10 Paths to Growth

An in­no­va­tion ex­pert de­scribes 10 proven paths to growth for a fast-chang­ing busi­ness en­vi­ron­ment.

Rotman Management Magazine - - FRONT PAGE - In­ter­view by Karen Chris­tensen

How would you de­fine ‘Growth IQ’?

Growth IQ is a holis­tic ap­proach to find­ing the path to growth for an or­ga­ni­za­tion, based on three in­puts: the mar­ket con­text, the right com­bi­na­tion of el­e­ments and the se­quenc­ing of your ac­tions. Your con­text in­cludes cur­rent so­cial and eco­nomic con­di­tions, your ex­ist­ing prod­uct port­fo­lio and the com­pet­i­tive land­scape. The right com­bi­na­tion is about se­lect­ing key ac­tions and ini­tia­tives that — when done to­gether — will pos­i­tively in­flu­ence out­comes; and se­quenc­ing is the act of as­sign­ing pri­or­ity, or­der and tim­ing to those ac­tions. A com­pany might try to du­pli­cate the vis­i­ble el­e­ments of a ri­val’s growth strat­egy, but it is rarely able to fig­ure out the com­bi­na­tion and se­quenc­ing that led it to suc­ceed.

You have iden­ti­fied 10 paths to growth — three of which re­volve around cus­tomers. Please de­scribe them.

If you look at the most suc­cess­ful growth sto­ries, one com­mon theme is ‘in­no­va­tive ways of deal­ing with and en­gag­ing with cus­tomers’. That’s why Cus­tomer Ex­pe­ri­ence is the first path on my list — and it should serve as the foun­da­tion for all the other paths. If com­pa­nies aren’t al­most ma­ni­a­cally

fo­cused on what peo­ple value, they might ac­quire cus­tomers once and never sell to them again.

A sec­ond path is Cus­tomer-base Pen­e­tra­tion, which is all about min­ing the ‘gold’ that you al­ready have. It costs six to seven times more to ac­quire a new cus­tomer than to re­tain an ex­ist­ing one — yet many com­pa­nies get com­pletely caught up in ac­quir­ing new cus­tomers and for­get about the ones they al­ready have and how they can con­tinue to de­liver com­pelling value to them.

Cus­tomer and Prod­uct Di­ver­si­fi­ca­tion is a third path to growth whereby you in­crease the num­ber of things that you sell to cus­tomers. Say you used to sell dough­nuts, and you de­cide to start sell­ing dough­nuts and cof­fee; or you used to sell run­ning shoes and you de­cide to start sell­ing shoes and run­ning ap­parel. You’re ba­si­cally ex­pand­ing the foot­print of the prod­ucts you of­fer. The com­mon­al­ity of th­ese three paths is that the cus­tomer lies at the cen­tre of each and acts as the ‘True North’ for ev­ery de­ci­sion you make.

Op­ti­mize Sales is an­other path to growth. What are some of the keys to achiev­ing this?

Com­pa­nies of­ten be­lieve that to im­prove sales, they need to in­vest in a new CRM ap­pli­ca­tion or some new mar­ket­ing technology. But I would ad­vise peo­ple to step back from fo­cus­ing on technology and ask ques­tions like, Do we ac­tu­ally have a peo­ple or process prob­lem and not a ‘sys­tems’ prob­lem? Are we us­ing the right sales and mar­ket cov­er­age model? Are we en­abling our sales peo­ple to be as pro­duc­tive as they can be? Re­search shows that 50 to 60 per cent of a sales­per­son’s time is ac­tu­ally spent on non-sales ac­tiv­ity — which I think ev­ery­one would agree is far from op­ti­mal.

Be­fore you try to im­prove sales per­for­mance with some kind of ex­ter­nal in­put — whether it be technology, ad­di­tional sales hires or a change to your brand strat­egy — do an in­ven­tory of the things you are cur­rently do­ing with the re­sources you al­ready have. In my ex­pe­ri­ence, you may find that you can im­prove quota at­tain­ment by two-to-five per cent just by op­ti­miz­ing what you’re al­ready do­ing, which in a large sales or­ga­ni­za­tion can de­liver sig­nif­i­cant re­turns.

79 per cent of con­sumers pre­fer to pur­chase prod­ucts from a com­pany that op­er­ates with a so­cial pur­pose.

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