Growth Insights for CEOs

A Bullet Train to Profitable Growth: Four Questions to Ask Now

Posted by Gary Fassak


In Japan, the Shinkansen Bullet Trains have carried more than 10 billion passengers, through one of the most densely populated regions in the world, since 1964. In that 53-year span, there have been ZERO fatal accidents on the railroad.  How is this unblemished safety record possible, given the high speed, high stakes environment in which the trains operate?

There are many things that drive safety on the Shinkansen, but one of them is called “shisa kanko,” or “pointing and calling.” This technique requires the engineer to align every major action they take with the strategy, or procedures, required to run a safe railroad. 

For example, if the speed limit changes, the engineer points to the speed limit sign, says the speed number aloud, then points to the internal digit speed, and says it aloud again. The standard – the speed limit – is compared to what is actually happening on the ground, on a continuous basis. This seems ridiculously simple -- yet the technique makes sure that the methods of running the railroad (the strategy) are always aligned with the actions being taken (the execution). 

As CEOs, there’s a lesson to be learned from your colleagues at Japan’s high-speed railroad -- one that is quite applicable to your own enterprise. Right now, driving profitable top-line growth at your company is of the utmost importance, every day. “Shisa kanko” can be a great discipline in making sure your company’s growth strategy – the way you have decided to grow your company -- is aligned with your process of execution, or what is actually happening on the ground.

But it’s not easy to achieve this strategy/execution alignment. Quite often, the pace of your day-to-day business operations, along with the sheer energy needed to make the 101 decisions required to move forward every day, can crowd out strategic discipline. Or, over time, individual projects are added that start reducing the single-minded focus of an effective strategy. Or, maybe you simply haven’t examined this strategic-executional alignment in awhile, as the company has grown and evolved. 

Allowed to persist, this condition can cause things to go awry. One example I personally observed was with a business franchise representing a global brand name, which had undertaken the task of building an entirely new bricks-and-mortar location at great expense. The new building was magnificent, with high quality materials, and a super-premium appearance designed to target consumers of that brand. The only problem was that the brand did not stand for super premium – it stood for advanced technology that also happened to be premium priced. The result is the execution was misaligned with the brand strategy, forcing the company to later remodel the location, at considerable expense. 

If only the company had practiced shisa kanko – comparing construction of the new building (execution) with the brand positioning (strategy) to ensure alignment, they would have saved considerable time and expense.

Here are a few questions to ask to start practicing “shisa kanko” in your company:

  1. Do you have a growth strategy? Can you explain in one sentence how your company is going to grow? Will it be by building share in your existing market space? If so, how will that be achieved at profitable margins? Is your existing market space growing organically so you can invest with a good ROI, or is it declining -- which means you will need to find an adjacent, more rapidly growing space?
  2. Do you have metrics that help you gauge whether the strategy is working? If the strategy is to build share in the existing space, has your share increased profitably? If it has, that’s a great indication that you are on the right path. If it hasn’t, maybe it’s time to take a second look, and make sure the growth focus is aimed in the right direction.
  3. Do you perform a marketing audit at annual plan time? Most planning processes start with the financial objectives and budgets. That’s fine, and key to running an effective company. How about adding a step just before that, to evaluate how the strategy is working, and to make adjustments in next year’s plan based on what you have learned during the past year.
  4. Do you have the capability to execute the strategy? It is not unusual for a company to identify a growth strategy – such as selling a second category to their existing customers – and talk about it, but not force action on it by creating specific, focused internal project resources, metrics and reviews. To get started, stop talking about it, and pick one action to move forward.

Sir Winston Churchill once said that “however beautiful the strategy, you should occasionally look at the results.” Practicing shisa kanko might be a way to make sure that the strategy you have worked so hard on is actually getting practiced on the ground, and paying off in profitable growth for your company.

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Topics: CEO Business Strategy, Business Growth Strategy, Growing Market Share, Revenue Growth

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