A common recipe for companies trying to repair underperforming revenues and margins is a hasty meeting to “fix” sales, “boost” marketing and “improve” production output. It is equivalent to playing corporate “Whack-A-Mole,” attempting one fix and moving to the next until one works. But think about this. Piecemeal improvements may get the job done for a while, but even the best band-aid only provides short-term benefits.
At Shepherd, we find many companies do not take the time to step back and ask: “What is our growth game plan?” and “What should we be working on that gives the best opportunity to grow?”
A well-known quote popularized by executive coach Marshall Goldsmith, comes to mind – “What got you here won’t get you there.” Needless to say, in our increasingly volatile marketplace, what got you here won’t keep you here either.
Is Your Strategy Right?
Companies flounder because what they are doing is not working. And often what is not working is their growth strategy. The strategic thinking at the heart of their growth game plan is flawed.
Often, companies find that strategic flaws sneak up on them. Markets evolve more quickly than anticipated, customer expectations shift without warning, or competitors improve much faster than expected. When circumstances change and the company strategy does not, revenue and margin struggles grow increasingly acute.
Fortunately, strategic flaws, once identified and addressed can dramatically accelerate growth.
An example. A bio-based specialty packaging materials company we worked with had struggled with flat sales of $2 million for multiple years. Their platform technology had broad applications and they focused their selling on large customers in a half-dozen markets. Their product was innovative - and ahead of its time. Potential buyers were interested, wanted to talk, but would not buy serious quantities.
Jump ahead eight years later, and the company’s sales had grown to more than $15 million. What happened?
In short, the company addressed its strategic flaw of selling too broadly and got focused – really focused -- on two small-and-growing market niches eager to buy its bio-based specialty packaging products: mail order high-end wines and organic foods. As the company adjusted its strategy, they aligned their marketing, sales, production, delivery, and innovation to serve these two niche markets exceedingly well. Once the company was pointed in the right direction, sales took off.
Strategy is at the heart of the growth game plan, and four fundamentals of a good strategy are:
Simply put, strategy is clear and compelling when it:
Clearly describes what success looks like
Makes sense and is easy to share with others
Is consistently understood across stakeholders
Generates passion and enthusiasm
A growth strategy is focused when it:
Is grounded in your company’s strengths
Clearly prioritizes and sequences what to work on going forward
Allocates time to those priorities
Enables the Team to really know what needs to be done to be successful
A growth strategy is aligned when it:
Syncs with growing market opportunities and changing customer expectations
Cohesively integrates marketing, sales, administration, and operations into one system working together
Has buy-in up and down the organization, from investors to leadership to management to the teams in the field
Promotes a consistent cadence to coordinate, communicate, and make decisions around what is most important for growth
And lastly, growth strategy is execution improves, sometimes dramatically, when management clearly spell out goals and milestones, actions and KPIs, owners and teams, timelines and budgets, and when the strategy will be reviewed and improved.
We at Shepherd, have helped management teams accelerate growth for more than a decade and we find again and again that the right strategy – well executed – makes all the difference. Is your growth game plan sound and its underlying strategy clear, focused, aligned, and executable? We hope so!