Garage Gigs for Growth (#6)
Apart from the usual strategic fare on offer on the retro chalkboard – there is also a ‘fun’ moment when I disappear offscreen. Hey – they aren’t Garage Gigs for nuttin’.
This episode of Garage Gigs for Growth helps you look at your strategy work in the context of three different approaches to growth.
There’s two ladders in this video. Only one of them will help you grow your business. See where you are on your own growth ladder, which mindset you have and what is the right activity to generate faster linear or new exponential growth. Find out more in this 6 min video. (Keep an eye out for Ollie the Ostrich)
Let's take a look at your growth strategy today. As I go through a few different ways to look at things, think about how you're spending your time in your business, in your leadership role, vis-a-vis these.
There's three perspectives you can take when looking at growth. Is your company perspective the way you're going about things, the way you're doing things? You can focus on your customers, how they're interacting with your company and your products and services. Or, you can spend some time looking at the market, your customers' customers, how consumer trends are evolving, what are technology trends on the market. Those three are like lenses in front of your eyes. This is an internal and these two are external, clearly.
What sort of mindset might we have if we're focused on ourselves and how we can do things better? Pretend to have an operational mindset, how our operation is going and what can we do to improve them. The mindset we've got from a customer perspective often is service. If we're focused on our customers, often trying to help them take away things that are annoying them, take away any pain, any friction and give them things that they value. The mindset if we're going after a market view is often leadership. So, we focus on the trend of the market because we want to get ahead of them. We want to shift our organisation to be potentially one that is followed by others.
What activity do we need if we've got our focus on our own organisation and we're trying to improve things? What we need there is optimization. We're looking for efficiencies, smoother processes, ways to get cost down and in general, process type changes. From a customer service perspective the activity we need is innovation. We want to change things and improve them for the customer. That might be a new product or service so that might mean improving in the way we're going about interacting with our customers. We might observe them. We might survey them and we might find out unmet needs. From a market leadership perspective the activity to take control there is disruption. Successful disruptives always lead the market into a new area.
We think about these three ways of looking at growth strategies or strategy in general, what might growth come from if we've got our focus largely internal on how we're doing things? Growth is a little bit down to luck there. If we're not looking at the customer or the market, how things are shifting, we can get surprised. The growth trajectory in these sorts of companies is either single digits slightly up, single digits slightly down and it often results in a surprise. If growth doesn't come down to luck then often what we can try to do is get some growth from price. Not a great way to grow. We know it works. We know dropping price increases volume but the longterm sustainability of a business studies declining in margin is not healthy.
Where does growth come from if we've got a customer perspective and we're innovating? Well, it comes from word of mouth. Our customers love us because we keep making things better for them so they tell other people. We get a lot of growth that way and we retain our existing customers. Even slight churn in a customer base can lead to quite substantial compounding effect on your sales line if we're losing our heavy customers. Word of mouth retention, very, very powerful and growth on top of a baseline with that type of innovation product and services is linear.
Where does growth come from with disruption? Growth comes from new demand, so doing things differently, a way they haven't been done before and then expansion in the actual size of the market. Disruption often adds users where they were not users before, expands the bucket of what the users are purchasing. Disruption often comes from a low or no base and grows rapidly. So, it's an exponential curve of growth. It's often dismissed at this point by incumbents because it's nothing to speak of, it's not particularly a large part of the market. It's not particularly visible is why you have to go looking for it if you're not going to create it yourself.
What we don't want to do, gravity tends to suck us down to the bottom of this chart, we don't want to spend all our time here. It's what walks in our door, it's really easy to fill our day with this sort of stuff, but we've got to get into these two areas for significant substantial new growth and for sustainability in periods of high change. We do not want to the Ollie the Ostrich with our heads in the sand, down here all the time with our heads in our own bucket, in our own sandpit. We've got to get up and get out.
Disruption, innovation, get on it!