Every CEO I talk to tells me that they are after new growth for their business. But, over my 16 years of consulting with dozens of different businesses, I’ve learned that the leaders of higher-growth businesses have a different ‘mindset’ – and generate different behaviours and disciplines – from those leading lower-growth organisations.
Critically, it’s not enough simply to ‘raise the bar’, set stretching goals and manage performance strictly. These behaviours are necessary, but not sufficient. I have identified five further behaviours that higher-growth businesses pursue that are far harder to spot in their lower-growth rivals.
1. First Realise That Nothing Fails Like Success
Kodak didn’t fail because they’re bad at what they do, but because they’re great at what they do. It’s just that what they’re great at can quickly become irrelevant in fast-changing, chaotic markets. In Kodak’s case, the company’s pre-eminence in chemical film processing meant that it was too slow in anticipating and reacting to the rise in digital photography.
Kodak is not alone. The list of companies that have failed or struggled because of their inability to adapt to changing markets is endless. Companies including Olivetti, HMV, Woolworths, The Gap, Blockbuster, Nokia and RIM immediately come to mind.
Andy Grove, the former CEO of Intel, once wrote a book called Only The Paranoid Survive, and so while you should be maximising your company’s existing success, you should also be actively developing new ideas and options for future growth. I was recently speaking with a CEO client who told me that he and his executive team had decided to spend 80% of their time managing current year performance, 15% developing new growth ideas that will deliver in the next 2-3 years, and 5% on initiatives that won’t bear fruit for more than 3 years.
How much of your company’s effort is spent driving performance beyond your current financial year?
2. Separate Objectives From Tactics
Jeff Bezos, the CEO of Amazon, once said that his company was “fixed on the vision, but flexible on the journey.” My experience of helping companies to accelerate growth supports his view. It’s seldom the first iteration that hits the growth jackpot, but if you’re clear on your objective and why you’re pursuing a particular initiative, the chances are that you will find a way to make it succeed.
For example, it took Tesco six years of testing and experimentation to find a profitable and operational Tesco Express format. The Tesco leadership had made a strategic decision that the convenience channel was important to future growth and, as a result of understanding and committing to that objective, they were determined to find an approach that worked.
Are you clear on your company’s growth objectives and are you willing to change specific initiatives to achieve them?
3. Fail Fast, Fail Cheap, Learn Rapidly
Tesco’s success with its other formats gave the company the luxury of developing its Express concept for six years before its wider rollout. Most businesses don’t have that luxury, and time is generally a more critical issue. As a result, a key success factor is your ability to develop, test and learn from a series of prototypes and trials.
A pharmacy retailer I worked with, for example, was having trouble getting its customers to realise that stronger, more effective medicines could be bought from behind the counter, rather than from open displays. Rather than investing in expensive customer research or big, set-piece trials, the team set up a series of ‘quick hit’ trials in a single store over the course of a week and watched how shoppers reacted to their various ideas.
It immediately became obvious that one particular solution, where a dummy pack was put on display with a message to shoppers to take the pack to the counter, got the best reaction. Within a couple of months, this solution was rolled out across the chain, and a trial costing just a few £s delivered double-digit growth of stronger medicines.
How quickly and cheaply can you test your new growth initiatives in your organisation?
4. 80% Of Success Is Showing Up
Behind this Woody Allen quote is the insight that it is discipline and perseverance that ultimately delivers success. Too many organisations and managers are good at developing new ideas, but poor at ensuring that their initiatives are relentlessly developed, pursued and implemented. The ability to keep on ‘showing up’ is not as easy to find as you might think. As a result, you need some simple mechanisms to keep your growth initiatives front of mind and your managers accountable for results.
A couple of years ago I worked with a £750 million UK retailer, helping them to create and embed a performance management system for their strategic initiatives. There are three critical elements to the new system: (1) Monthly executive meetings that are exclusively focused on new growth initiatives; (2) A one-page progress report for each initiative so that the whole team can see that progress is being made (or not); and (3) Executive-level accountability for each initiative so that any issues are never ‘out there’ but are resolved in the room.
What mechanisms does your business have to ensure that growth initiatives are pursued with the same discipline as your day-to-day operations?
5. Remember, Perfection Is The Enemy Of Progress
Many people say that Steve Jobs, the late, great leader of Apple, was a perfectionist, demanding the impossible from his team in the development of the company’s new products. In some respects, this is true, but Jobs was also a pragmatist. He didn’t wait until he had absolute perfection with a particular product before going to market – he knew that further versions would be developed that would improve the benefits to the customer. As a result, for example, the iPad was launched without a camera.
The key is that your initial idea makes a material, positive difference to your customers. After that it is up to you to continue to update, improve and refine the product or service so that it continues to stay ahead of the competition. Don’t seek perfection, seek genuine success, and then build from there.
Where is your search for perfection preventing you from making genuine progress?
Driving and delivering new growth is a critical management and leadership task. It is seldom the result of a one-off, ‘silver bullet’ event, but is more commonly the consequence of disciplined and systematic processes and behaviours. The five beliefs and behaviours set out in this paper will help you create the conditions that will enable you to accelerate growth in your organisation.