Over the last few weeks, many people have asked me where they can read more on some perspectives I had shared on growth. This post is an attempt to consolidate at one place the earlier write-ups on growth. This series may be of interest to all growth custodians and growth enablers within an organization.
Do share with us your thoughts on growth!
Happy Reading! Happy Thinking!
Most entrepreneurs do what most MBA’s do – think about their marketing by following the STP route namely – Segment, Target and Position! The trouble with this approach is that the method is built for existing large enterprises. They are the ones who already have buyers, who already have a sales force, who already have a marketing and PR team, who have product recognition if not brand recognition, who already have the cash and wherewithal to withstand cash flow problems for a while!! But most early stage bootstrapped entrepreneurs don’t have most of the above luxuries (almost none). So the extrapolation of this functional approach does not work. Many entrepreneurs don’t get this because they are not trained to be marketing / sales people – but they simply have to be! But rarely have I come across an entrepreneur who has spent time picking up sales and marketing knowledge, let alone talent. So when I started working with small businesses I realized the need for an alternative solution. Here is a quick look at it.
For entrepreneurs I have always found, it works best the other way. Yes! Turn it right on its head! First figure out who is your ideal customer? What are his/her characteristics? Where will you find them? Where do they aggregate? How can I reach those little aggregation points in my immediate vicinity? Are there more such groups? Keep expanding the size of your serviceable market as you gain more and more over. By approaching this way the entrepreneur is always in control of his addressable market – he / she is always servicing customer and winning them over. Though the approach seems pretty simple, it works and works every time. It brings control on cash flow. It brings effective cost controlled advertising. It enables entrepreneurs always keep an eye on scaling. This is also an easy way of planning sales and marketing as an extension of the business modeling exercise. Since the growth of a firm is high, redrawing the business model and hence your sales and marketing plan becomes a repeated exercise. They go hand-in-hand.
Strong businesses are built on fundamentals, strong fundamentals. And strong fundamentals are always a result of simple thinking!
Almost every business leader / entrepreneur worth the name is busy trying to get things back to normal. They are all working harder than usual, managing people who are more demanding than usual, handling situations that are tougher than usual, marshaling and juicing out resources more than usual. In this process one thing that the leader does not want to let go is the image of being the ‘good man’. Not sure if this is a cultural thing in India! But this is almost natural in Indian Leaders!
Objectivity today seems to be ebbing away to lower and lower levels. No leader wants to objectively assess the business and its current state. They all want to keep the fairly obvious problems under the carpet, hoping they will disappear by themselves – somehow magically! In the meantime because of the lack of objectivity leaders are forced to find symptoms that are conveniently addressable without toppling the cart too much. In fact during these times maintaining the status quo seems to be the order of the day. Initiatives are more around improving marketing collateral, re-positioning the same product or service, greater networking and repairing old relationships. Nobody wants to accept the situation as is and aim at using the challenge as an early warning towards sickness! If only one acknowledges the challenge, can they start working on relooking at health of the enterprise. For this, one has to first answer the most fundamental question in strategy – “what’s going on here?”
This is not convenient! This is not an easy choice! This could put some products on the sledge! This could make the institution leaner! But it could also make the institution healthier! It is the forte of bold leaders, the entrepreneurial leaders to make tough choices and avoid comforting conveniences. Are you such a leader? Wherever you are – get out on the scene, make the choices and you will make yourself visible. Your business and the world needs more of such leaders!
This is the season for organizations to think about their coming financial year. Considering today’s social and economical climate, I will be surprised if there are companies that aren’t doing anything about their annual plans. Though my teaching and consulting engagements gets me to be present at some of the senior management retreats or offsite annual planning, I find very few to truly fall under the category of what they call themselves – “Strategic Planning Exercise”
While most CEOs seek to create strategies at these meets, most often it ends up in one of the following:
- Visioning – Much of the time is spent in creating a catchy slogan of a desirous future. This is followed by the efforts to make as many people buy into it.
- Performance Review and forecasting – Lot of effort goes in trying to figure what has fallen short and how to make up in the coming year. The reasons are very often created to justify performance. There is lot of change in the organization with each year that passes and the one that comes by. A host of new measures are introduced with the hope that the organization will look better with them.
- Divisional budget Review and rollout: A typical consensus driven approach to make the overall plan gain commitment from the individual business unit heads. The individual goals are collected and added to create the institutional goals. This is a very passive way of setting the yearly targets.
- Ambitious BHAGs. This is usually the more aggressive and positive view of the planning exercise. Unfortunately many times what is thought of as BHAG is not really a BHAG but actually Big Hairy Audacious Statements of how one would like the future to be.
While each of the above tools/approaches have their very specific role in the organizational context – none of these will result in a strategy for the organization. Planning is not strategizing. Goal setting is not planning. Then what is strategizing? I shall soon post my views on what I consider as strategy and strategising.
So the next time you conduct a senior management retreat, an annual planning exercise or a strategic offsite, you may want to rethink what you actually want to get out of the exercise. And use the right tools, else you will be wanting something but getting something else!
Everything that needs to be effective has to have an underlying process that is designed and thought of. So should growth.
After having shared with you aspects of growth that travelled with me this week, I would like to place in front of you what I see as a possible process map that we may want to take for our growth journey. The journey should be undertaken in four key stages. Desiring, Planning, Organizing and Measuring.
In the ‘Desiring for Growth’ stage we identify, define and refine the growth motivator (not motivators). We as individuals and as team spend time and effort to understand the ‘WHY’ of our growth journey. This not only sets a common purpose, growth goals etc but serves as a channeliser for our subsequent efforts. This is the key to creating organizational alignment.
In the ‘Planning for Growth’ stage, we step down from wanting to grow to drawing of a more concrete action plan. This starts with an objective assessment our current internal capabilities, our expansion capability (resource elasticity), the steps that we would be taking at tactical and strategic levels, assessing resource requirements for each step and the plan for garnering these resources
The third and the most often ignored phase is the ‘Organizing for Growth’ stage. Very often once you have decided where you want to go, with very little planning, the actions are kick-started. And once you start actually growing, the pressure that it exerts on your already resource constrained current scenario – causes you to either burst at your seams or give up in frustration. Organizing for growth involves you to consolidate, restructure and prepare yourself to welcome and absorb all the demands that the act of ‘Growing’ is going to place on you.
In the ‘Measuring Growth’ stage, you constantly monitor the pre-decided vital parameters that confirm you are growing and growing in the proper direction.
I have enclosed as an image a slide which will give you some insights into key questions that can help you understand and execute these stages in your growth journey,
For many of us growth is linear. We grow tall, we make more money, we earn more, we have grown from 3% market share to 10% etc But is growth linear?
In my humble opinion, Growth is NOT linear. It is not a straight line that can be extrapolated. Growth in its true essence is spiral. It involves aspects of expansion and consolidation.
The phase of consolidation is very important from two key perspectives. Consolidation, first gives us a breather to view the panorama from our new vantage point. It allows us to take in the scenario from our new position and thereby helping us from being surprised by sudden dynamics.
Consolidation also is a time for preparation. Preparation for taking the next leap(expansion). It allows us to organize and structure ourselves to support the newer dimension we are growing into as a firm.
In the absence of consolidation, we will find ourselves overshooting our internal capabilities Thereby, creating a very weak structure, liable of being toppled any minute.
So as leaders planning growth of our firm, and as individuals who are planning personal growth – it is necessary we ensure we have spent enough time and thought in consolidation
This sounds like a stupid question. Do you need a particular reason to grow? Do you even have a choice? On the surface the cry of opposition is loud and seemingly logical. However none of this can drown the importance of this question.
Let us assume you are an artiste and this question was asked to you. ‘Why do YOU want to Grow?’ – your answer maybe ‘So that I can play better music, paint better or sculpt better’. Then the effort that you will take to grow; will have to be in taking in inputs that will help you to play better music, paint better pictures and sculpt better.
However let us say you ask this to a manager of the music company, in all probability he will tell you the reason for him wanting to grow is to capture 20% of market share in Tamil Pop Music. Then the actions he has to do would be entirely different and not necessarily in the lines of making his singers sing better.
An artiste who says she wants to capture 20% of market share of listeners and a business man who says he wants to enable his singers realize their singing potential – are in all likeliness going to be working with highly conflicting and contradictory forces internally.
Similarly if a social organization is going to work on any aspect other than impact as its growth motivator and a commercially inclined organization forgets to put profit and value to its shareholder as its motivator for growth – their growth journey is going to be one of internal turmoil (despite external success)
Many times we do not spend time to define the’ WHY’ of our wanting to grow. We don’t know whether we want to grow to become best product creators, we want to grow to make profits or we want to grow for becoming the best place to work etc. When you and your team are not sure of WHY you want to grow – every time you take a step someone is going to raise a question on whether it is the right step. This will slow you down and eventually get you to a stop.
So to continue to grow, you need to have a strong WHY first!
What started this Monday as sharing of an experience, led itself into a stream of thoughts and possibilities that I have been sharing over the last four days. The one you are reading is also an extension in the same line of thinking and also its culmination.
Yesterday’s blog discussed some thoughts around capitalizing the ‘Thrill of First’ of our customers. But what happens to the majority of our customers who have been with us for a long time? With many of them our business may have established a certain level of comfort and along with it a mutual plane of expectation and tolerance. At some point this could degenerate into ‘Rot Of Routine’.
Those of us in business long enough would have invariably experienced the ‘yanking of the carpet’. Just because you have been with your customer for a long period of time, does not guarantee immunity against an ouster by a stranger. Most firms live in the fear of upcoming and interesting competition, which can change the level of the playing field overnight.
Some of the questions given below and thoughts in those lines could help us overcome such uncertainties and fears – by channelizing our efforts in the right directions:
Do you consider yourself a part of your customer’s business growth? What are the steps that your firm is taking to keep the freshness alive in the relationship? Is your customer seeing visible efforts taken by you to change yourself to cater to his changing scenario? Is he seeing your organization and its competencies evolve to measure up to his future challenges? Can he see you think ahead for him? Can he see your involvement in his Is he involved enough in your growth journey? How responsible is he feeling towards your growth?
There are many theories and techniques professed in the literature of customer relationship management, sales, strategy and innovation – that talk about the why and how of intensely engaging with customers. But according to me the simplest way is to be genuinely interested in your customer’s growth at the intention level and display commitment to the common cause of his firm’s growth through your actions!
What comes to your mind when you think of these company names:
Shree Mithai – Badam Milk!
Shree Krishna Sweets – Mysore Pak!
Nalli – Silk Sarees!
Does this mean these companies don’t make or sell other goods? Absolutely NOT! But these successful small businesses have built a niche for themselves – something they can be best at & keep being best at! While all other products around this core item or adjacencies as they are called are many times profitable; these companies have made a name and in most cases a fortune selling that one core item really well.
There is no doubt that everyone wants to grow and grow at the fastest possible rate and at many times your core business or core product may not suffice. But then it is only the focus around the core product – that remains still and helps people (all stakeholders); employees, investor, regulatory bodies, Government, society at large know and remember who you are.
So should it not be essential for each one of us to identify and evolve what that one core product or service is in our business? And more importantly keep it in our focus. And this is the role of Strategy!