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In cycling, the gold standard performance metric used to measure a rider’s performance - especially when going uphill - is power-to-weight ratio. It’s simple - take the watts you generate (your power) and divide it by your weight. The higher the ratio, the better your performance.
In business, the same principle applies.
Think of Gross Profit as your power, and Operating Expenses as your weight.
When the economy is smooth and flat, a little extra weight might not slow you down. But when you start climbing - trying to scale your business, enter a new market, or weather a downturn - every unnecessary kilo starts to hold you back.
The Power You Generate (Gross Profit)
Power is what propels you forward. In business terms, this is your gross profit - the revenue left over after the direct costs of making your product or delivering your service.
Boosting this number by:
- Increase prices without losing unit sales
- Improve your margins through operational effectiveness
- Deliver more value to your customer with the same effort
More power = more capacity to ride faster.
The Weight You Carry (Expenses)
Weight slows you down - especially when you’re going uphill. In your business, this is your operating expenses: payroll, rent, subscriptions, consultants, marketing, travel, and everything else that adds mass.
Adding weight will help you generate more power. But too much - especially if it grows faster than your gross profit - makes climbing significantly harder.
That above chart shows Shimano's Gross Profit to Operating Expenses from 2020 to 2024. Notice the bump in Gross Profit during Covid and how it's dropped since then.
The Climb is Inevitable
When running a growing business, you’re either climbing now or preparing to.
You’re adding people. Entering new markets. Investing in systems. Responding to competitive pressure. The road won’t stay flat forever.
This is why your power-to-weight ratio matters.
Just like in cycling, it’s not about raw size. It’s about efficiency.
How much output can you generate for every dollar of operating weight?
What Can You Do?
Here are three ways to improve your business power-to-weight ratio:
- Audit your weight.
Look at every line of your operating expenses. What’s essential? What’s nice to have? What’s legacy weight you’re still carrying from the past but no longer serving you? - Increase your power.
Focus on your gross profit. What can you do to grow revenue (e.g., is time for a price increase)? What can you do to reduce your Cost of Goods Sold (e.g., become more efficient in making the product or delivering the service)? - Stay lean on the way up.
Growth doesn’t have to mean bloated. Be disciplined about hires. Be ruthless about ROI. Be clear on what adds power and what just adds weight.
Another great tool is the EOS tool called the 8 Cash Flow Drivers that I teach my clients.
Final Thought
Pro cyclists don’t add weight unless it helps them generate more power.
Neither should your business.
As you gear up for your next climb—whether it’s growth, change, or competition - focus on your power-to-weight ratio.
Bonus: The DATA Workshop
This post was inspired by a conversation I had with fellow EOS Implementer, Mark Stanley, who literally wrote the book on data. His book is called Data and it's pure awesome sauce.
The Data Workshop teaches the Gross Profit to Operating Expense concept in more detail and will help you harness your numbers and go from uncertain to unstoppable.
It's a full-day, expert-guided Data Workshop designed to help you master the EOS Data Component and transform how you run your business. Walk away with powerful Scorecards, actionable measurables, and a clear plan to drive better decisions, accountability, and more cash flow. This hands-on experience will give you clarity, confidence, and control—so you can predict outcomes, eliminate surprises, and get exactly what you want from your business. Perfect for growth-driven leaders ready to harness their numbers and become truly unstoppable.
Coming to Toronto on September 26, 2025 (9:00 am - 5:00 pm)
Find an event in your city here
Are you a cyclist interested in learning more about Power-to-Weight? Here's a video from my friends at GCN explaining the concept.
If you want to talk operational excellence in cycling or business... please reach out to me!
About EOS
EOS is a simple, complete and proven system for running a truly great organization. As an EOS Implementer, I help my clients create organizational alignment, execute with accountability and discipline, and work together as a healthy team.