When a Revenue Growth Strategy is Needed

— and When it's Not

Highlights

  • Company strategies are needed to achieve business outcomes that matter (i.e., increased revenue) or outcomes that are difficult to achieve.
  • If you are not achieving your revenue goals, then you need to do something different. A revenue growth strategy built on data, evidence-based best practices and analytics can define, de-risk and maximize the likelihood you achieve the results that have been elusive.
  • Revenue growth strategies engineer customer and business outcomes to maximize revenues. They define the path to achieve a targeted revenue result in the shortest time and least cost. They focus on the methods and processes that produce the outcomes that most matter and avoid wasting time with activities that don't.
Johnny Grow Revenue Growth Consulting

A revenue growth strategy defines a calculated approach to achieve a growth objective. Most often that means a data-driven approach to grow revenue or market share at the least cost and in the shortest time.

Company growth strategies capitalize on core competencies and design competitive advantages that create or extend differentiation. They demonstrate how the company will position the brand relative to competitors, solve important customer problems and win customers. They apply data to demonstrate how doing these things achieves the company's financial goals.

When Strategy is not Needed

Sometimes a business strategy isn't necessary. If the desired business outcome is not significant, the timeframe is short and alignment of actions is not required to achieve the goal, you may not need a strategy and can jump right to execution.

Or if the status quo is working for you, keep doing what you are doing. One caution though. If your industry is incurring accelerated change don't get lulled into a false sense of complacency.

If you are incurring more empowered customers, product commoditization, price pressure, changing market conditions or new competitors, a new or altered revenue strategy is likely needed. For companies with a history of success, the biggest risk to growth is sticking with the things you did before in a market that is not like before.

The need for a revenue growth strategy is also influenced by the level of competition. If you are fortunate to be in a less competitive market, a strategy may appear less urgent. But another caution. As Alvin Toffler once said, "If you don't have a strategy, you are part of someone else's strategy."

If a revenue growth strategy is needed, its absence will contribute to several consequences.

  • Without company strategy, execution is aimless. Without a revenue plan it's difficult to know your progress and make timely course corrections while they can still impact the final result.
  • Without strategy, achieving goals can seem more like a surprise than a systemic result. It's like shooting in the dark. You may hit something, but it may or may not be what you were aiming for.
  • Without company strategy, staff tend to do what they know, which may be different than what is needed. Activities look more like random acts than prescribed methods. Teams tend to take the first or easiest path rather than the most direct or effective route. Actions look like piecemeal efforts based on convenience or possibly based on a few trial and error techniques to achieve short-term (often temporary) goals.
  • Without business strategy, staff repeat the past. The norm becomes the operating model. If you didn't achieve your revenue goal last year you probably won't this year.
  • Without business strategy, execution tends to be designed on the fly and in a vacuum. It also tends to be a point in time best guess.
  • It's a lot like watching a foreign language film without subtitles. There's a lot of activity, but you are not really sure where it's going.

Overall, if there is no revenue growth strategy, there is just business as usual. Or there is the failure to grow.

As Lawrence Freedman writes in his book Strategy: A History, "Without a strategy, facing up to any problem or striving for any objective would be considered negligent. … There is a call for strategy every time the path to a given destination is not straightforward."

You can run a company without a strategy, but what normally happens is the goals are designed at the department level to satisfy lines of business more so than the company. Performance results then slip from strategic objectives to tactical achievements and from bold accomplishments to incremental advancements.

When a Revenue Growth Strategy is Needed

If what you are doing is not working, you need to do something different.

A business strategy is needed to organize the company's resources toward an overarching revenue or profit goal. It gets everyone to rally around a shared goal and agreed upon path to achievement. It prevents business units pursuing their own agendas in an uncoordinated and disjointed expedition.

  • Creating a business growth strategy is not easy. A best practice is to apply growth strategy risk analysis to preempt the most likely or impactful challenges. Notwithstanding the effort, the benefits of a successful growth strategy include several powerful outcomes.
  • Strategy substitutes research, data and informed decision making for intuition and ad hoc operations.
  • Everybody marches to the same visible plan and the same destination.
  • Strategy shows what's vital. It's more important to do the right things than do things right. Because doing low value, mediocre or non-essential things right delivers no company growth. The journey defines the right things, the most strategic things, the things that most drive revenue growth.
  • The business strategy and supporting revenue plan create objective measurements and accountability. They sequence the methods to achieve target objectives in the shortest route. The company gains a tool to prioritize progress over activities and results over effort. The tool separates the important from the urgent. It removes excuses, diversions and phantom tasks that get in the way of an agreed upon pursuit.
  • It distributes accountability. Growing company revenues takes a village. The weight of the world shifts from the CEO or revenue leader to become more evenly distributed among everybody in the company.
  • Most of all, a revenue growth strategy significantly increases the probability of achieving success.

Strategy and execution are symbiotic. They are powerful together and generally ineffectual apart.

The below table illustrates key differences in growing a company with and without a revenue strategy.

Without Strategy

With Strategy

Strategic Plan

An aspirational goal without sequenced methods and real-time measurable progress

The target is supported with prescriptive actions and continuous measurements

Metrics and Progress

Indirect metrics dilute or cloud the most important goals

Focused on one or few top metrics (revenue target)

Resourcing

A few top executives assume the most responsibility

A village; everybody in company understands how their contribution impacts the goal

Accountability

When multiple people own actions or metrics, nobody owns them. No follow up on lack of progress or phantom progress.

Any variance tracked back to one accountable person.

Lack of progress kicks in remediation plans.

Resources don't fail, actions fail and need to be improved.

Planning

Reactive; figure it out on the fly.

Proactive; advanced data-driven planning.

Effort

The easiest decision is to make no decision. The status quo prevails.

Creating and executing strategy is hard. If the pain of same is less than the pain of change, then may not want to make the effort.

Results

Business as usual. If you didn't achieve your growth goals last year, you probably won't this year.

Calculated success. Stay on the plan, or the remediation plan, and you will systemically achieve the desired result.

See when revenue growth strategies are needed and when they are not.

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