Paul Stead explores some of the drivers for growth and how their creative application can help businesses succeed in the growth challenge.
It’s easy to grow a business. We’ve all done it. It involves some basic ingredients: courage, hard work, dedication, teamwork, imagination and a little heavy lifting. Simple. In fact, it’s more of a challenge not to grow one.
Today, we are faced with so many opportunities for growth that it’s hard to avoid them. We are constantly advised by management consultants and government departments on how to improve, expand, and unleash the UK economy – just look at the recent Building our Industrial Strategy green paper.
We are urged to take our products and services into new markets, find new customers, create new revenue streams and now, with weaker sterling, we’re told we’ll be more attractive to foreign markets, making it even harder not to grow.
At this point I hope that you’ve sensed the real purpose of this article. Growth is a fundamental need for all businesses, but there is a huge spectrum of options in terms of advice, investment and encouragement. It seems failure to achieve growth should not be an issue, but it is – so the question is, ‘why?’.
Defining the challenge
Growth is especially challenging in markets riven by changes in consumer behaviour, as well as by technological disruption and political uncertainty. How can industry be sure of the best steps to growth? What are the fundamental ingredients and processes that need to be considered? Is there a manageable set of drivers that – if applied correctly – will ensure success?
Previously, I’ve written about ‘Design Thinking’ as a business tool to structure go-to-market strategies. When something is ‘by design’ it means it is considered, it is in response to a real need – a solution to a problem.
To drive growth we can use Design Thinking in the context of four key business functions: Sales, Product, Channel and Brand. (By the way – these are the ones to get wrong if you still want to avoid growth!)
There are other competencies you need along the way – for example, financial and legal, but without these four, correctly resourced, designed and tuned to the market, the business will fail. Each has interdependency on the others, but there is a natural order.
Sales are the lifeblood of every company, but what aspects of the sales function can be stimulated to create and drive growth? Ultimately, they are driven by an unfulfilled need – a gap exists, and identifying this is key.
It means listening to potential customers about their requirements, and understanding the competitive landscape, regulations and ecosystem. It means understanding the real issues.
Then, by defining a compelling ‘brand story’ or value proposition you will engage the customer.
Your story must be relevant, impactful and to the point. This is all about connecting with customers so they really consider your proposition. This process is driven by communication, which again needs to be carefully thought through.
So, how does your product meet those needs? If your product is wrong, sales will suffer; but assuming your product is great and sales are good, how can your product drive growth? Simple – with the introduction and development of new products: range extensions, variants, options or special limited editions.
Any product extension should be true to your ‘brand promise’ and this applies whether you sell products or services. For physical products, examine the design, engineering, styling and customisation provided; the way you translate your intellectual property (IP) into solutions.
For service products, consider the user experience, logic paths, processes, outputs and key performance indicators (KPIs). Again, if you want to avoid growth, remain a ‘one-trick pony’.
Let’s assume strong sales with a wide product range – where else can we find growth? You’ve sold a value proposition into a market gap – created products and associated services and found multiple customers. Unfortunately, this is where channel conversations usually end.
Driving growth ‘by channel’ means looking beyond current boundaries and establishing new uses for IP in new opportunity spaces. This could mean new partners who license your IP for use within their products, or vice versa. It could mean designing new business models, new ways of direct ordering, servitization, or new export markets.
The channel conversation is about leveraging what you have in as many places as possible. This affects sales, how you shape products, because the needs of new channels may be different. So, to avoid growth, ‘channel’ is simple – just don’t go there!
If you are selling your product or service through multiple channels, all of which are successful then you might think there is nowhere else to expand. But there is – let’s examine how your brand can be a driver for new growth.
This is last on the list because it cannot be built without underlying sales, product and channel. Successful brands are a combination of three things. ‘What you do’ plus ‘How you do it’ plus ‘What people think of you’. Brand is all encompassing. It’s your reason to exist, your ‘why’. It’s both internal – the way you treat staff, partners, suppliers; and external – your promise to customers, the guarantees you offer and response times.
This should be straightforward, but another route to growth via brand is the opportunity offered by an expanded brand architecture. Similar to product extension, this widens the opportunity space and is an effective way of driving growth. Think of your eldest child leaving home to set up on their own – they are still part of the family, but now have the space to expand and reproduce!
This article is intended to provoke. Of course we do not want you to fail, to avoid growth: that would be ridiculous. But as someone who uses the hybrid disciplines of strategy and creative thinking, I want to challenge conventional thinking to highlight the real issues that industry faces.
Growth is hard to achieve, but there are ways and means of encouraging and stimulating it using what you have; sometimes you just need a fresh perspective, a different way of looking at the problem.