There’s a core strategic problem in many businesses that’s comparable to maintaining physical health. When we’re taking care of ourselves or a patient, there’s an expectation that we will first understand the current situation and then determine the steps required to get to a place of optimal performance. If you’re going to run a marathon, you’ll need to quit smoking first. And then, you’re going to need to eat the right foods, build the oxygen capacity, musculature, and mental endurance to run the distance.
The physical health analogy helps us see the intersection between setting the right goals and achieving the desired results. When it’s your health, it’s easy to see the consequences of inaction or taking the wrong direction. However, in the process of consulting with clients or “patients,” it seems to be more difficult for companies to see the interplay between strategy, implementation, and results.
Declining Sales Scenario
Situation: A company with a 6-month sales velocity, the time it takes for a lead to become a new sale, wants a quick turnaround. The company’s sales have declined in recent years. The company intends to generate a 25% increase in sales in 6-months by immediately implementing a new website and advertising campaigns to drive new leads.
Competitive Advantage Opportunity
Situation: An undisputed market leader with the preferred brand in their category, is acquiring new customers quickly and able to command highly profitable sales. Their energies have centered on lead generation and branding. They wish to hire three new salespeople and increase their investment in paid media by 30%, even though they have the maximum market share of new business.
A Technology Disaster
Situation: The company’s sales have steadily been increasing in recent years, but have plateaued in the last six months. Their website traffic has increased by about 35% in the previous 12 months, but their leads haven’t. They don’t have the infrastructure to measure their conversions. They don’t target their ideal customer, and they are only generating a qualified-lead when the buyer wants to request a proposal, even though the typical buyer has visited their website 10x before the first contact. They don’t have a CRM, marketing automation, or analytical platform to understand user behavior.
Why We Created Growth Score
In each of the scenarios above, there are apparent missed opportunities. There are opportunity costs and delayed implementation or investment in initiatives that are unlikely to generate the desired results. A formal strategic evaluation isn’t always a practical solution. In the real world of leading a business, there are immediate problems to be solved and short-term opportunities to be won. Sometimes a second opinion offers a much-needed perspective to highlight an obvious problem.
We developed Growth Score to help business leaders quickly scan their businesses for visible patterns and problems for free. Without the obvious consequence of needed time and money to devote to an analytical process, Growth Score is a diagnostic tool that helps businesses define their Growth Stages and identify obvious opportunities to sequence and improve their strategies.
Ultimately, Growth Score helps businesses quickly unravel the potential complexities of managing growth in a dynamic environment and use the results as a discussion tool to get other leaders in alignment.
Growth Capacity
Growth Score measures a company’s Growth Capacity. We define this as a measure of the ability to influence change in your business. Without enough Growth Capacity, it’s hard to direct and accelerate your revenue growth.
About Growth Stages:
Learning how to leverage your Growth Stages is essential for the health of your business, just like they are in life. Depending on the development of your Growth-Capacity, you need to solve different problems and sequence different initiatives to speed up the growth of your business and maximize your long-term profits.
What happens when you ignore your growth stages?
When you are growing your business, you need to invest in the right infrastructure, which could be planning, analysis, support, people, technology, branding, and campaigns. For example, investing in paid media without the technology or the strategy to target and measure your results can be costly in wasted ad spend. Hiring a new salesperson without a target market strategy or a sales process or a CRM system could result in wasted time and money.
Doing the ring thing at the right time, in the correct order, matters.
Foundation Stage, Scores Between 0% and 30%
When a business is at a foundational stage, there are typically significant gaps in both leadership and execution capacities. As a result of both the holes in management abilities and implementation, it is challenging to put together a growth strategy without the foundational building-blocks to set clear goals and to drive the business forward. You know there’s much work to do, but it can be overwhelming to address all of the issues at once.
Finding a practical starting point is essential. If you can find the discipline to take the right steps in the proper sequence, you’ll scale your business more effectively, and you’ll be in a much better position to sustain growth.
What our data shows about foundation stage companies
- 75% of companies are developing
- 80% of them need to improve their audience targeting
- 75% of them need to refine their positioning
- 95% of them need to invest in technology
- 100% need to invest in a strategic website, content, and SEO
- 100% of them are 6-months away from being able to speed up growth
Developing Stage, Scores Between 31% and 45%
Developing stage companies are typically underperforming in their category. You have some of the infrastructure in place, but it’s crucial to continue developing your technical foundation and zeroing-in on the stakeholders who control the buying process. You also need to focus on your existing customers and strive to engage and expand your existing relationships. When a developing company’s attention is zeroed-in on growth, there’s a tendency to forget about existing customers, even though referrals and expanded relationships might be a fast-track to sustaining cashflow and customer-acquisition.
What our data shows about developing companies
- 10% of companies are developers
- 80% of them need to improve their audience targeting
- 75% of them need to invest in technology
- 80% need to invest in strategic content
- 100% of them are 6-months away from being able to speed up growth
Outperforming Stage, Scores Between 46% and 65%
You’re outperforming the majority of your competitors. Outperforming scores indicate a company that can immediately improve its profitability by optimizing results across every stage of the customer acquisition and retention process.
Now is the time to build a competitive advantage, by narrowing your focus on your most profitable customers, improving conversions and activating your loyal customers and driving new referral business.
- What our data shows about outperformers
- 10% of companies are outperformers
- 25% of them need to improve their audience targeting
- 50% of them need to invest in technology
- 75% need to invest in strategic content
- 80% need to focus on lead generation and nurturing
Market Leadership Stage, Scores Greater than 65%
You’re leading your category, and you have a competitive advantage in at least one core area. It’s time to expand or optimize your profits. This is an opportunity to consider that your business can maximize its value and consider entering new markets, expanding targeted segments or even consider selling the business for a maximum return.
You’ll want to maintain your brand and optimize your profits to show the most significant operating benefits.
Actions to Consider
Focus on developing your sales engine by aligning sales and marketing activities so that there are clean hand-off and measurement.
- What our data shows about outperformers
- 5% of companies are market leaders
- 50% of them need to expand their markets
- 50% of them need to eliminate unprofitable customers
- 80% need to focus on retention and expanding relationships
