating an extremely poor diet
- Being awfully unfit
- Going from one abusive relationship to another
- Working for a boss who is an asshole
- Being too ambitious or not ambitious at all
- Not believing in yourself
- Being sure you aren’t good with technology
- That one fear that’s holding you back
- Too many negative thoughts and emotions
- Extremely poor time management
- Scarcity mindset
- Other similar toxic beliefs or behavioral patterns
What is that one thing that’s holding you back? We all have strengths and we all have weaknesses. You can analyze all of them by performing a personal SWOT analysis. Furthermore, we can divide weaknesses into two categories:
The ones that matter and the ones that don’t. Among the ones that matter, there is one weakness that matters most. That should be your focus. That's the change that can bring the biggest positive impact to your life.
For example, I am really good with all analytical things. That’s one of my strengths. But I am really bad at all sports that involve a ball. I just can’t catch a ball. But that is currently an unimportant weakness, because there are many other sports I can do. I’m not and don’t want to be a professional tennis player.
At the moment, my biggest weakness that matters is that I’m too critical (especially the outer critic is working overtime). That’s the weakness that greatly hinders the quality of my life. A quote from Mark Manson points to the solution for my outer critic: “Challenge yourself to find the good and beautiful thing inside of everyone. It’s there. It’s your job to find it. Not their job to show you.”
Now the time has come for me to deal with it. My OCTM at the moment is – when I interact with a person do I find something I like about them or something that bothers me? One or another, there is no third option.
Dig deep to find the reason why it’s so hard to change and then act
There are two ways how you can change yourself and deal with the one change that matters. One way is the behavioral approach, which means that you go straight to changing your behavioral patterns, without paying any attention to your thoughts and other inner processes. You kind of force yourself to act different than usual.
The second approach is the cognitive approach, which states that you have to first change your thoughts and the behavior will follow. You have to first understand what’s going on with you, and then the change comes from within. You feel how you change yourself in your bones. The cognitive-behavioral approach, a mix of both, works best. You can read more about it in the article on how to upgrade your brain.
Behavioral-cognitive approach to change is the toolbox we all have at disposal to deal with the one change that matters. OCTM is usually such a painful and hard change to implement that you must attack it from all sides. You have to understand why you’re sabotaging yourself and then change how you think, talk and act.
The one change that matters most always has a deep toxic underlying belief, and you have to dig deep to find it. Only by digging deep can you understand why you are as you are and then change it. Self-reflection and the 5-whys analysis are great tools for that. Sit down, take a piece of paper, and start asking yourself all the tough questions.
Why are you as you are? Who was like that in your family? Who was labeling you so you really started to believe that way? Is there any evidence that your beliefs are false? Where does the real pain come from? With what kind of a cognitive distortion do you have to deal with? How would you feel if you did the opposite? Why does it hurt so much? Why? Why? Why? Why? Why?
If we go back to my example, my inner and outer critic are so strong because I was always criticized. The outer critic helps me create distance in relationships and protects me from getting hurt.
When you dig dep into your big drawback, you’ll find very similar reasons. Your parents were bad with money, they labeled you as non-practical, you were never allowed to do something, and so on. You can help yourself with the list of the ways how not to raise a child.
If you dig deep enough, you will find the underlying reason. It will hurt, it won’t be pleasant, but it’s the first step towards change. Nevertheless, knowing the underlying cause solves one part of the equation. Knowing why is not the final solution yet. The other part of the equation is actually changing your strategy, goals, vocabulary, behavioral patterns and actions.
You do that by consciously deciding and making a new agreement with yourself – from now on, I will do things differently. Then you consistently do things differently day by day. When you fail, and you will fail, you correct your behavior next time. You do it differently again and again until you change yourself and you are finally able to follow a sounder and more rational life strategy.
You finally start saving money. You go to a technology course. You stop losing your temper. You build yourself a motivational environment. You terminate abusive relationships. You start taking care of your health. You raise your ambitions or, on the other hand, start being satisfied with good enough. You face your fears. And so on.
Focus on the one change that matters
Close your eyes and try to imagine how life would be different if you could finally face that one change that matters. How would the quality of your life be better? Would you finally enjoy a full bank account, healthy relationships or high energy levels? Would you finally work on something that is thrilling and exciting? Would you finally start living up to your full potential?
People change because of inspiration or desperation. They either get inspired to change their lives or they are forced to do it. Don’t wait until you’re completely desperate. Don’t wait until the pain is too much to bear or you’re too deep in shit so your only option is to get yourself out of it.
Instead act out of inspiration. The sooner you face the painful reality, the sooner you face that one personality characteristic that’s dragging you down, the sooner a better life will begin.
Since it’s so hard to deal with that one change that matters most, it often makes sense to completely focus on changing that one thing. Like successful startup companies and businesses do. That’s why we call it the one thing.
The best way to face it is to forget about any other change or improvement, any additional project or investment, and concentrate all your effort, stamina, resilience, resources, creative and analytical potential and cunningness to deal with that one change that matters.
Stop running away, stop hiding, and face the one change that maters.
If there is something that’s really dragging you down, if it’s obvious how your life will soon collapse under too much debt, fat, abusive relationships, negative thoughts or anything similar, drop everything and focus on changing that one thing.
Prepare a Goal Journey Map for yourself, build a superior change strategy, choose the right one life metric to measure your progress, dig deep, reprogram yourself, change your behavior, monitor your progress daily, and don’t stop until you become a better version of yourself.
When it comes to dealing with the one change that matters, there are only two rules – (1) face it ASAP and (2) never retreat, never surrender.