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Situational Awareness

Nine Things That Can Sink Your Growth Strategy (and Your Company)

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Nine things that can sink your growth strategy

“You may not be able to control the waves of change, but you can build a different boat.”

– General Stanley McChrystal

As any seasoned entrepreneur or senior executive will quickly tell you, there are many things that can sink your growth strategy, and ultimately your company if you are not careful.

While it is almost impossible to predict the future, you can prepare for some of the most common growth challenges. It starts by recognizing factors that could negatively affect the growth trajectory of your organization, and then thinking strategically about your options for responding.

For those organizations, and leaders, who successfully navigated through the nightmare of 2020 there were many such learning opportunities. It was a year unlike any other, and for growth leaders it offered many lessons on how to survive and thrive in a true VUCA environment.

In this article, I will share a few of the more common challenges that I have witnessed.

Learning from the Example of Others

If you are really paying attention as a growth leader, you can learn many valuable lessons by observing the failure of others.

By understanding the elements that contributed to the failure, and identifying if they exist (or could potentially emerge) in your operating environment, you can make plans to prevent these challenges from derailing your organization.

The best part of this strategy? You do not have to endure the pain and suffering yourself!

Nine Common Growth Challenges (and how to avoid them)

Here are nine of the most common growth challenges, and suggestions on how to avoid them in your organization:

  1. No vision – A key element of strategic planning is to define your Envisioned Future. Without a defined vision and long-term goals, your organization will be aimless. During the pandemic, many organizations panicked but ultimately found their footing and a path forward. Some leaders reverted to “survivor mode” and did not uphold their envisioned future, losing sight of where they wanted to go, and likely losing the confidence of their team in the process.
  2. Strategy not aligned with core ideology – Most successful organizations have defined their Core Ideology (mission, values, and purpose.) In the past 12 months, many organizations failed to align their internal and external actions with their stated purpose and values. This misalignment might not show any immediate effect, but it creates a crack in the foundation that will only grow over time. The best growth organizations are consistently true to their purpose and values, in good times and in bad. Many organizations have some form of “honesty” and “integrity” in their stated corporate values…a great question for growth leaders to ask is, “Did our actions align with our values in the past 12 months?”
  3. Neglecting talent – Growth leaders recognize that most problems are ultimately people problems. As a result, they focus on getting the right people on the bus, sitting in the right seats. During the pandemic, many organizations downsized to protect their bottom line. While necessary to some degree, many organizations will discover they cut too far and are now unable to capitalize on a recovery ahead of more strategic competitors who kept their talent intact.
  4. Poor situational awareness – Let’s be honest, almost every organization was completely blindsided by the global pandemic. Very few saw that disruptive force coming. However, by paying better attention to their operating environment and developing better situational awareness, growth leaders can begin to anticipate other potentially disruptive forces.
  5. Lack of a plan – The side benefit to developing greater situational awareness, is that growth leaders can do scenario planning with their teams. While it is okay to be surprised, there is no excuse for being unprepared. Successful growth leaders are always asking questions like, “What is the worst case scenario?” and “How would our organization respond to that?”
  6. Failure to take decisive action – Successful growth leaders have a strong, and consistent, bias for action. During the pandemic, many organizations hunkered down, hitting the pause button on executing their growth strategies. While some slowdown was prudent – and in many cases necessary – to completely stop created a huge loss of momentum, and ultimately sent an inconsistent message to the market. Many of these organizations likely will not recover from the resulting loss of talent and market traction.
  7. Failure to pivot – Closely related to taking decisive action, is knowing when something is not working and it is time for a change. Growth leaders know that sometimes the best way to get through an obstacle is to chart a new course and go around it! They innovate new products or services, enter new markets, or find new ways to position what they are selling. In the startup world this is call a “pivot” and it is a vital life skill for any growth leader. The organization either adapts or dies as a result.
  8. Lack of liquidity – There is an old business finance rule that “cash is King.” In truth, it is King, and Queen, and probably the entire royal court. Liquidity is the fuel for any organization, and without it, the organization will likely fail. The obvious connotation of liquidity is money, but it also applies to people, and capacity. Every growth leader must ensure the organization has the required resources necessary to execute its growth plan.
  9. Failure to communicate – Finally, successful growth leaders are exceptional communicators. They have an open, honest, two-way dialogue with all their constituents – both internally and externally. They do not fall victim to the temptation of putting lipstick on a pig. This clear and consistent communication not only serves as a vehicle to share strategy, it also provides a continuous feedback loop, builds trust, and ultimately helps to sell whatever solutions the organization is providing.

Conclusion

The pandemic has taught us that if you do not take the time to imagine the worst, you might not be prepared when disaster strikes. Bad things come in many shapes and sizes, and they do happen. Even to the best organizations.

By thinking about these common growth strategy challenges ahead of time, growth leaders will have a big head start on how to avoid them. Others in the market might stick their heads in the sand and hope their challenges will go away. But not growth leaders.  They confront adversity head on.

The good news – you can learn from the experience of others and prevent them from happening in your organization.

The bad news – if you ignore them, they can be catastrophic.

-Onward

The 10 Commandments of Effective Growth Strategy

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“Business principles are only as good as the practices that back them up.”

– Chip Conley

Developing effective growth strategy is never easy.

The good news: While it is difficult, it is not impossible.

Fortunately, there are a few time-tested and proven growth principles. If you follow them, they will reduce your up-front time and effort while significantly increasing the chances of success.

Over the span of many years in growth leadership and consulting roles, I have enjoyed great success by following these simple, yet powerful, fundamentals. Now you can too.

If you follow these guiding principles, in sequential order, you will have the building blocks to create an effective growth strategy for your organization.

The 10 Commandments

Most of us are aware of the Ten Commandments, the set of biblical principles relating to ethics and worship that play a fundamental role in Judaism and Christianity.

While not quite as enduring or carved in stone like the original Ten Commandments, I believe these ten growth strategy principles can be very useful and informative for leaders seeking to grow their organization.

Here they are:

1 – Know Who You Are

This growth strategy commandment is first for a reason.

Why? In order for effective strategic planning to take place, you have to know who you are. In this context, “you” is referring to the organization.

This is your starting point.

Knowing the Core Ideology (Mission, Values, and Purpose) of your organization, and ensuring they are in alignment with your product(s)/service(s) and brand, is crucial for effective growth strategy.

If these elements are not in alignment, your growth initiative is highly likely to fail before it ever gets to see the light of day.

2 – Know Where You Want to Go

Every leadership team has dreams and aspirations for where they want to take the organization. Knowing your Envisioned Future (Vision, and Long-term Goals) is vitally important for effective strategic planning and execution.

As the old saying goes, if you don’t know where you are going, then how will you know when you get there?

Having clarity around your desired future state will provide focus, inspiration, and a convenient measuring stick to track your progress.

3 – Have a Plan

Once you know your starting point, and your intended destination, you are then in an excellent position to plot out a path forward for the organization.

In strategic planning, I call this stage the growth strategy thesis.

It is the product of all your understanding, insight, and best thinking about how you will navigate the Strategic Gap that exists between where you are today and your destination.

Your growth strategy thesis and plan become the roadmap you will use to reach the long-term goals of the organization.

Why is it a thesis? Because it is your best guess as to the path forward. The truth is you will not know until you start executing. Your strategy thesis is what you and your team are going to follow until you learn otherwise from market feedback. Then you can listen and pivot as required in order to keep moving towards your long-term goals.

There are many distractions for growth leaders when creating a strategic plan. The most successful ones focus on the fundamentals first:

  • Vision before strategy.
  • Strategy before tactics.
  • Focus on the big rocks first, in priority order.
  • Walk before you run.

4 – Get Real

Growth leaders need to practice a special kind of honesty.

This involves much more than just being truthful in our business dealings. Growth leaders need to have radical candor in assessing their organization, its product(s)/service(s), competitors, and the marketplace.

I call this getting real.

It plays out like this: If you are not real about your organization and the environment, then you are very likely to be unpleasantly surprised in the future.

Many of us have been witness to this kind of dangerous thinking in the business world. A few common examples:

  • “We don’t have any competitors.”
  • “Our customers love us.”
  • “ACME Company isn’t anything to worry about.”
  • “Every company needs our solution.”
  • “Our Widget is better than anything else out there.”

Successful growth leaders start their journey with deep introspection about the organization and the solutions they deliver to the market. After this growth assessment, they will also spend a lot of time out in the market gaining better Situational Awareness about the market(s) where they compete.

This level of honesty is the most important part of strategic planning. You have to put everything (good, bad, and ugly) on the table so that you can objectively evaluate it and plan around it.

Do not try to put lipstick on a pig…that generally only makes things worse.

Get real. If your product or service is crap, fix it. If you do not have the right team, make a change.

5 – Know Your Target (Market)

In addition to having clarity around long-term organizational goals, growth strategists also must strive to gain clarity around the target market for their solutions.

This often begins with market segmentation and analysis. Then, thinking deeply about where the organization can effectively compete and win.

These insights are often documented in the form of personas and an ideal client profile (ICP in growth parlance). Having consensus on this information is crucial in order for go-to-market teams to be able to do their jobs.

With personas and ICPs, marketing teams can define positioning and messaging, and develop appropriate lead generation campaigns. Sales teams can identify qualified prospects and know how best to close sales.

6 – Understand Your Buyer’s Journey

Knowing your target is not enough.

An equally important, and often overlooked, part of understanding your target market is to understand how prospects buy. This so-called “buyer’s journey” is the key to unlocking the puzzle of how to gain more sales, quicker.

Most go-to-market (GTM) organizations get this completely wrong.

Their mistake is to think that the prospects they have identified as ideal targets will fall into line and proceed stage-by-stage through the sales funnel that the sales organization has carefully designed. This is hardly ever how it happens in the wild.

Buyers are doing their own research, developing their own solutions, and working through internal approvals all outside of the view of sellers. In fact‚ Gartner research finds that when B2B buyers are considering a purchase‚ they spend only 17% of that time meeting with potential suppliers.

They are on their own buyer’s journey.

Smart sellers attempt to understand as much as possible about this journey, and then line up their sales process with the buyer’s buying process.

An important takeaway: Marketing enables sales. If you understand the buyer’s journey, you can then map the right marketing activities, educational content, and sales activities, to help coach and move the buyer along their buyer’s journey.

7 – Define Your Unique Selling Proposition

There are many ways to define value for a customer. However, one thing is true: If your prospect does not find value in what you are trying to sell them, they will not buy. Period.

In growth strategy, this is called a unique selling proposition (USP) – a clear statement that describes the benefit of your product or service, how you solve your customer’s needs and what distinguishes you from the competition.

Developing this can be a powerful sales tool. The absolute best sales superpower is to be unique. If there is no comparison, then you are free to compete on providing the best value for the client.

As one of my wise marketing mentors once shared with me, “an ounce of different is worth a pound of same.”

8 – Know Your Route(s) to Market

A crucial part of every growth plan is to know and understand your route(s) to market.

An organization can consider many different sales channels as part of their growth strategy. Selling directly into their target market(s), whether it is B2B or B2C, is the most common. Other channels include partners, wholesale, retail, OEM, etc.

Knowing your route to market is a fundamental requirement in order to define effective growth strategy.

In the earlier Buyer’s Journey commandment, I shared that marketing enables sales. Ensuring that marketing and sales are in alignment, and working in concert, is crucially important no matter what channel(s) you ultimately decide to use.

9 – Build a Scalable GTM Infrastructure

The ninth commandment is about building a solid foundation for growth.

We all know that you need a strong foundation in order to construct an enduring building. It is the same for organizations.

The GTM infrastructure for the organization includes people, process, technology, and data/analytics. Growth leaders must ensure the GTM infrastructure is both capable and scalable.

In the growth mix, technology can be a force multiplier if the core GTM tech stack (website, CRM, marketing automation, social media) are integrated. The goal of every growth leader is to make sure that marketing, sales, and client success are all working together effectively.

An added bonus to tech integration is that is allows us to measure everything. The ability to track and measure key metrics allows growth leaders to build a predictable revenue model, gain clarity on marketing ROI, and ultimately make intelligent decisions on how to optimize and grow the business.

10 – Develop a Balanced Marketing Plan

In order to grow the business, it is vital to have a balanced marketing plan. A consistent cadence of outbound and inbound tactics will help drive growth.

It is worth repeating this important concept: Marketing enables sales.

Marketing is an expense. For many organizations, it is one of the largest budget line items. However, with the proper metrics and accountability in place, it should also demonstrate enough ROI to justify the cost.

Unfortunately, marketing is often viewed as a one-time event. In order to drive consistent growth, you have to commit to an ongoing go-to-market process and a long-term plan. An intelligent balance of marketing tactics, consistently executed, is always the best path forward.

Avoid spreading your marketing efforts too thinly – if you are budget challenged it is much better to do fewer things, but do them well. You can invest more in marketing as your grow.

Go Forth and Conquer

Remember, there is no silver bullet for growth.

Growth leaders can dramatically improve their odds of success by embracing the wisdom of these 10 growth commandments and making sure the right team is in place. Some may find value in engaging a CMO to guide them on their journey.

-Onward

Putting Lipstick on a Pig!

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“I believe fundamental honesty is the keystone of business.”

– Harvey S. Firestone

Years ago, in the midst of a long discussion about our product roadmap and where we should invest scarce resources, one of my marketing mentors asked me a profound question:

“Do you know what you get when you put lipstick and a pink tutu on a pig?”

This odd question had the desired effect, as it stopped the conversation dead in its tracks.

Sensing a trap, I paused to think.

Playing a few alternative answers over in my mind, I answered with the obvious: “A pig.”

This answer was met with a broad grin, a slap of his hand on the conference room table, and the response: “You are partially correct. But it is no longer just a pig…you have now also made it angry, very confused and pissed off by forcing it to wear lipstick and a tutu!”

The moral of this story was clearly not about how to avoid angering pigs – although that does sound like good advice!

Rather, this simple parable illustrated that we have to confront the immediate challenges in front of us, we cannot cover them hoping they will go away. Things generally only get worse if we try to mask them.

Fix the Issue Instead

To put “lipstick on a pig” means making superficial or cosmetic changes to a product in a futile effort to disguise its fundamental failings.

When you read this simple description, then the fundamental flaw of the strategy becomes readily apparent. A few relevant examples for growth leaders:

  • If your product or service sucks, fix it first. Your present and future customers will thank you.
  • Be honest in your marketing and sales efforts. Do not lie. Do not mislead your prospects. If your marketing value proposition does not match the actual value proposition delivered from a sale, then you are creating potentially fatal brand issues.
  • If your go-to-market infrastructure is not ready to scale, do not ramp up growth marketing and sales until you have built the foundation for growth.
  • If you do not have the right people on the bus, sitting in the right seats, make the necessary changes. Quickly.

The Connection to Strategic Planning

A fundamental requirement for effective strategic planning to take place is complete transparency and honesty.

Many planning exercises go sideways when growth leaders and/or their teams either cannot or will not confront reality.

This often manifests itself in product or service issues, or organizational problems, that should be addressed first, before any investment in growth takes place.

I always try to follow a priority sequence of steps to kick off every growth strategy engagement. This discovery process has proven to be very helpful in avoiding the dangers of putting lipstick on a pig:

  1. First, make an honest assessment of the organization, and its leadership. Ask yourself – Is there a willingness/desire to change/improve in order to drive growth? Are we willing to invest the time and resources required? Are we committed to the effort, even if it means some pain and suffering along the way?
  2. Next, is the team willing and able to put all the issues, problems, challenges on the table? If “yes” – great, move on. If “no” – dig in further before proceeding.
  3. Third, do we have good situational awareness of our client base and chosen market(s)? You must cast a wide net and examine many perspectives to make sure you are not missing something important, or setting the organization up to being blindsided.
  4. Take a long, hard look at your answers to items (2) and (3) above. I call this “getting real” and it is not easy. Growth leaders and their teams must be honest about the strengths and weaknesses of the organization, and the product(s) and/or services(s) they are selling. You must practice radical candor. Not every team is willing or able to “call their baby ugly!”
  5. Finally, before you start in on developing your growth strategy and plan, you need to triage any issues. Before proceeding, make the decisions to fix, dump, or accept as-is the issues you identified.

Taking the time to do this assessment and triage up front, will yield dramatically better outcomes for your growth strategy and plan.

Conclusion

The key takeaway for growth leaders: Never put lipstick on a pig.

Fix the issue(s) instead.

Then go to market.

-Onward

Get Out of the Building

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“Strategy should evolve out of the mud of the marketplace, not in the antiseptic environment of an ivory tower.” – Al Ries

Leaders of organizations always have the best of intentions when they work with their teams to create strategic plans.

The objective should always be to design a plan that leads to the successful achievement of their long-term goals. Most leaders want to get the planning done quickly so their team can shift focus to executing. This bias to action is not a bad thing, but it can lead to sub-optimal (if not downright dangerous) outcomes if they are not careful during the planning phase.

Many leaders make a critical mistake during this process. They don’t spend enough time gathering and evaluating real-world data that could shape or positively impact the outcome of their strategic plan. Instead, they stay in the boardroom to complete the plan in isolation using old data or opinions instead of validated facts from the real world. As a result, they often are blindsided by unexpected impacts during the subsequent execution phase.

In the context of effective VUCA Strategic Planning the remedy for business leaders and their teams is very simple. To borrow a popular phrase from the world of startups, they need to get out of the building!

The “Get out of the building” Concept

Steve Blank, sometimes referred to as the godfather of modern entrepreneurial practice, popularized the mandate that startup teams must “get out of the building” to validate their ideas. He developed a formal process, called customer development, whereby teams first develop a hypothesis for a new product or service then gather feedback from the market before they build or develop anything.

Although some of this important work can be done using online tools or brainstorming with your team, customer development is primarily done outside the building in front of customers and partners and other stakeholders in the business. The goal is to rapidly test the hypotheses with a series of experiments in order to figure out whether it is correct or not. And, if incorrect, what types of iterations, small changes, or pivots to your business model do you need to make?

In addition to being very useful for validating startup product or service concepts, the same approach should also be used by other go-to-market functions in more established organizations. For example:

  • Marketing – Regular contact with prospects and customers is vital for marketing professionals. These conversations can help them to build and refine buyer personas, test and clarify value propositions, learn new problem/opportunity insights, developing new thought leadership content, create new advertising, etc.
  • Sales – By definition, sales professionals need to be outside the building, either literally or figuratively, having direct sales conversations with buyers. These interactions not only enable them to progress a sales cycle, but also provide insights on important topics like ideal client targeting, objection-response, and closing techniques.

Application to VUCA Strategic Planning

When it comes to developing a VUCA Strategic Plan for the organization, it is essential for leaders and their teams to have the best possible understanding of the market and the business environment they are competing in.

Getting out of the building is a vital path to gaining better data and market intelligence. By talking with prospects, clients, partners, analysts, and even competitors, leaders get gain valuable insights on the market, new trends, and potential VUCA forces that could influence their strategic plans.

In the VUCA Strategic Planning model, Situational Awareness is the process that forces market interaction and feedback to happen. It happens best when leaders and their teams get out of the building and into their operating environment.

A Few Simple Guidelines

When it comes to VUCA Strategic Planning, there are a few simple guidelines that help support the mandate to get out of the building:

  • VUCA Plans are built on a foundation of robust Situational Awareness and comprehensive Scenario Planning. Both are best gained by first-hand observation or conversation in the market.
  • An intelligent opinion is still just a guess. You want to base your plans on validated customer or market data.
  • The dumbest person with a fact trumps anyone, including the most intelligent and experienced person on the team, with an opinion. Get validated data.
  • There are no facts inside the building. Get out of the building!

Conclusion – Get Out of the Building!

Getting out of the building is core activity for startups to prevent them from spending limited time and resources on things the market doesn’t want or need.

The same concept applies to leaders of established organizations and their teams when they develop their VUCA Strategic Plans. It is dangerous to make assumptions, so get out of the building and gather valuable planning data and inputs from your market. Your plans will be the better for it!

-Onward