In our first blog of the series, we defined the difference between a growth plan and a growth engine. In that discussion, we defined a growth plan as a singular event that identify future revenue and profit streams and identify capabilities, assets, and competencies the business needs to build to take advantage of future growth opportunities. As we define it however, a growth engine is not an event or a document or a plan, a growth engine is a system of integrated and replicable growth focused processes that support and enable sustained growth performance over a number of years. That blog included a brief questionnaire that helped you assess your company's ability to put a growth engine in place.
Don't get us wrong, growth plans have value. They get the executive team together focused on growing the company—at least during the planning session. A frequent problem however is that everyone leaves the planning session and more often than not, goes back to implementing the close-in, tactical plans for their respective functional areas. Does this sound familiar? The real challenge with building sustainable growth isn’t the plan, it is integrating the growth planning discipline into the daily management “biorhythms” of your business.
In a BCG Henderson Institute article and study posted February 12, 2018, How Vital Companies Think, Act, and Thrive, the authors state, " The ability to continuously develop growth options as the main driver of vitality for a company." They go on to say ...strategy and execution cannot be separated from one another, and to be vital, companies need to build the right capabilities—especially in relation to technology and people. And to that we add replicable process that assess market opportunities and company capabilities in ongoing fashion.
The real challenges aren’t understanding the value of growth to your business--they are about determining where your best growth opportunities are, prioritizing across multiple potential growth opportunities, integrating both shorter- and longer-term growth opportunities into your management processes, and organizing for success and building an ability to tap into new revenue streams consistently and over multiple years.
That’s where we are going to focus with this follow-on article.
The Value of Integrating Short- and Long-term Growth Planning into Your Management Processes
Every business has management processes that they utilize. Some are highly informal, and some are very formal. On the informal end of the spectrum are businesses that meet as management teams on an ad hoc basis. When the need is evident, the executive team meets. Otherwise, there are few regularly scheduled meetings.
On the complete other end of the spectrum are those businesses with a well-developed meeting cadence. These businesses have “biorhythms” which meet the business needs for coordination and collaboration. Often, these businesses are serious adopters of well-defined management disciplines like EOS/Traction.
Just because a management team has a well-established meeting biorhythm, though, does not mean that they are better at identifying and prioritizing growth-related opportunities on a regular periodic basis. The issue is this: short-term business needs and issues always seem to trump longer-term planning discussions. Demands seem to dictate that working in the business is more compelling than working on the business.
Think about all the times when your growth plan was developed and your intentions were right, but you just couldn’t or didn’t have the quality (and quantity) time your team needed to continue to validate your growth opportunities, to track progress on those opportunities, and to refine priorities related to those longer-term revenue and profit streams.
A result of kicking these growth discussions down the road is that they are delayed and pushed out into the future. And, when you find your business needs to accelerate growth, now you are behind where you could have been had these opportunities received regular attention. Your revenues could be stalled out, on a declining year-over-year growth track, or coming up short over and over again against the growth goals you set and your board and owners expected.
The one axiom which summarizes this up so well is this: “The time to grow is when you can, not when you have to.”
Regular attention to your growth agenda, and your portfolio of opportunities, is a best practice.
What Growth Processes Should I Plan For?
There are a series of processes each business opportunity should follow as you develop it. We call this a Stage-Gate process, since each opportunity will proceed through the same series of stages and will continue to the next stage as the executive team continues to support continued development of each opportunity.
STAGE-GATES FOR MANAGING GROWTH PROCESSES
The Stage-Gate approach is powerful because it accomplishes many tasks simultaneously—as knowledge and confidence builds through each stage, risks are identified and mitigated, and investments can be increased as the opportunity becomes more defined and solid. The executive team can halt or accelerate opportunities based on learning at each stage.
We will go deeper in laying out some of the tools to implement a Stage-Gate approach in a follow-on article focusing on growth platforms.
How Best to Integrate Growth Agendas into Management Processes?
If you are an EOS/Traction user or thinking about adopting that management approach, we’ll point you to a recent article we authored on Integrating Horizon Growth into EOS/Traction.
If you are not using Traction, you probably have some of the management processes identified earlier. The same integration type will work for you, that is:
Where to Next?
There are a series of best practices to implementing effective engines of growth in your business, and in the next few weeks we’ll be tackling them one at a time. Here’s what you can expect from a set of four follow-on articles:
Topic: People and Organizational Capabilities
This article will examine developing a healthy organizational growth culture, defining a “growth champion” role, and prioritization of resources needed to support longer-term growth initiatives.
We will focus on building a robust set of enabling tools which fit into the business, adopting and standardizing scorecards, financial models, business cases and business plans, and completing periodic reviews of voice-of-customer VOC, competitive monitoring, and market analyses.
Topic: Roadmap, Results, Metrics, Benefits
This article will focus on effective adoption of best practices, offer a logical sequence to implementation, and discuss building organizational and program maturity.
Please stay tuned for more practical guidance as we bring best practices for implementing engines of growth forward.
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Do you have ideas to share? Are there some topics that you would like us to address? Give us a call or email us and we’ll be happy to chat with you.
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