Updated: Jul 28, 2020
Everywhere you look, there are coaches, books, consultants, agencies, and trainers telling you they can help you grow. They can give you a process or find your purpose, help you find the right talent, or help you coach the talent you have, fix your e-mail marketing or get you appointments. Often you will see tags like #growthhacker, #herewegrow, and #growthstrategy on their LinkedIn and Twitter posts. The "Growth" industry is vibrant.
The issue I have is that most of these are tactics, execution-oriented. They assume you already have the golden trifecta (right product, in the right market, with much runway for growth). If this is your situation, yes, look at EOS/Traction or Scaling Up as an operating system for your business, yes work with the right people to find and train the right talent, yes optimize your marketing and sales efforts.
The problem is most of the companies I talk to, while they may think they have that golden trifecta, actually do not. More likely, they are in a mature market where single-digit growth is a reality. They are a distant follower in a market that may be growing strong, but all of that growth is going to the leader and maybe a strong challenger. They may have the right solution, but lack focus or full understanding of the value proposition for the customer. In each of these situations, it is time for them to take a step back and think strategically about what they should be doing.
The Elephant in the Room – Unacceptable Failure Rate of Initiatives
It is not that they are not doing things they think should help them grow. Most of them are. The problem is that most of these initiatives do not make a difference. They do not deliver growth.
60% of new product initiatives never make it to market, according to Clayton Christensen, in his book 'The Innovator's Solution." Of the 40% that do make it to market, 40% of them don't even cover their costs. This failure rate means that 76% of all new product initiatives do not drive growth – do not break even. Most are costs that drag profits down.
Those numbers align well with the research that shows that 75% of venture-backed start-ups never return money to their investors - 30-40% lose all of their investor's money (https://www.fastcompany.com/3003827/why-most-venture-backed-companies-fail).
We are building and doing many things - and often doing them better and more efficiently - but based on these numbers, we are not always doing the right things, chasing the opportunities that have the best chance of success.
How does this happen?
Inside Out Companies and Products
One of the most common reasons companies struggle with growth is because they are "Inside Out."
I call this the Field of Dreams approach – "If you build it, they will come." This approach is the practice and belief that because you built something, customers will naturally want it.
Sometimes these are technology or engineering-driven products, building something that is cool or uses a new technology just to use it. Other times they come from a dated understanding of the market or merely a single anecdote. Either way, they did not come from full knowledge and understanding of the market.
These are often the products that end up searching for a market, or more likely failing altogether.
Sales Driven Companies and Products
Another reason companies struggle with growth are they are Sales Driven - they let a large customer, one-off contract commitments, or a sales leader dictate their growth initiatives, not the needs of the market.
An experience I had at aB2B Information company I used to work at exemplifies this approach. A VP of Sales actually said this "If Boeing asked us to sell them forks, and the deal was big enough, we would find a way to sell them forks." Luckily, our leadership never let him put silverware on our roadmap.
The Momentum Trap
A third reason companies struggle with growth is that they let their momentum drive their focus.
Every company is busy just doing the day to day business. 100% of their time and resources are already committed. Some of this work is doing things that are adding no value to customers or the company, it is just momentum—doing what we have always done. The problem is that this momentum work leaves no time actually to do growth initiatives.
At a recent workshop, a CEO of a company that is struggling with growth told me they have a list of 45 ideas of things they could do to drive growth, but they did not have any time to do them.
As a mentor of mine said, "if you keep doing what you're doing, you'll keep getting what you're getting."
The Growth Strategy Mindset
So how do we shift our mindset to be focused on growth?
Early in my career, there was a story in Stephen Covey's Seven Habits of Highly Effective People that resonated with me. An exploration team was cutting its way through a thick forest and making good time until someone climbed up a tree and realized something was wrong.
They called down, "Stop - we are going the wrong way." And someone from down below called back, "But we are making good time."
This story was the first time I understood the difference between leadership and management. Leadership is about going the right way, while management is about making good time.
Growth Strategy is about leadership; it is about providing direction and purpose; it is about knowing and understanding the market. It is about looking at all options and objectively focusing on the ones that have the best chance of success.
Most of these companies who are struggling with growth are good at executing their day-to-day. They have processes and drive for efficiency. The thing is that they lack leadership. They need a Growth Strategy grounded in market knowledge and practical decisions about what and where to focus. They need to start "Doing the Right Things" while continuing to "Do Things Right."
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