In business, many believe they know what growth looks like and how to achieve it; the problem is that most don’t. There are a lot of mindsets and assumptions around business growth that render the efforts of many businesses futile. Leaders should step away from the accepted norm, bring their team together, deconstruct the group’s think on growth, and reconstruct their entire approach to align with strategy and value.
Active Knowledge Question:
How do you know your growth is on track to build an enduring business?
Profit Is Not The Answer
Suppose your growth strategy is about driving up revenue while lowering costs to achieve budgets, deliver on profit forecasts, and the accompanying bonuses and dividends for the current cycle. In my view, such outcomes are not growth but actions to achieve short-term outcomes.
Many businesses operate on this immediate result imperative, driving to achieve one short-term result and then chasing another. But, unfortunately, a profit-first motive rarely, if ever, delivers longer-term growth that builds enduring strength and performance.
Profit is an outcome, not a catalyst, and while many businesses believe they are in the business of making profits, such an approach leaves untapped potential on the table. And the prospective profits that would come along with it.
Any growth strategy should commence with a clear image of what you seek to build and then the outcomes you seek will be delivered from what you have built. It represents an enduring asset upon which to compound all efforts. To continually chase outcomes is to submit your business and all its people to continual repetitive effort rather than building the engine that will produce the desired results.
Growth must always be strategic and be a source of building better, not just bigger.
Strategic growth is ultimately about building the engine that will underpin the capability of your business to outcompete anyone else in your chosen marketplace by being able to deliver a greater customer value.
Growth can come in many shapes and sizes, and leaders should tailor their growth plans to their specific needs. Those needs should be crafted around purpose. Purpose, of course, is the reason for a business’s existence which again should only be expressed in the form of value in meeting customer needs. If crafted well, an expression of a business’s purpose in customer needs will create a window through which endless opportunities for growth may be discovered.
A well-expressed purpose enables the creation of an image of what you seek to build. And from this image, the journey towards its creation can be clearly mapped, and a growth strategy can be developed and delivered. Of course, the market in which you have chosen to compete will constantly be changing and evolving, and therefore your growth strategy will also be continuously emerging as you understand your market. But the destination of your journey, “your vision-your quest”, does not change and you are continuously building and compounding on all that has gone before so there is no wasted effort.
Strategic growth is selective, deliberate, wastes no effort and is always building the business you have crafted to fulfil the purpose for which it exists and to achieve its quest.
Ebbs And Flows
Without growth, there is no movement, and without movement, there can only be decline. Holding on to the past and repeating what has always been done before will only seed decline and failure.
Constant activity chasing one short-term result after another will also only lead to fatigue and again decline. Growth must always be building on what has gone before so as to result in no wasted activity and the benefit of compounding. This is where strategy allows all efforts to be focused and purposeful.
There will be ebbs and flows that leadership must recognise and respond to:
- There are seasons to expand, to rest and to restore.
- There must be balance in the various shapes and sizes of growth activity otherwise, aspects of your business will become worn out, and imbalance will only result in decline.
- Maturity must never be allowed to become too settled otherwise, it will also seed decline. Opportunity must always be present to refresh maturity in services, products and businesses.
Can You See It Clearly?
If you can’t see it clearly, you will not be able to describe it succinctly, and you will be unable to map the journey in building it. What business are you seeking to build? Describe it in detail.
A clear purpose founded in customer needs allows you to see and imagine not only today but also tomorrow. It allows you to search out and recognise the impact and openings that change brings about. From this view, you can craft your compelling vision (your quest) that you are calling for everyone to join, and you can map your journey and orienteer your way through change.
Sitting at your desk and looking at the forecast profit result will not allow you to see the future. Turning your attention to the tangible and intangible assets that you believe deliver your profit result is not much better. You must lift your head up and look well ahead so you can steer a smooth course to your horizon, being the summit, your current imagination allows you to see and describe.
Focus On The Catalysts
The source of the competitive strength in your business rests entirely in the combined talent and effort of every single person working within and with your business. Any growth efforts must muster this core strength and direct it in accordance with the purpose you have established for your business.
In partnership with purpose is motive, and that motive must be carefully calibrated to the single effort of competing. Competing against yourself to bring the full potential within your business to the forefront and applied in delivering greater value to your customers in meeting their needs.
To make or allow profit to become the motive in your business is to only disperse and neutralise the competitive strength that might have existed.
There is a competitive engine in your business that sets the ceiling and floor to its competitive strength and therefore performance and profit, in your business. It operates 24/7/365 whether you are aware of it or not.
It is the originating source of everything that happens in your business — good and bad. It will enable or disenable growth depending on how smoothly it is running. There are three parts to this engine encompassing its ten agents:
- Purpose and Motive
- Relationships (Employees)
- Customer Focus
- Strategy-Competitive Posture
Ultimately it will be the ability of leadership to bring these agents into alignment and right character that will determine the strength of this competitive engine and set the ceiling and floor to performance, success and profit.
Any growth activity must be directed to improving the value delivered to customers and be strategic in its nature, meaning it is stepping the business further along in its purpose-led journey toward completing its quest. The performance of the business’s competitive engine will determine the strength and speed of this journey.
An entirely new level of performance.
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All the best in the success of your business,