3 steps to tackle business growth challenges
Vistage speaker Andrew Brent sees members lean in whenever he talks about profit versus growth. He brings up a scenario many know all too well: Long-term growth plans buckling under pressure to deliver short-term profit projections.
“It’s human nature,” Brent says. “We tend to get driven by what’s close to us, short-term and urgent. For a lot of CEOs, tenure is quite short, so in the back of their minds, it’s ‘forget the next three years. I’ve got to get the next six months right.’”
This leads to executives trying expensive, last-ditch efforts to grow, such as dropping prices or rolling out new promotions, Brent says. These moves, or “spikes,” as he calls, can cause a quick boost, but don’t reach the same level of sustainable growth seen in a brand like Mercedes.
“Growth is the only way companies can sustain profitability in the long term,” says Brent, who runs a London-based consultancy focused on helping clients identify and implement growth strategies. He launched his business after working for a number of blue-chip companies in Europe and Asia, where he was often tasked with finding ways to help businesses grow.
Brent distills his lessons on growth in “The Growth Director’s Secret: Why Businesses Struggle to Grow – And What You Can Do to Change It.” For small and midsize businesses ready to tackle the growth challenge, here are Brent’s top three steps to help gain momentum:
1. Figure out your “differentiated proposition.”
Think value proposition with the added bonus of being singularly unique from all other competitors. But it has to be something that is immediately recognizable to customers.
You must have a reason for customers to say, “That company provides what I want better than anybody else.” If you’ve got that, the customers will come because you’re supplying what they want. And you won’t have to bribe and promote to them. They’ll keep coming, and they’ll pay the price you need them to pay because they value what you’re giving them.
2. Find a growth leader and give them agency.
Typically, companies will look to marketers to develop growth strategies but not give them any influence to change products or switch distribution channels. This situation effectively kills initiatives before they can take effect.
Instead, consider creating a growth director’s role and give that person the ability to influence all aspects of the business as necessary. Your growth director needs to have the ability to go to your product teams and say, “Hey, we need this type of product” or go to your store teams and say, “We need to provide this sort of service.”
3. Focus, focus, focus.
Once companies figure out their growth strategy and how to implement it, they have to stick to that plan — even when other promising ideas pop up. Growth takes years to develop from incremental wins to years-long, sustainable returns and short-term windfalls could potentially derail a business’ overall strategy.
Every small business CEO should have this quote, from Apple founder Steve Jobs, pinned over their desk: “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are.”
Once you’ve agreed your focus is delivering your differentiated proposition to your customers, you can be sure tomorrow one of your team members will be in your office saying, “I had this great new idea” or “our competitor has done something.” Stay focused on your core proposition and be prepared to say no to all those good ideas. That focus is real wisdom for small companies and very hard to achieve.
Category: Business Growth & Strategy
Tags: growth plan, profitability