There are many ways to grow, why do we make it confusing?
Companies get stuck because of either: a) product b) market or c) channel. Don’t create a growth strategy without first understanding what is limiting the company.
Growth is then about fixing the above problem (singular as in fixing one is better than fixing three).
- New markets: geographies, verticals, horizontals
- New products: enhancements, modules, platforms, applications
- New channels: OEM, VAR, Integrator, Web, Distributor (incl. service providers), new Sales Reps
Organizing this dialog and being very precise is important because this is the diagnosis stage. This is your 2×2 matrix of market development (existing product, new market), product development (existing market, new product), market penetration (existing product & market), and diversification (new product & market).
The second level of strategy thinking is installed base vs. new accounts. Think about 3-5 year lifetime value here and then think about:
- Seed: free, trial, loss leader, viral
- Upsell
- Cross-sell
- Down market/stack, often including consolidation strategies
- Up market/stack, including services
OK why am I reminding us of business school 101? Because we forget to do this once we get wrapped up in operating mode and acronym speak. Keep reminding everyone by using simple terms or the group will forget the strategy by morphing it into 4 strategies. Just think ‘the offsite from hell’. Remember half of them are engineers and could optimize anything without knowing what they’re really building.
Kill zones. These are the places that the guy before you already thought about. They are the obvious stuff above in mature markets and in rapidly emerging markets, they are anything that isn’t the ONLY thing you do. For products or markets that are 3-7 years old, business school does have a role and you just need to keep your story straight and execute.
The mostly likely kill zone is the disconnect between product, channel and market. The marketing guys have a great new strategy that engineering underfunded and sales forgot about because they got paid on doing things the old way. And every other variation. This is a leadership issue but it’s hard to execute and change at the same time and the CEO, COO, VP Sales, VP Engineering can be pretty black and white, spreadsheet heads when they want to. If marketing is going to champion or even support a new strategy, more leadership than you can ever expect is required. Think babysitting, Close/Fix/Sell and fund-raising all in the same breath.
The best growth strategies come from the customers. They know your growth strategy MUCH better than you do but you need to invest in listening. Think consumer marketing. I don’t want to study how people really use soap in the kitchen (yes I spared you) but I better segment them into: a) sanitizers b) bubblers c) eye droppers and d) waterers if I want to get at latent needs. Sales will not give you this. CEO might. Services can be interrogated into opinions. Product guys either know better than you or have no clue—they’re polar in my experience. Market research is good background but won’t give it to you. You need to look inside their garage. I remember Scott Cook of Intuit telling a story about segmentation, where the market researcher just says ‘show me your garage and I’ll know your lifestyle’.
OK now you have your PowerPoint strategy that seems to make sense to everyone since they are too busy too really listen. You’ve written down all their good valid questions (to which you have no clue for 50% of them). Now it’s time to shut up and sell. Don’t tell anyone—they’ll object. Go out with a rep and sell up or across for him. Follow-up as follow-on call with an inside sales rep and see what you find. Organize the user forum to get at these issues. Tell the analyst that you’re really interested in speaking with bubblers.
Armed with 5 examples that people care about internally, you now need to bang the table. We’re dying on the vine and a new growth initiative needs to be started now. This needs to be sold to CEO in three ways; a) process b) potential c) GTM change management. Get through those gates and you have a growth strategy. I didn’t say it was funded……
To get funding, you need to sell the management team that we can’t keep talking about ideas without having more preparation work so we can make some decisions. This is where the business plan to MRD to PRD to GTM to PIP structure comes into play. To see examples of this process, visit the portfolio section of this blog for product management and product marketing.
Bottom line: keep the team on clear growth strategies that are executable by simplifying the challenges and unknows with clear communication of the process and most importantly first hand data points. The data is out there, you need to lead the team to get it.