High Growth Strategy Overview
In a previous article entitled "The CEO's Decision Gap", we showed that there is a significant gap between what CEOs thinks is going on, and what may really be going on. We showed how this created a phenomenon we call the CEO’s Decision Gap—the gap of missing and misleading information preventing CEOs from making high-quality, effective decisions that lead to sustainable and profitable growth.
In this article we will attempt to provide a blue print for how CEO’s can grow their companies by 100% in 24 months, and sustain high growth rates afterwards.
Step 1: Conduct a GAP Audit
This is the first step. CEOs must first understand the gap that lies between ‘A’ where they are today, and ‘B’ where they want to be in the next 3-5 years.
Without understanding both what the gaps are and the magnitude of the various areas gaps, CEO’s cannot begin to define and prioritize the roadmap (‘C’) to bridge the gaps and arrive at their destination (‘B’). For more information and analysis of what we mean, please refer to The CEO’s Decision GAP.
A SOMAmetrics GAP (Growth Accountability and Performance) Audit typically takes less than a week to complete and provides a thorough and detailed analysis of the challenges the company faces as it tries to move to the CEO’s vision for the future of the company.
Step 2: Define the Roadmap ‘C’
Many a time, CEO’s define the strategy for the company and inform the senior management team, who in turn informs the rest of the company what the strategy will be. In most cases, results fall short of what expectations are.
We believe the reason for shortcomings is that the strategy is difficult to execute because it didn’t follow a top-down bottom up approach because it didn’t take into account where the company is today (‘A’) and work with the best people in the company to define the roadmap ‘C’ of how the company will get to ‘B’, the future.
Research and experience shows that the best way is for the CEO to assemble a strategy formulation team consisting of the best minds in the company, take the team away from day to day responsibilities, and charge them with identifying the optimal market segment for growth, and define a go-to-market strategy that will enable the company to own 25-40% market share within 24 months.
This step is discussed in great detail in “Go-to-Market Strategy Formulation” article.
Step 3: Shared Responsibility for the Five Fundamentals
As we work with our clients, we see that a key reason why companies fail to achieve their growth objectives is lack of understanding of how the five fundamental metrics—revenues, market share, customer satisfaction, profitability, and innovation--work together towards sustainable high growth.
Our GAP audits consistently show that companies work under two critical misconceptions:
- Misconception #1: Many companies believe that meeting revenue objectives is the primary focus and that if they focus on that, the company will grow sustainably in the future.
- Misconception #2: An executive is responsible for only one of these metrics. For example, the VP of Sales assumes revenue is his/her only real concern. The CFO thinks profitability is his/her only real concern, and so on.
Our research and experiences show that both of the above are false and are exactly why companies find it hard to consistently meet their growth objectives.
First, the CEO and the Executive Team have to accept that all Five Fundamentals--revenues, market share, profitability, customer satisfaction, and innovation--have to become top priority, continually monitored, and managed for growth—and not just one or the other.
Secondly, every member of the Executive Team is responsible for ALL Five Fundamentals, not just one or the other. In other words, the VP of Sales is responsible for revenue, market share, profitability, customer satisfaction, and innovation. So are the VP’s of Marketing, Finance, HR, Engineering, and Customer Service. Each is responsible for all five.
Taking it one step further, CEO’s should continually drive the clear message that EVERYONE in the company is responsible for revenue, market share, profitability, customer satisfaction, and innovation.
Step 4: Define the Implementation Plan
With the Executive team and key members of each department now on the same page as to the roadmap (Step 2) of how the company is going to grow 100% over the next 24 months, the next task is to get detailed implementation plans from each department.
Each executive will work with his or her best people to determine:
- How that department will deliver the expected growth in the five fundamentals
- How they will track and measure growth in the five fundamentals
- What the evaluation and compensation plan will look like for both under and over achievement
This plan will be submitted to the CEO within 2-3 weeks of returning from the Retreat (completion of Step 2). The CEO will review the plan and accept or reject the plan with specific comments on what needs to be improved.
Once the CEO has accepted all the plans, the CEO will have these specific plans integrated into one business plan for the company and will be distributed to all executives.
This plan will be the basis for all monthly management meetings going forward.
Step 5: Make 100% Personal commitment to Achieve Targeted Results
We often hear from many that their company has announced strategic plans, initiatives, and other big words and nothing much has changed. Employees become cynical. They come to meetings, hear announcements, and go back to their work and their lives.
The only way the CEO can overcome such cynicism, and the accompanying resistance to change, is by obtaining personal 100% unqualified commitment from each of the executives.
Each executive must make a personal pledge to do whatever he or she can do, with integrity, to deliver on the targeted outcomes of the plan. Sure, plans need to be adjusted during execution based on feedback and data. However, the goal of growing 100% within 24 months is non-negotiable. There will be no excuses for missing that target.
Each executive in turn will go back to his or her top lieutenants and obtain a similar unqualified 100% commitment to do whatever it takes, with integrity, to deliver what their department has promised to deliver.
It is only with this personal pledge that change will begin, and also that change will take hold.
Step 6: Pilot the Changes
The CEO will make a formal announcement of the launch of the plan. Each department will launch its 90 –day plan launching the new Strategic Initiative of growing 100% in 24 months. As this is likely to be a departure from the way the company used to do things, each department head will ask for volunteers to work on this initiative and complete it within 90 days.
The core of the team charged with executing the 90 day pilot will need to be composed of those that attended the two-day retreat detailed in Step 3 of defining the Roadmap. These individuals have already given their absolute commitment to seeing that the company grows 100% in 24 months. It is their talents and commitment that will be essential for kicking off the company’s transformation into a world-class high growth company.
Step 7: Make Necessary Adjustments
During these 90 days, each of the executives and the top lieutenants will continually monitor the unexpected challenges and successes, discuss these, and build back into their departmental plan.
A powerful tool for making necessary adjustments is the monthly Senior Management meetings.
While many companies have such a meeting, not all use this meeting for what it should be used for—identifying the most important challenges and opportunities that ALL senior managers must work on together.
During this meeting, each executive will take 3-5 minutes to share three important pieces of information to the rest of the executive team
- The unexpected successes or positive results seen during the prior month
- The unexpected challenges or hurdles seen the prior month
- What the team intends to achieve the coming month
After each executive has reported on their key items, the CEO will then open the meeting to addressing the top challenge faced by each department. Every executive there will offer advice and help on how to address this challenge
After the round of challenges, the CEO will then open the discussion to the top unexpected success or achievement in each department and see whether these can be replicated in other areas, and what opportunity they present for further growth
These executive meetings should not last more than 2 hours and the key is to make sure that executives only report and focus on their key pieces of information they want to share with the team. The rest should be distributed and read before the meeting.
If used as recommended above, the Senior Management Meeting is a powerful feedback mechanism for achieving organization-wide changes quickly and effectively.
Step 8: Scale Out
Now that the team has the first initiative under their belt over the past ninety days, it is now time to start phasing out old systems and processes that are no longer relevant and replacing them with the new best practices, systems, and processes that have been agreed to.
Each department will then set quarterly goals for doing, measuring, adjusting, and doing more towards the stated goals of 100% growth in 24 months.
Step 9: Make continual Improvements
The key to sustained high growth is making continual improvements which has the following key elements:
- Defining the targets to be achieved
- Determining the Key Performance Indicators (KPI) that enables the organization to see if it has achieved the targets
- Periodically evaluating the targets to see if they are still relevant and inspiring for the organization, and therefore, periodically evaluating the KPI to make sure that they are in synch with the targets
- Never taking anything for given or granted, but always questioning underlying assumptions to see if they are still relevant and meaningful
- Always looking for the unexpected successes and failures to understand why and make the necessary adjustments
- Find ways to increase organization-wide learning so as to disseminate new information and skills as quickly and as widely as possible
- Rewarding success, but rewarding innovativeness and risk-taking even more
How SOMAmetrics Can Help
SOMAmetrics works with clients in every step of creating and managing the above blueprint: from GAP audits that illuminate the gaps that need to be bridged for a company to transition from today ‘A ‘to the vision of the future ‘B’; to defining the Roadmap 'C’; to working with each department and senior management team to work out an implementation plan; and to providing any missing skills and resources for bringing about that transformation.
We have the necessary skills, experiences, and tools to help companies efficiently create a compelling future, define an effective go-to-market strategy for this vision, and the resources to execute on the strategy.
Please contact us today to see how we can help you grow 100% in the next 24 months.