10 Paths to Growth … exploring the new book Growth IQ with Salesforce’s Tiffany Bova
December 23, 2018
Do you know the best way to drive your company’s growth?
If not, it’s time to boost your Growth IQ.
That’s the message of a new book by Salesforce’s Tiffany Bova.
Seth Godin calls her “a worthy successor to Michael Porter” whilst Nancy Duarte (author of that great book Illuminate) said “I have not had a book impact me like this one since Collins’ Good to Great.” Praise indeed.
Trying to find the one right move that will improve your business’s performance can feel overwhelming.
But, as Bova describes in Growth IQ, there are just ten simple, but easily misunderstood, paths to growth, and every successful growth strategy can be boiled down to picking the right combination and sequence of these paths for your current context.
- Customer Experience: Inspire additional purchases and advocacy
- Customer Base Penetration: Sell more existing products to existing customers
- Market Acceleration: Expand into new markets with existing products
- Product Expansion: Sell new products to existing markets
- Customer and Product Diversification: Sell new products to new customers
- Optimize Sales: Streamline sales efforts to increase productivity
- Churn (Minimize Defection): Retain more customers
- Partnerships: Leverage third-party alliances, channels, and ecosystems (Sales, Go-to-Market)
- Co-opetition: Cooperate with market or industry competitor (Product Development, IP Sharing)
- Unconventional Strategies: Disrupt current thinking
But it isn’t enough to have the right new growth strategy. Companies must fully understand what the current market context is prior to making any moves. Otherwise, even the right decision, or the right growth path can backfire – putting you in the wrong place at the wrong time.
Choosing the right growth path should always start with understanding the circumstances or events that form the environment within which your company competes. You have to understand the threat or opportunity the context brings, along with the combination and sequence necessary to support the chosen growth paths.
Context includes current social and economic conditions, the existing product portfolio, the competitive landscape, and corporate culture. Combination is the act of selecting key actions that can positively impact outcomes, when done together, and sequence is the act of establishing a priority, order, and timing to these actions.
Creating a multiplier effect is far more powerful than just focusing on one or two efforts in isolation.
So how do companies measure growth?
- Company health – measure orders, shipments, returns, product repairs, market share, employee turnover, profit margins, cost of goods sold, salaries, etc.
- Measure the metrics specific to the growth paths you have chosen to execute
The second means each path has its own metrics. Here’s a quick rundown:
- Customer Experience: Net Promoter Score (NPS)
- Customer Base Penetration: RFM (recency, frequency, monetary)
- Market Acceleration: New logos acquired
- Product Expansion: New product usage, mix against current portfolio
- Customer and Product Diversification: Adoption rates in new customer/categories pursued
- Optimize Sales: Quota attainment
- Churn (Minimize Defection): Churn rate and customer defection rates
- Partnerships: Joint sales/revenues
- Co-opetition: New joint product development and market launches
- Unconventional Strategies: volunteer hours of employees
Bova also uses thirty fascinating, in-depth business stories to demonstrate the opportunities and pitfalls of each of the ten growth paths, how they work together, and how they apply to business today. You’ll see how, for instance:
* Red Bull broke Coca-Cola and PepsiCo’s stranglehold on the soft drink market by taking the Customer Base Penetration path to establish a foothold with adventure sports junkies and expand into the mainstream.
* Marvel transformed itself from a struggling comic book publisher into a global entertainment behemoth by using a Customer and Product Diversification strategy and shifting their focus from comic books to comic book characters in movies.
* Starbucks suffered a brand crisis when they overwhelmed their customers with a Product Expansion strategy, and brought back CEO Howard Schultz to course-correct by returning to the Customer Experience path.
One final thought she leaves us with.
The best leaders know that growth needs to be countercyclical. That is, the best time to create the next big opportunity is when things are going well, not when you are struggling. So many companies have failed because they worked on yesterday’s context for tomorrow’s business. Also: the most important resource you have when embarking on growth is preparing your people. The most successful companies in the world regularly change direction and do it with such confidence and coordination that it looks effortless. We know it is anything but.