Growth Strategy Is A Compass, Not A Mirror
Unless you’re a consultant or a financial journalist, you might be surprised how often you encounter businesses that thrive or, more often, just survive by accident.
Through the magic of survival bias, many companies arrive – sooner or later – at a lucky combination of product and customers.
This is the essence of survival bias, after all. Whether through luck or skill, if a company was not doing at least a halfway decent job of selling its product, you’d never have heard about it. It would have already gone bankrupt.
At first, “Lucky Co.” looks like any other successful company. When you press management to tell their story about the evolution of the business, their tale will sound just like the path of any successful firm – one that shows clear foresight about the market potential, driven by principles and hard work.
But, digging deeper, it becomes clear that the lucky firm may have lurched from market to market, product to product, strategy to strategy, and, eventually, happened upon a combination that fit.
In other words, management at these companies hoped for success but hadn’t really planned for it. Often, these companies are doing well, but management isn’t clear on why their current approach is working… or where to go next.
Strategy Is A Compass, Not A Mirror
For firms like these, the good times don’t last.
Firms that succeed, and continue to succeed over the long haul, have intentionality.
That includes a research-driven plan, where management is realistic and humble about what they don’t know, and the organization is clear about how it adds value and to which customers.
In short, it’s all about growth strategy.
A winning growth strategy should guide a company as it moves forward – a compass. It is not a reflective narrative that retroactively ties together the trials, and the successes and failures that a company has already done – a mirror.
How can you tell the difference between the compass and the mirror?
The most important element of a strategy is that it not only tells you what a business is going to do but, critically, what it is not going to do. In other words, it should tell you what segments you go after and what segments to deprioritize.
A winning growth strategy should also:
- Define customer needs and challenges in prioritized segments;
- Imply a guide for what products to develop for those segments and when they need to be available;
- Make clear the firm’s competitive advantage informed by market and competitor research;
- Set clear guidelines around competitors’ strengths and weaknesses; and,
- Articulate compelling messages that address customer pain points.
Companies that don’t have a good understanding of each of these bullets do not have a strategy, even if they have a credible story to describe their success.
Building The Plane While Flying It
By now, you might be thinking: “Ah – typical! The author probably thinks that no business can succeed unless there’s a two-hundred-slide consulting deck on the CEO’s desk guiding her every decision.”
Still, consider how often you heard a technology CEO talking about how the speed of the marketplace, and the rapid development of technology, do not allow the company to adopt a research-based approach.
These companies place a significant premium on the value of ‘action’ even as they are trying to figure out precisely what they are selling, to which segments, and when. Sometimes, they do all this as they refine their product or, in some cases, build it.
This attitude is so widespread it even has its own tagline: “Building the plane while flying it.” That’s not a complimentary description of a company, to be sure, but a commonly tolerated state of affairs, especially in the startup world.
To be clear, we can discuss whether a company can succeed with a host of strategies, with management hoping to see one emerge organically as a clear winner. I’m even willing to debate whether or not a company can succeed without receiving a colossal presentation deck from a consulting firm. Spoiler alert: They cannot. (Just kidding.)
Still, we can all agree that you would never want to be in an actual, real-life plane that people were building as it was being flown.
Success Comes After, Not With, A Plan
What are the red flags that your firm has no strategy or too many?
Here are a few:
- Teams are having mid-project identity crises.
- Sales keeps asking, “Who are we again?”
- Marketing is playing branding roulette when developing new content.
These issues are due to the absence of a strategy guided by primary market insights.
To obtain these insights, you need to collect information directly from your customers, recent clients you may have lost, those who have yet to make a decision, and prospects within your market.
While it’s not necessary to interview every single customer or prospect, it is crucial to survey a representative sample, and interview a few, to build a comprehensive understanding of their requirements, the factors influencing their purchasing decisions, and the alternative options they consider.
Acquiring insights about your competitors is also essential to understand their strategic priorities, identify their strengths and weaknesses, and know how they may outperform relative to your business or offering.
At Topline, we excel at pinpointing the ideal customers, crafting the most effective messaging to engage them, and selecting the optimal tools to facilitate sales. Our approach is grounded in gathering firsthand insights obtained directly from buyers – our clients’ prospects, customers, and customers of competitors.
That allows us to develop growth strategies that allow our clients to build or scale their successes cost-effectively… and without giant PowerPoint presentations.
Would you like to see how Topline can develop a growth strategy that will have a massive impact on your company’s topline?
Contact us to learn more about our approach.