Profitable Growth is Everyone's Business
In the recent bestseller, “Profitable Growth is Everyone’s Business,” Ram Charan nails down fourteen critical areas for consideration in making everyone in your organization focused on growth:
- The sales force. Is your sales force focused on finding out what your company can do for its customers? Are your salespeople focused on the customers with the best potential? Does the sales force have too many products? Are territories too big or small? If organized on a geographic basis, should the sales force be reconfigured by customer industry?
- Helping your customers grow. Does the sales force understand your customer’s decision-making processes and social networks? Are you examining the problems and opportunities of your customers and applying your intellectual capital to help them grow their business? Is your organization internally connected (e.g., product development people know what marketing people are observing about customers) so that you are able to share strategic launch information with customers and work together to develop joint marketing plans and enhance the revenues of both companies? If the customer is large enough, do you have a salesperson in residence who knows everything happening at the customer’s shop to understand its pressures and the opportunities these pressures present you? That way, when the customer grows, you grow. Jeff Immelt, the CEO of General Electric, has expressed this as “ACFC” at the customer, for the customer an idea he is implanting in all the businesses of the company.
- Customer-need segmentation. Do you have the right skills in customer-need segmentation to refresh, extend, and reposition your products? Are you using segmentation skills to do further subsegmentation to discover new customers for your current products?
- Pricing. Does your pricing structure reflect the value you provide customers? Does it also simultaneously improve revenue growth and the bottom line through effectively segmenting the customer’s buying behavior and identifying the attributes the customer most values?
- Positioning and, where necessary, repositioning your business. Does your position in the marketplace make you vulnerable to new competitors such as the way Dell has encroached on Sun Microsystems in the server market; to new technologies such as wireless in the local telephone wirelines market; and macroeconomic factors such as currency exchange rate imbalances?
- Downstream marketing. How well are you using branding, advertising, and promotion to enhance revenues and change perceptions of your products? Does your advertising change the consumer’s view of your brand from what it is to what it should be?
- Customer satisfaction. Are you providing pre-purchase (e.g., delivery on time, the full order, proper billing) and post-purchase customer service better than the competition? This can be a cause and effect of revenue growth. Customer satisfaction is an emotional experience etched in the consumer’s mind. He may not remember the details, but satisfied customers are more likely to be repeat buyers and also create word-of-mouth. There is no better generator of revenues than a customer emotionally articulating the experience to someone else. What kind of experience are you providing to your customers?
- Logistics and delivery operations. One hundred percent reliability increases the chances for suppliers to get preference over the competition for additional shelf space from retailers. This is a critical foundation for revenue growth. How reliable is your organization? How exactly do you know?
- Manufacturing. Are your production processes and tools like lean manufacturing giving you an edge? A persistent, faster drive to achieve global cost advantage ahead of competitors gains market share without negatively affecting the bottom line. Similarly, achieving a differentiation in delivery to the customer and at the same time substantially better inventory turns than the competition gains market share and revenue growth without price wars. How good are you in both areas? No matter how you answer, what are you doing to improve?
- Finance. People in finance have special skills that can be valuable in helping the sales force shape value propositions in the language of business – cash flow, return on investment, margin, asset turns, and the linkages between them. Are you using them to the fullest?
- Billing. One of the greatest issues for any business is untimely, inaccurate, and incomplete billing, a source of frustration for both the sales force and customers. Often, disputes are resolved through reduction in revenues leading to reduction in margins and the bottom line. Making sure this doesn’t happen is certainly low-hanging fruit that can help increase revenues. When was the last time you took a look at how your company handled billing (other than to resolve a problem)? Billing should be reviewed on a consistent and on-going basis.
- Legal. Lawyers often have good business acumen and are the source of ideas for structuring contracts so they increase revenue growth. Contacts with their counterparts in a customer’s organization can often provide information useful in detecting the customer’s decision-making processes. Is your legal department doing any of this. If not, why not?
- Information technology. Information technology is at the heart of growth for companies such as Amazon.com, eBay, American Express, and Wal-Mart. Is your information technology department providing you with real-time updates about what customers are buying? Is it analyzing what the competition is doing? Is it spotting opportunities for cross-selling? A growth agenda provides the opportunity for people in IT to become fully integrated in every part of the organization ’s operation.
- Human resources. Of course, HR needs to be involved with the issues associated with pensions, benefits, health care costs, and leadership development. But there are a few HR departments such as Bank of America’s, in an effort spearheaded by Jim Shanley, that are fostering the social linkages that break down the walls between the different silos of the organization. Is your HR team making sure, for example, that the information the sales force learns from customers is being fed directly to product development and marketing.
As described above, how are you doing? If you did a 5 P’s (Product, Price, Promotion, Placement, People) evaluation on your company and brand today, would you score high? If not, why not? Call us today to make everyone in your organization focused on profitable growth. It’s the only way you ’ll get there.
For more information, go to www.northstar-m.com or e-mail Kae Groshong at kgwagner@northstar-m.com or call (717) 392-6982.
