How to Grow a Manufacturing Business
Revenue Growth Programs for Industrial Companies
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How to Grow a Manufacturing Business
So how do you most effectively grow a manufacturing company? That's a question best answered with data.
Research published in the Business Growth Report found that the highest growth manufacturing companies (i.e., the Best-in-Class which achieved the top 15% growth) excelled in up to 9 revenue growth programs.
These 9 programs stood apart from all others in terms of their ability to deliver the most significant and sustained revenue impact. A relative comparison showing how these 9 growth programs were applied by each manufacturing growth archetype is displayed below.
Here are some of the research insights that share how these programs impact revenue growth.
Industrial research shows manufacturers that actively managed a Revenue Growth Strategy achieved 2.8 times greater year over year revenue growth than those who did not. The Revenue Growth strategy is not your business plan. It's the selected revenue programs and roadmap to achieve targeted revenue results in the shortest time and least cost.
As demonstrated by the revenue growth results of the Best-in-Class manufacturers, advancing your growth strategy can increase annual revenue growth by 1.2 to 1.6 percentage points and EBIT margins by 1.4 to 1.9 percentage points.
Innovation significantly impacted industrial revenue growth. Manufacturers with the highest new revenue streams invested 17-21% more funds into transformative innovation. On average, about 34% of their innovation budget was directed to transformative innovation. By comparison, manufacturers with lower new revenue streams and lesser revenue growth allocated more than 90% of their budget to incremental innovation, which is typically limited to incremental product improvements.
The research demonstrated that shifting the innovation budget allocation toward more transformative innovation can achieve annual revenue growth of 1.4 to 2.1 percentage points and EBIT margins by 1.9 to 2.9 percentage points.
Manufacturers that cited corporate culture as a growth strategy achieved an average of 41% higher revenue growth than those who did not. They also achieved 14% higher revenue per employee and 8% lower staff churn. The research that showed the link between company culture and business growth found that creating an intentional and proactively designed growth culture can grow annual revenue from 1.7 to 2.5 percentage points and EBIT margins by 2.2 to 3.1 percentage points.
Strategic alliances also separated low from high growth manufacturers. 92% of the highest growth companies actively used strategic alliances as part of their revenue growth strategy.
For this group alliance sourced revenue remains a relatively small portion of overall revenue, but that portion grew 23% from the prior year. The research found that strategic alliances require ramp up time for on-boarding, culture alignment and collaboration, but once successful, show the potential to increase total annual revenue growth by 2.4 to 5.9 percentage points and EBIT margins by 2.7 to 6.7 percentage points.
Each of these 9 programs may be replicated using evidence-based best practices. A single best practice will deliver incremental revenue growth. A collection of best practices will deliver exponentially more.
An Industrial Business Growth Program
The Johnny Grow Manufacturer Growth Engine is a proprietary 3-step model that brings simplicity and data-driven direction to systemically scale manufacturer revenues.
There are dozens of things you can do to grow revenues and every one of them delivers a different result. Executives don't want to experiment over extended periods to figure out what works. They want to quickly know the shortest route to revenue maximization.
The Manufacturing Growth Engine models, forecasts and compares best practices and financial levers to quickly prioritize those that maximize growth. It's a precision approach and alternative to pursuing company growth by investing in wishful strategies and best guess explorations.
Here's how it works.
We start with Predictive Revenue Analytics (PRA), which are pro forma financial models that forecast the revenue uplift from each of the top 9 manufacturing revenue growth best practices. For example, in the manufacturing industry, four best practices that deliver significant and sustained revenue uplift include innovation, revenue operations, company culture and revenue analytics.
Using predictive analytics to measure the financial impact of each best practice, as well as combinations of best practices, allows management to compare and rank them so that the company can select those that deliver the maximum revenue in the least time, cost and risk.
We then move from precision planning to prescriptive execution with a Revenue Growth Playbook. Plays provide guidance and operational instruction for revenue growth best practices. Many times, they are execution plans with sequenced activities, progress milestones, phase gates, performance metrics and exit criteria. Other times they are brief but pointed recommendations such as next best action.
We then apply Growth Analytics to measure progress and flag variances in need of swift remediation.
We use performance dashboards to display the most important key performance indicators (KPI) in an easy to consume visual interface. The dashboards prioritize role-based information to show what should be done first, and then next, and so on. They identify variances and trouble spots in real-time so staff can quickly intervene with timely course corrections.
Most manufacturing reporting displays historical data. Better reporting shifts from lagging to leading indicators. And the best reporting enables metrics to be interactive, so managers can perform What-If modeling and scenario planning.
Growing Manufacturing Business is our Business
Our core competency is to help clients implement best practices that accelerate revenues and profits.
Our evidence-based revenue growth best practices are validated by manufacturing industry research, include prescriptive frameworks, have purpose-built measurement systems (i.e., dashboards and predictive analytics) and leverage technology automation.
And to de-risk our programs, our services include program management, organizational change management and governance programs.
Johnny Grow Signature Solutions
Direct To Consumer Manufacturing
D2C can monitize the entire product life cycle and create a quantum leap to company growth
An Onramp to Accelerated Revenue Growth
Art of the Possible
This one-day executive workshop shows what's possible in maximizing revenue growth.
It separates hype from fact and applies data to compare the many ways industrial companies can drive extraordinary growth.
We review revenue growth research insights, manufacturing best practices and growth technologies to define a revenue strategy that maximizes systemic revenue growth.
Business Growth Insights
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Revenue growth strategy research findings and best practices show how to achieve significant and sustained company growth.Read More
Research shows companies with Business Growth Strategies achieved 2.8 times greater year over year revenue growth than those without.Read More