By Marcus Coetzee, 30 July 2019.
Recently I’ve been fascinated by the Pumpkin Plan – a business strategy described in the book “The Pumpkin Plan” by Mike Michalowicz. I found the book inspiring and accessible. It is currently my favourite book in this genre.
The Pumpkin Plan uses the example of farmers who grow gargantuan pumpkins that weigh over 500kg.
It is a focused approach to finding your ideal customer (or beneficiary), serving them with your unique ability, and designing systems for your enterprise to run more efficiently.
The Pumpkin Plan resonates with my philosophy of minimalism and simplicity because it requires a focused approach and the reduction of strategic clutter. It also embodies the Pareto Principle where 80% of effects come from 20% of actions.
I’ve been applying this plan to my own consulting business over several months. I have also started to bring similar themes into my strategy work with clients. The results are promising.
The Pumpkin Plan was designed for entrepreneurs who wish to set-up businesses that can be sold, or run without their constant involvement. It is not a one-size-fits-all strategy. However, I believe that many of its insights can still apply to social enterprises and non-profit organizations in South Africa.
I’ve also written this for my clients who are overwhelmed and “can’t find the time” to read the book, when this is exactly what they should be doing.
1. Growing large pumpkins
The farmers who strive to grow gargantuan pumpkins follow a replicable approach. They plant the right pumpkin seed in the right soil and provide it with water and other nutrients. As the pumpkins grow, the farmer progressively prunes the vine until only a single pumpkin remains. The farmer attends to any diseases and pests as soon as they appear. All the nutrients and care now go into a single pumpkin, which tends to grow rapidly as a result.
You can easily lose yourself in Google looking at how farmers grow big pumpkins. Our local Checkers and Shoprite sponsors the South African Giant Pumpkin Festival in the Western Cape. Interested entrants are provided with an “Atlantic Seed” – the type of seed required to grow these pumpkins. The 2019 champion weighed 601kg. (I wonder what they taste like?)
2. The Pumpkin Plan for businesses
I’m now going to describe the five themes that emerged for me after reading the book and reviewing my notes. Then I’m going to reflect on how the Pumpkin Plan can be applied to nonprofit organizations and social enterprises.
A. Plant the right seed
The Pumpkin Plan starts with choosing the right seed to plant and nurture – the right good or service to provide to your customers. This must be something your organization is excellent at doing. It must also be something that your customers both need and appreciate, and are willing to pay for.
Mike Michalowicz, the author of The Pumpkin Plan says:
“Don’t waste your time planting seeds that may or may not work out. Plant the seed that you know has the very best chance of making it, and then focus your attention, money, time and other resources on that tight niche…Your giant seed is basically your sweet spot – the place where your best clients and the best part of your business meet. This is the place where your favourite customers are able to derive maximum benefit from the systematized, core processes that drive your business.”
There are three components to identifying this seed:
- First, it must be centred around the “unique offering” that differentiates your organization from others in its sector. It must be something your team enjoys doing and are very good at. In my experience, it takes organizations a while to figure out their unique offering. It must also evolve as the market shifts.
- Second, it must be work that lends itself to systematization, so that your organization can become extremely efficient, scale and break free of “selling hours”. Some of my clients have business models that make this easy to do, while others have needed to rethink how they package their hours into products.
- Finally, it should take into account the type of customer your organization most wants to serve – one who understands, trusts and appreciates you, and can pay you what you deserve. In my experience, this is not something which is easy or straightforward to determine.
B. Focus on your ideal customer
Once you’ve identified the type of customer you most want to work with, then focus all your energy and efforts on those customers (at the expense of the others).
The Pumpkin Plan says:
“If you truly want to pull off this whole entrepreneur thing, you’re going to need awesome clients you really connect with, clients who make you want to go to work in the morning, not hide under the covers. You want clients who have potential, who are open to new ideas, who have the money to pay you what you’re worth, who respect you, who are going places and who want you to be part of it.”
These top customers will then refer you to others like themselves. Since you’ll have more insight into what these customers want, you’ll be able to go and hunt for more of them, and tailor your marketing strategy accordingly.
The Pumpkin Plan focuses on the quality of customers, rather than how many you have:
“Business is not a popularity contest. Don’t worry about having the most clients. Build a business that caters to the best clients…the clients who are the best fit for you.”
The Plan talks about the dangers of continuing to serve the wrong type of customers – something which we have all experienced. A “bad” customer can easily create a nightmare for your organization; it can drain all your resources and creative energy, and undermine you from pursuing the customers you truly want.
“As long as you let these rotting pumpkins stay connected to your vine, you can’t do the work needed to actually grow those good relationships because you’re already too stretched as it is. And even if you aren’t playing the entrepreneur’s five-to-nine game, you can’t devote yourself to everyone, all the time. It’s just impossible. You need time and energy for a deep dive, and you can’t do that if you don’t kill first.”
The bit I’ve struggled with the most, is the need to first prune the “wrong” types of customers, before you go and expand your base of “right” customers. This may seem very risky, especially if your organization has limited financial reserves to enable this pivot. Furthermore, some of your “wrong” customers may be perfectly friendly or even pay you on time – its just that they don’t fit the profile of the customer that is best for the organization you’re trying to create.
The Pumpkin Plan elaborates on this point:
“It’s common for entrepreneurs to reverse this part of the plan, which is a mistake. They think firing clients is too risky, because they’re afraid the better clients will never come. So they reverse the plan, opting to try and get better clients first and then get rid of the crap clients. Reversing the plan doesn’t work because it takes time to cultivate relationships with your top clients and attract new, better clients. And no matter how many appointments you move around and how many energy drinks you guzzle, you do not have the time.”
C. Deliver incredible value
Once you’ve identified the ideal customers in your portfolio, your organization needs to make sure they have the “red carpet treatment”. Figure out how to solve their most pressing and important problems. Provide them with outstanding service.
“And you’re going to have to up your game, wowing customers with your super awesome nurturing skills. Dazzle them with innovation and superior service. Defy their imagination. Offer solutions to their problems and answers to their prayers.”
As we discussed in the previous section, this only works if your organization has been able to let go of your high-maintenance, difficult, unappreciative and unprofitable clients.
The Pumpkin Plan says that by providing this high-level of service to your customers, you’ll be blocking the competition and creating barriers for entry. You’re also preparing your organization to serve similar customers.
“You want to discover all the right things you can do for them, since this will make you significantly better for them than your competition can dream of being. Fortunately, your top clients are a lot alike. It’s a safe bet that they all want something similar, that they will communicate with you in much the same way, that they will share similar expectations.”
D. Systemize your organization
The Pumpkin Plan requires that you build systems to enable your organization to run more smoothly and scale. Otherwise, you’re just selling hours and time.
I’ve previously written about the importance of systems in your organization. See the article: “reduce overwhelm by fine-tuning your organization’s systems”.
This fits with the view that you must strive to work “on your organization” as opposed to “in your organization” – something that “operationally-minded” leaders struggle with:
“You cannot scale your business if that means that you do most (or even some) of the work. Period. In fact, if you want to grow a serious business, a Pumpkin Planned business, it requires that you don’t do any of the work.”
Rather than trying to adopt this perspective, several of my clients have reminisced about when they had just started their organization – when they could do the work themselves and the complexity of running an organization was limited. The Pumpkin Plan addresses this fiction:
“Perhaps you are in one of those traps right now. You can’t find anyone who is as good as you, and you can’t go back to the “good old days” because, let’s be real: there were no good old days. We entrepreneurs just look back at those early days fondly because they seem to have been less complicated. We forget that we killed ourselves every day trying to run the show with little or no help. I know it’s hard to accept that you’re stuck, but you’re hardly alone in this one. It’s super common.”
Finally, here’s another quote from the book which I loved. It revisits the importance of systems in organizations, and how this is central to the leader’s role in their organization. I wholeheartedly agree with this.
“If you’re finally going to stop working for your business, and instead have your business work for you, you must ensure that not one ounce of your deliverable—not one thing that the client experiences—depends on your doing it. When you achieve this, your main job becomes building repeatable systems in order to ensure that every client has the same, the identical experience, every time.”
This quote led to a debate with my colleagues who reviewed the draft of this article. They observed that a leader of a service-based organization may need to be involved in delivering its service to customers. However, I explained that this should be a strategic leadership role (and not an operations-management role). I’ve touched upon this in “leading startups versus mature organizations”.
E. Prune constantly
I’ve written about the importance of making “necessary endings” in your own personal life and in your organization. In that article, the metaphor of “pruning” also arose.
The Pumpkin Plan requires you to trim down the parts of your organization that are not focused on delivering incredible value to your ideal customers. As your business grows, and as circumstances change, so further pruning is always required. This is just part of life.
The Plan says that your bad customers, which you’ve now let go of, had sucked disproportionate resources from your organization to keep them happy.
“Just like bad, rotten pumpkins suck nutrients from good pumpkins and stunt their growth, bad, rotten clients distract you, drain your resources and cost you money. You’re much better off having no clients than bad clients, because at least when you don’t have any clients you can prospect for good ones instead of tailoring, tweaking and twisting to accommodate the needs of the bad ones.”
These resources (or nutrients) may have included additional employees, overheads and project expenses. In my experience, they also take attention and emotional energy, but this cost is often overlooked. The Pumpkin Plan is appropriately ruthless in this regard.
“The beauty of the Pumpkin Plan is that once you kill off the diseased and unfit clients and shift your attention to your most promising clients, you have the opportunity to cut all expenses that don’t serve your top clients—everything from phone lines to parking spaces. It makes cutting expenses so much easier.”
3. Pumpkin Plan for non-profit organizations and social enterprises
It is more difficult to apply the Pumpkin Plan to non-profit organizations and social enterprises since they can serve customers, beneficiaries and donors. Each of these stakeholder groups requires a value exchange. This can make the business models of these organizations very complicated.
Let’s consider the case of Abalobi, a social enterprise that helps local subsistence fishermen to find markets for their catch. Abalobi also supports the governance of local fisheries. It has a cause it serves (e.g. the ecology of local fisheries), beneficiaries (e.g. local subsistence fishermen), customers (e.g. the fisherman, restaurants and government), and several donors.
These stakeholders could be viewed as “customers” because Abalobi provides them with goods and services in return for money, gratitude, impact and influence. The local fishermen would be Abalobi’s most important customer, even though they are not “high value” in the traditional sense.
You can see why it is complex to apply the Pumpkin Plan in the social sector. Hence my fourth rewrite of this section, a month after I’ve started this article.
I’ve reached the conclusion that while certain tactics of the Pumpkin Plan may not be applicable to organizations in the social sector, the overall principles remain valid. The strategies and business models of these organizations can easily become too complex to manage. They can overwhelm leaders and drown organizations.
The leaders of these organizations need to be vigilant and decisive. They must constantly renew their focus, declutter and simplify their organizations, make wise use of their limited resources and refine their products. They must also systemize wherever possible. This will enable them to deliver an efficient, repeatable and scalable experience.
In other words, the basic principles of the Pumpkin Plan still apply, but will need some adaptation to the social sector.
This book is thought-provoking. I’ve read it three times now and referred to my notes on several occasions. I accept that the Pumpkin Plan is designed for businesses. Nevertheless, it resonates with my obsession with focus, necessary endings, minimalism, simplicity and the systematization of organizations. The insights have informed my own consulting business and the strategies of my clients.
Consider the following. What is your organization’s unique ability or superpower? What type of customers and/or beneficiaries do you most want to serve? What endings are overdue in your organization? How can you systemize your work so that it becomes more streamlined and delivers a repeatable and worthwhile experience?
The answers to these questions may not reveal themselves right away. Neither will they be easy to implement. But they will help to create an organization that works for you and your beneficiaries.
In this noisy and cluttered world of ours, our organization’s strategy can easily run amok. I therefore suggest you contemplate growing pumpkins.
Thanks to Andy Simpson (Imani Development) and Philip Anastasiadis for their insightful contributions to this article.