A Proven Business Growth Strategy Framework
- A business growth strategy framework engineers customer and business outcomes to maximize revenues. It defines the path to achieve targeted revenue results in the shortest time and least cost. It focuses on the methods and processes that produce the outcomes that most matter and avoids wasting time with activities that don't.
- Good top line revenue growth strategies show what's vital. It's more important to do the right things than do things right. That's because doing low value, mediocre or non-essential things right delivers little to no growth. The journey defines the right things, the most strategic things, the things that most drive revenue growth.
- Strategies are needed to achieve business outcomes that matter (i.e., increased revenue or profits). Sometimes that means business outcomes that are stubbornly difficult to achieve. A data-driven business strategy built pursuant to a proven framework will define, de-risk and maximize the likelihood you achieve the desired result or the result that has been elusive.
A business growth strategy framework defines a calculated approach to achieve a company growth objective. Most often that means a deliberate and data driven approach to grow revenue or market share at the least cost and in the shortest time.
A business growth strategy framework applies core competencies, designs competitive advantages that create or extend differentiation, demonstrates how the company will win customers, positions the brand relative to competitors and makes the investment needed to achieve the revenue goal.
But creating a great business growth strategy is easier said than done. That's why we’ve applied research and three decades of experience to develop a revenue growth strategy framework that facilitates a repeatable result and the likelihood of success.
It's built on 4 cornerstones and answers three questions:
- What do we seek to achieve?
- How will we win?
- Where does growth come from?
A Data-Driven Business Growth Strategy Framework
Here's how a company growth strategy framework architects the four most important company constructs to maximize revenue.
A company growth strategy sets a growth target, usually a revenue goal, based on strategic planning events and assumptions. It also answers the question, what do we intend to achieve?
Planning starts with a diagnosis of the internal and external environment. It converts customer insights and market opportunities into competitive advantage and revenue growth. It identifies and prioritizes customer problems and business foresights.
Solving smaller problems yields incremental upside. Solving larger problems creates business transformation. Transformation is often born from ideation of novel and imaginative solutions. It challenges conventional thinking to envision new and different futures. It often takes inspiration from the innovation or disruption of outside industries.
The strategic planning will determine the magnitude of planned growth. The business strategy to run a company is very different than the strategy to grow a company. Those differences in business strategies and results are illustrated below.
A run the company strategy isn't a growth strategy. It puts more emphasis on cost reductions than revenue enhancements. It's an approach to be efficient. For those companies already efficient it's business as usual. For companies in stable markets and meeting their goals this tactical approach can work. However, for companies facing more empowered customers, market changes or new competitors, this business strategy is most likely a path to irrelevance.
A grow the company strategy pursues incremental revenue growth. Growth may be achieved from performance advantages, improved products or customer affinity programs. Gains tend to be hard fought and short lived.
A transform the company strategy applies innovation, disruption or other sustainable competitive advantages to solve customer problems and exploit market opportunities. This approach goes beyond incremental improvements to achieve order of magnitude gains. This company growth strategy is less about trying to be better, faster or cheaper and more about being different. It creates new value and differentiation, not more of the same.
Build Sustainable Competitive Advantages
Choosing competitive advantages answers the question, how will we win against competitors?
No company can invest in everything, nor be the best in everything. So, it's critically important to focus on the areas you choose to be best, be certain those areas matter to customers and will grow your business, and that you can create or extend competitive advantages in those areas.
Competitiveness used to be gained from operational excellence, with capabilities such as leaner manufacturing or superior supply chains. But these competencies are now table stakes.
Competitive advantages used to be things like products, price, staff, service and location. But in the minds of customers these are all easily substitutable and highly commoditized.
Customers top decision-making criteria have evolved to wanting innovative products and services, and rewarding and memorable customer experiences.
Growth strategies that build upon the four sustainable competitive advantages of innovation, corporate culture, customer affinity and business intelligence deliver the biggest and most sustained revenue growth.
Identify Where Growth Comes From
Achieving a revenue target without knowing where that revenue comes from is like trying to get to a destination without a final address.
The growth strategy must answer the question, where does growth come from?
The two dimensions to grow your business are product growth and market growth. Expanding your products or customer markets in various combinations will reveal up to four choices.
- You can sell more of your existing products to your existing customer markets (a market depth strategy)
- Take your existing products to new markets (a market growth strategy)
- Expand or create new products to sell to exiting customer markets (product growth), or
- Create new products for new markets (disruptive growth).
Each option offers different levels of risk and revenue impact. Your business growth strategy explores, models and identifies the optimal combination of these growth options.
Organize in a TOM
The target operating model (TOM), sometimes called the Go-to-Market model, brings structure and simplicity to a sophisticated revenue strategy. It advances strategic planning into strategic management. It advances the growth strategy into an execution model that can be more easily achieved.
Each TOM is different, but every TOM will include a clear growth strategy with a financial target and a revenue growth plan. That plan aligns the revenue goal with the actions (i.e., resources, investments, methods, technology) to make it happen.
Those actions will be performed by several lines of business. So, the TOM will also include departmental plans that show how key business unit objectives will be accomplished and roll up to the company revenue goal. All of this requires an active governance framework.
The primary components are shown in a sample TOM below.
The above TOM reflects sub-strategies for the departments that are the most influential for company revenue growth.
Excluding inorganic methods such as mergers and acquisitions, there are only five ways to fuel business growth. You can increase customer acquisitions, raise the average sale order, optimize prices, grow customer share and improve customer retention. That's why Johnny Grow TOMs apply industry research and evidence-based best practices to engineer marketing, sales and customer service actions and outcomes to collectively deliver the company's revenue goal.