A young president of a fast growing tech company recently told to me something very wise about growth. He said, “If a company is planning to grow and not just talking about it, then its leadership will build growth related skills separate from their core business. In addition, they will specifically target growth, build an infrastructure to support it, and develop a skill for managing it. Growth will become their other core business. "
The Seven Secrets of Persistent Growth
Conventional wisdom tells us that growing a company is mostly about generating revenue and making a profit. While that is certainly true, it doesn't quite capture the essence of the challenge. The challenge is to shift focus from the business to the customer, and enable the business to increase the number of customer relationships, keep those relationships longer and enhance the value of each. Ultimately, this shift of focus is what fuels revenue, profit and growth.
Of course, growth is easy as long as there are no real competitors attempting to take your customers away. Also, it's easy to grow in an expanding marketplace where demand greatly exceeds supply. But, most of us do not live in a world where these easy dynamics exist. . . for very long.
So, companies that plan to achieve and sustain success make growth a specific objective by consciously employing, “The Seven Secrets of Persistent Growth".
Growth Secret #1 - Develop A Strategy And Execute The Plan
"What business strategy is all about; what distinguishes it from all other kinds of business planning - is, in a word, competitive advantage. Without competitors there would be no need for strategy, for the sole purpose of strategic planning is to enable the company to gain, as effectively as possible, a sustainable edge over its competitors, " Keniche Ohmae, executive, consultant and author.
Growth Secret #2 - Build And Maintain Valued Alliances
"Alliances are generally more powerful (than going it alone) even with a small ally, " Baron Antoine Henri de Jomini, 17th century military strategist.
Growth Secret #3 - Consciously Acquire, Retain and Grow More Profitable Customer Relationships
"In order to sell a product or a service, a company must establish a relationship with the consumer. It must build trust and rapport. It must understand the customer's needs, and it must provide a product that delivers the promised benefits, " Jay Levinson, author of Guerilla Marketing.
Growth Secret #4 - Create Genuine Appeal for Your Product or Service
"The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself, " Peter Drucker, management professor.
Growth Secret #5 - Make Your Offer Accessible to All Who Want It
"Today access has less to do with location than with giving consumers the ability to interact with a company where or when they want, and with minimum interference or hassle, " Fred Crawford, author of The Myth of Excellence.
Growth Secret #6 - Deliver Real Value
"Price is what you pay, value is what you get, " Warren Buffet, CEO of Berkshire Hathaway.
Growth Secret #7 - Align The Outside Perception Of Your Company With Its Inside Reality
"Customer-based measures are important, but they must be translated into measures of what the company must do internally to meet its customers expectations, " Robert S. Kaplan & David P. Norton, authors of “The Balanced Scorecard"
The Seven Secrets to Persistent Growth are not new. They can be found in the words of great thinkers and business men like Sun Tzu, Peter Drucker, Warren Buffett and others. However, just knowing the words won't help you. Translating the words into action is the key.
However, most leaders won't bother to translate the secrets into action. They will be too busy “running the business" to redirect their focus to the customer and build the infrastructure for growth.
Are you too busy “running the business"?
Case In Point: The Spa
Like George Kastanza in that Seinfeld episode, most of us at one time or another have daydreamed of sliding under our desk at work to take a short but sweet vacation from the pressures of the day . Each year throughout the US, millions of people manage to escape to the spa, and without the added career risk of “under-the- desk" napping. A client we'll call Julie, makes it her life's work to provide these pampered time-outs for those that need them.
Julie owned a spa business for 5 years with 4 locations in a rapidly growing city. Her mid-sized company was robust and growing in line with the industry growth rates while affording her a solid mid six-figure income. She was looking to double the size of her business, and felt she could do so without sacrificing her margins. However, because she wanted to grow rapidly she recognized she needed an approach different than the “organic" approach she had used to grow the business to its current state.
So, for this growth opportunity she sought outside assistance to develop a growth strategy and plan before moving forward. Julie assumed she would need to double the number of locations in order to double her projected revenue, and expand into a more expensive part of town to improve her margins. She further assumed it would take her a minimum of four years to open four additional locations and reach her goal of doubling her revenue.
As a part of creating the strategy, a number of analyses were conducted that helped Julie develop a different point of view of her company. A Voice of the Customer Analysis helped her realize that while her spa locations were not in the most upscale parts of town she drew a significant number of her clients from upscale zip codes. Because her prices were already on the high side, a move to a more upscale location would increase her overhead without proportionately increasing her revenue, and significantly erode her already healthy profit margins.
A Performance Tuneup identified an opportunity to emphasize hair services in 2 of her locations where clients wanted the hair services along with the standard spa services. Also, the Performance Tuneup yielded an opportunity to standardize and consolidate basic store procedures, accounting processes, and customer relationship information. A sales analysis and satisfaction analysis helped Julie understand that her products and services could be structured, priced and sold in a way that would yield higher revenue.
The Strategic Plan developed and implemented for Julie enabled her to hit her revenue goal in two years, cutting her estimate in half. The first year involved improving the business based upon the analysis that was conducted. She standardized all operational and accounting processes across all 4 locations, consolidated all of her customer relationship information and made it available to each location, and restructured her products and services so that they could be easily cross-sold an up-sold to her clients.
In addition, she put all of her employees through sales and service training. Finally, she recorded these improvements to use when she would open other locations. The second year Julie opened two additional locations, and because of the standardization and improvements she was able to hit her revenue targets by the year end, in half the time and investment originally forecast.
Plan the work and work the plan. It will save you time and money. Taking the time and investing the resources necessary to fully understand your business can help you to clearly identify where you want to go, and choose the best path to get there. Develop your company strategy. Write it down and share it with your trusted advisors. Review your strategy at least once a year, and ensure that your operational plans and actions are aligned with it.
Leamon A. Crooms III
Strategic Growth Advisors, LLC (http://www.stratgrow.com ) transforms midsize companies into regional and industry leaders by helping them grow more effectively and efficiently than they are growing today. Our unique advantage is that we provide top tier business consulting skills and solutions for the mid-market at a price that is affordable and in a format that works for mid-sized companies.