In systems thinking, a stock represents what accumulates over time, while a flow indicates what the causes that accumulation to change.
Revenue functions as a stock: it builds through successful execution of a plan.
When revenue decreases, such as during a miss, the common instinct is to increase the flow: more pipeline, more activity, and more pressure on the team managing the output.
However, this approach overlooks a key point: the flow is not the true leverage point.
Instead, the underlying beliefs that influence the flow are.
Every belief that your revenue plan relies on acts as a valve controlling the flow.
When these beliefs are held, the flow proceeds as intended, but when they drift, the valve partially closes, causing the revenue to decline and the stock to drain.
Since these valves are invisible, the typical response is to push more through the open routes, leaving the closed valves unexamined.
Correcting the belief gap involves identifying which valve has shifted and resetting it before the stock drops significantly.
By the time the decline is visible in the stock, the valve has been partially closed for up to 4 months.
