A common theme from business leaders we talk to is transforming their growth cycle and seeing a step-change in their top-line results. In some cases, these are early-stage companies looking to break out in a larger market. In others, it’s more established firms that desire bigger results. One of the commonalities is helping firms see there is a process to doing this well and it’s not reliant on tactics, such as adding salespeople or putting more money into digital marketing. Those may very well be actions that a business could take, but too often those are where leaders start.
A common mistake we see in businesses that say their transformative growth plans failed is impatience in understanding their true situation. A leader often gets to the point of wanting to change trajectory and has a bias for action – any action. We often hear the comment, let’s experiment and learn on the fly. While we are believers in a culture of experimentation, doing so without a plan is usually a fool’s errand. What often drives these actions are past experiences of adding a business development rep or kicking off a search engine campaign. And while those tactics may have worked elsewhere, do you really know if they are suited for your current market?
At Rand Inc, we are firm believers that you need to quickly evaluate your market, business, and environment. Resist the temptation to fire, ready, aim and invest the time to understand the dynamics of your customers and potential customers. This foundation, while taking time and a small amount of money, will pay off later. The adage, measure twice and cut once is true here and will help keep you from starting over again.
A Process-Driven Approach
Getting to the heart of your current situation, customers and market dynamics is a multi-faceted process that looks at data and qualitative feedback from internal and external customers. We go through an analysis of your current market and customers to better segment current and evolving needs in the market. Further, we prefer to interview current and potential customers to gain greater insights into their buying behaviors and decisions. Finally, a view into adjacent markets and other product categories will give us a view into the opportunities that exist beyond your current sales plan.
Only after this analysis is completed and vetted, do we approach the tactical aspects of your growth plan. If we were to find out that product innovation is the key driver in markets you are trying to expand in, adding sales reps or heavy marketing campaigns may not provide you much business value. Investing in market research and development may be the first place to add. Similarly, if you are looking to expand geographically and have low brand awareness, sales reps in that new territory may be necessary. But unless a plan is devised to help with brand awareness, they are going to struggle to gain traction, and adding sales reps might need to come after an initial marketing push.
Build Your Growth Targets from the Ground Up
One of the other common fails in transformative growth plans is a target that comes with minimal grounding. “We’re going to grow triple the market” or “We expect to have new products that double our growth rates.” While these stretch goals may be attainable in some instances, when they are driven top-down, they often create more friction and a focus on quick execution vs. thoughtful decisions. Much like we shared in our growth budgeting exercise last month, we are a fan of the simple 2 x 2 matrix to look at your transformative growth plans.
By approaching your growth goals in this way, only one of four quadrants is your core business. The other three are components of transformative growth. It also gives you a view of what is realistic and where you need to invest money to drive this growth. Back to our example of doubling our growth through new products, if you only intend to launch two new products next year with a realistic sales target, you may find that you can’t hit this goal until your organization can comfortably launch 4-5 products a year. This simple chart is one of the best ways to bring sales, marketing, and R&D together and ensure alignment for the organization’s goals.
So, if driving transformative growth initiatives is part of your focus for 2022, make sure you are investing time in the actual planning and strategy. Marketing should be a part of this strategic development, not creating a cute slogan or tagline. If you want to learn more and discuss your goals, reach out to me at firstname.lastname@example.org This is an area we are passionate about, and know how important it is to approach this as a Ready-Aim-Fire process to meet and exceed expectations. This month’s videos are all about growth transformation, follow us on LinkedIn for more tips!