Blog Category: Organic Growth

“Maximize shareholder value” is the pledge of allegiance recited in board rooms. It is a poor goal.

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This mantra guides the decisions of the business masses. But is it right? Peter Drucker didn’t think so. He said the primary purpose of a business is to acquire and keep customers. I believe increased shareholder value is a good result, but a lousy goal. You’ll have better results if your goal becomes: “Understand and meet the needs of our customers.”

More in 2-minute video at 5. Shareholder wealth is a poor goal

If you’re paying attention, you can’t miss the Innovation Wave.

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About 100 books on innovation are now written weekly… and 100 times as many articles on innovation are now published as in the 1970’s. So if you haven’t noticed, you might not be paying close attention. You know… like General Motors and Chrysler weren’t paying attention to Toyota and the Quality Wave in the 1970’s.

The good news is that your competitors may still be focused on initiatives other than whole-hearted, market-facing innovation. Like Toyota in the Quality Wave, you create a competitive advantage by moving faster and harder on this. More in 2-minute video, Catch the innovation wave.

More in white paper, Catch the Innovation Wave

Profitable, sustainable organic growth makes it fun to go to work.

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When you can count on profitable, sustainable organic growth, everything gets better. Employees have stable, rewarding careers. Industry-watchers admire your company. Customers want to work with you. Activist investors bother someone else.  And it irritates competitors. What’s not to love?

But you have only one path to this type of growth. You must understand and meet customer needs better than others. How intense is your focus here? Is it greater than that of your competitors’? Or is your business distracted by other initiatives that can never deliver rapid, profitable, sustainable growth?

More in 2-minute video, Rethink your major initiatives

Let’s stop the shell games at project reviews.

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My golden rule of investment is, “Make your decision when you’ve gathered the most facts and spent the least money.” If you do it right, this point in time is the gate just before the costly development stage. Most companies are far too casual here, letting each team build and present its own unique PowerPoint slides. Human nature says teams will use these slides to talk about their project’s strong points, avoiding weak areas.

So management tries to guess what’s missing: “What about the competition? Are there more technical risks? Is the problem this? Is it something else?” This shell game is waste of time, money and self-respect. Better to have a standard business case everyone works from. Here’s a sample of an abbreviated business case called a Market Case: www.marketcasesample.com

More in 2-minute video, Build a front-end business case

Have you separated your “farm animals” from your “jungle animals”?

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If you ran a zoo, you’d keep your jungle animals and farm animals in separate enclosures, right? Your technology development projects are untamed, jungle animals: You don’t completely understand them, and you’re not sure what they’ll do or where they’ll go next. Your product development projects are predictable farm animals. You know what they’re supposed to do, and who they’re supposed to do it for.

When you commercialize technology, you are “domesticating” wild animals for productive purposes. As a first step, you must be crystal clear which type of project your scientists or engineers are working on at any point in time. Remember, technology development turns money into knowledge; product development turns knowledge back into money. You can learn more from this white paper, Commercialize technology in 6 foolproof steps.

More in this 2-minute video, How to pursue transformational projects

Have your observed first-domino fixation and first-domino amnesia?

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When you change a system, you always have a second-order effect. You can’t tip just one domino. Freeze discretionary spending this quarter and you’ll slow dozens of projects, as teams wait to run outside lab tests, hire technicians, interview customers, etc. Product launches are pushed back, delaying future growth. Otherwise-bright business leaders suffer from first-domino fixation over and over.

And most don’t learn from it. How often have you heard, “Well, our growth problem is all those crazy spending freezes the last few years”? Never? Yeah, that’s what I thought. I call this first-domino amnesia.

More in 2-minute video, Avoid the pitfalls of 2nd order effects

Have you ever experienced the Commodity Death Spiral?

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Here’s how the Commodity Death Spiral works: First, you stop innovating and offer me-too products that are interchangeable with competitors’. This lets purchasing agents demand lower pricing, which lowers your profits. Now it’s budgeting time and your boss wants higher—not lower—profits, so you must reduce costs. You cut R&D and marketing since you don’t need them this year. Of course, you’ll have even less new product development capability next year.

Eventually, you reach the point of no return, and your business dies… or goes on “life support” and is no longer relevant. Sadly, many businesses are on this downward spiral right now, and either don’t know it, or don’t want to admit it. They need a wake-up call, or the employees in that business will suffer.

More in this 2-minute video, Avoid the commodity death spiral

How long does it take you to commercialize new technology?

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In 1965, DuPont scientist Stephanie Kwolek synthesized the first Kevlar polymer, an amazing fiber with five times the strength of steel. DuPont invested several hundred million dollars to commercialize the technology for tire cords, with disappointing results. It would be another decade before the company found its first major market for this material: bullet-proof vests.

How well does your company commercialize technology? Want to do it faster, more efficiently, and with greater confidence? You can, with six steps outlined in this white paper, Commercialize technology in 6 foolproof steps.

More in this 2-minute video, How to pursue transformational projects

Consider a 3-step plan to build your growth capabilities.

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If you hired a great “business growth” coach, she’d probably have you follow the same plan as a golf or football coach: 1) objectively assess your current capabilities, 2) develop a comprehensive improvement plan, and 3) track your progress in improving these capabilities.

Why not follow this same approach for building your organic growth capabilities? Step 1 can be a free diagnostic of your business’s growth capabilities at www.b2bgrowthdiagnostic.com, which benchmarks your business against others on 24 growth drivers. You can then run this free diagnostic annually. The key word here is capabilities: Too many leaders fixate only on results, forgetting that capabilities drive results.

More in 2-minute video, Build your growth capabilities

Don’t get the math wrong on your company’s stock price.

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If your company has a P/E ratio of 20, only 5% of its value comes from this year’s performance (that is, your earnings this year). The other 95% comes from the market’s expectations of your company’s future: That’s all that’s left.

So business leaders probably spend 95% of their time where the value is… ensuring future growth will be rapid, profitable and sustainable, right? Ummh… well… not so much. Strangely enough, many management teams fixate on this year’s results. You say your investors won’t let you think past this year? What about Amazon, that took 7 years to turn a profit? Warren Buffet said, “Companies obtain the shareholder constituency that they seek and deserve.”

More in this 2-minute video, Shareholder wealth is a poor goal

How many “builders” do you know?

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A builder is someone who drives business growth by delivering real value to customers, brushing aside fads, short-term distractions, and financial gymnastics. Others are remodelers, improving efficiency, quality & costs…but if nothing new is built, they lead a race to the bottom. Others are decorators, trying to boost “curb appeal,” as they focus on quarterly financials. They’re engaged in a spectator sport, not a participant sport. Finally, some are realtors, reaping their rewards during M&A… when the work of others’ hands changes hands.

Does this mean you should forget about operational efficiency, financial reporting, or M&A? Of course not. But what is your passion? For the builder, it’s delivering customer value and driving organic growth over the years.

More in this 2-minute video, Be a business builder

What’s the first duty of any business leader?

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I believe the first duty of any business leader is this: “Leave your business stronger than you found it.” I’m unimpressed by leaders who prioritize short-term results and stock prices to the point of degrading growth capabilities and sacrificing the future. I’m mystified when companies enrich a business leader today who is working to impoverish the business tomorrow.

What your business really needs is a builder… someone who brushes aside financial gymnastics and business fads. Someone focused on created value for customers that delivers organic growth for their business. For more, see the 2-minute video, Be a business builder. Also consider a new metric, the Growth Driver Index, which measures how well a business leader is investing in long-term growth capabilities.

See white paper, New Innovation Metrics.

Your business growth works like an extruder.

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Extruder Die: This “output” represents your financial results. Fast-moving, high-quality output is like top-line growth and profitability. Feed Hopper: These are market-facing innovation projects supported by customer insight. Drive Screw: This is the work needed to transform the feed into high-value products, done by skilled, focused people.

The only way to get better extruder die output is to focus on the feed hopper input and drive screw horsepower. Watching the extruder die is just a spectator sport. Which is precisely what you’re engaged in during financial reviews. Wouldn’t you rather be in a participant sport? Then go to your feed hopper, and work on new products customers will love. See 2-minute video, Extend your time horizon.

More in article, B2B Organic Growth: 8 top lessons for leaders.

4 Steps to joining the Reliable Growth Club

Reliable growth is elusive, especially for companies pursuing quarterly shareholder appeasement. Join the Reliable Growth Club through B2B customer insight.

Here’s the scene: You are a B2B business leader unhappy with your membership in the Shareholder Appeasement Club and its quarterly meetings. You want profitable, reliable growth so you are free to captain your ship, not some Wall Street analysts. But what should you do—not in the abstract—but in concrete, actionable steps? Before exploring admission ... Read More