This week, Wall Street Journal Leadership section had articles on different strategies for company growth – vertical integration, acquisition, product extension, franchising, etc.
These strategic and business model decisions are important. But how does an organization come to those decisions? And once decided, how is the company run? Ultimately, I believe growth is determined by the people you hire, the processes they develop, and culture you choose to build and sustain.
So that got me thinking about key ingredients I believe help grow a company...
Push the organization with big vision. Growth requires thinking big, then execute like crazy. Achievement is 10% inspiration and 90% perspiration. But that 10% is key, otherwise the 90% is lost, directionless, and unproductive. I believe growth comes from pursuing a worthwhile plan with measurable rigor. (See 12 Ideas to Sell Ideas, Need help communicating vision? See my father)
Account for big goals – Every organization sets goals, but sometimes they aren’t big, and sometimes they forget to write them down! A big vision is achieved by accomplishing big objectives and goals. That’s all execution really is – your organization’s ability to accomplish (see Execution Principles) . And the best ingredient for that is measurement and accountability, at all levels (see The Metrics Foundation). First, objectives and goals must be understood, measurable, actionable. They must have an owner and a due date. They must be presented and reviewed regularly (i.e. Senior Management operations reviews). And senior management must use bark and bite to those who are accountable to meet these goals. You want to achieve the feeling in your company that “you don’t want to miss a date or a forecast in this place.” (See Greyhound Goals and Workback Waterfall)
Seek out new ideas – First, invite left AND right-brained people into your organization. You need both perspectives to invent creative solutions, find hidden connections, new models, analyze data for discoveries, and explore parallel industries for new methods. Henry Ford could not have grown faster than everyone else had he not borrowed the division of labor manufacturing line concept from a meat packing plant. Walgreens could not have grown as fast had they not changed their approach to increased convenience instead of big stores, big ticket items. Southwest could not have grown had they not reinvented airline service and the hub-and-spoke approach. (See Getting the Right Ideas, Making a Marketing Discovery and The Imitation Age)
Show wins along the way. Share each accomplishment, milestone, project completion, return on investment. This sharing drives growth in two ways: 1) It motivates the people driving those accomplishments (i.e. growth) to drive more. 2) Success and ROI predictiveness breeds confidence, fueling investment for further growth. Sort of a ‘circle of life’ concept I’ll write about another time. (See Tracking Accomplishments)
Ignore distractions – Startups taught me one big lesson… we must focus! In one example -- imagine launching 5 web-based telecommunication products, with 10 partners, internationally. Still, very little revenue. Before we knew who we were, how were we different, the validity of our business model…lo and behold, we were out of money! In an increasingly competitive environment, growth comes from being great at one thing at a time (recommend reading: Purple Cow and Focus). Succeed at one thing that you know customers need (there’s an oversupply in this economy). That takes focus – focus on the customer and focus on what you choose to do better than anybody. Did I mention focus? (See 10 Questions for Effective Business Planning and Return on Churn)
Ownership must be clear. This is similar to accountability, but slightly different. Inside almost every motivated corporate professional is a frustrated entrepreneur. Entrepreneurs like to build and own their work. They are achievement-oriented and take pride in results. Feed these engines with premium fuel by assigning ownership. Recognition is the number one motivator. Especially at lower levels, you unleash powerful output by clearly defining roles and responsibilities. At higher levels with greater ambiguity, give managers ownership of a key business metrics. When a company wants a segment to grow, they create a new P&L division (= ownership). Then give those people autonomy and authority to work across groups to drive that revenue past the forecast!
Neutralize negativity – “There is no such thing here as we’re not going to make the forecast.” That’s the attitude of a sustainable growth company. The question is never, “Are we going to make it” and the answer is never “Here’s why we can’t”. The question is “What do you need to make it” and the answer is “here’s how we can”. (See Cookbook for a Business Recovery)
Oh, there's one more. A bonus ingredient, number 8. And it may be one of the most important ingredients because it is the spirit behind growth. And, it’s already up there. Do you see it? Read the first letter of each of the 7 ingredients…
p.s. Most growth companies don’t grow quickly without sustaining some damage. Consider how to avoid road blocks and road bumps along the way. See Dando’s Top 10 Watch List for Growing Companies.