The Power of Marginal Gain Theory for Revenue Improvement

These CEO’s improved a few small things across their revenue creation, by just a few percent. Look at what happened to their revenue results.

David Brailsford’s is one of the highest profile success stories in professional sport. In 2010 however, when he took on the job as GM and Performance Director for Team Sky, Britain’s new professional cycling team, success seemed a very long way away.

Up until then, Britain was a perennial under-achiever on the world cycling state. Brailsford was tasked with changing that. His approach was staggeringly simple.

Brailsford championed a philosophy of what he called “marginal gains - the 1 percent margin for improvement in everything you do.” He believed that if he could improve every area related to cycling by just 1 percent, then those small gains would add up to a remarkable overall improvement.

David and his team began with the obvious things: training programs, bike designs and weights, rider nutrition and the like. Then they moved onto the less obvious elements – those hidden beneath the surface.

They started looking for 1 percent improvements in seemingly insignificant areas overlooked by other teams: improvements to the geometry of bike frames, tire inflation and resistance on the road surface, rider hygiene - even to the level of the pillows they slept on and how they washed their hands. No potential for improvement was considered too insignificant.

Brailsford was convinced that if he could harness these aggregated 1 percents, Team Sky could win a Tour de France in five years. They took three!

In 2012, Bradley Wiggins became the first British cyclist to ever win Le Tour. In that same year, Great Britain won eight gold cycling medals, 12 total cycling medals and set three world records at the London Olympics. Britain’s coach? David Brailsford.

So phenomenally successful has the last decade been for British cycling it has been referred to by many as its golden age. So - what can David Brailsford and Team Sky teach us about making more revenue?

The Aggregation of Marginal Gains

Business leaders frequently overestimate the importance of one defining moment and underestimate the value of making better decisions on a daily basis. Almost every habit that we have — good or bad — is the result of many small decisions over time.

How easily we forget this when we want to make changes. So often we convince ourselves that we can and should be like Steve Jobs – that change is only meaningful if there is some large, immediately visible outcome associated with it. Whether it is losing weight, building a business, or making a sale, we often put pressure on ourselves and our people to make some earth-shattering improvement that will change our world for the better as if in a single instant. Meanwhile, improving by just 1 percent isn’t notable - it isn’t even noticeable. In fact it’s frequently plain boring - and therefore it’s more than often completely overlooked. But it can be just as meaningful and powerful. It also comes with way less risk – and cost.

Unfortunately, the same pattern also works in reverse. When you find yourself stuck with bad habits or poor results, it’s usually not because something happened overnight. It’s the sum of many small poor choices — a 1 percent decline here and there — made over time, that eventually appears as a major problem.

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