Blog Category: Organic Growth

Are your “P” and “PC” out of balance?

p pc balance

“What is P PC Balance?

Decades ago, Stephen Covey explained we need to balance “P” (production) against “PC” (production capability). Today many companies just focus on this year’s results (P), without building the capabilities needed for future growth (PC).

Production Capabilities are the PC

There is a natural law of harvesting: sowing and reaping. And the sowing must come before the reaping. When we don’t understand this, the “P PC Balance” will make that profitable future difficult to achieve. Jeff Bezos has taught that this year’s profits have to do with the work done years ago. Further, we know that we need our PC to contain the core components of tools, processes, and  people.

Tools are Production Capabilities

“P PC balance” must consider the tools required. Tools increase efficiencies. They reduce errors. The modern B2B firm must understand how to leverage tools to its advantage. From voice of the customer software to web conference services, this is not a place to pinch pennies. Let’s also get more sophisticated about the language of finance, which is how success is measured.

Processes are Production Capabilities

“P PC balance” must consider the processes. For example, we must know  how to allocate resources. That is, we must optimize the risk between risk and reward with our portfolio management system.  We need our stage-and-gate system to keep development marching along. And we need processes for pursuing riskier investments, or, we’ll look at our new initiatives – and find that they are all incremental in nature.

People are Production Capabilities

And last, but certainly not least, “P PC balance” must consider people.  They are the most important assets a firm has.  And yet, how often, during tough times, do we see massive layoffs? How often to we watch knowledge and experience literally walk out the door.  Fail to maintain the talent level and bigger failures are sure to follow. And don’t just keep them, but invest in their learning and careers. There should be a high degree of alignment.

There is no doubt that there’s tremendous pressure on executives to perform. But don’t just hit the reset button and start over again every year.  Sell the vision, sell the process!  Build the future that you (and your firm’s investors) want.


More in article, B2B Leadership: Time for Greatness

It’s better if the project team—not management—stops a project.


No team wants to waste time on a loser: Life is too short. So if management has to stop a project, the team was inexperienced, communicated poorly, or had different expectations than management. All these ailments are addressed by requiring every team to use a common business case template, not their own, start-from-scratch PowerPoint® presentations.

More in article, How Leaders Can Accelerate New-Product Development

Most suppliers expect to grow faster than their served markets. This is usually fanciful thinking.


On average, you and your competitors will grow at the same rate as the markets you serve. Don’t feel entitled to this. If a competitor develops a blockbuster, you’ll be happy to minimize your sales decline. Thinking otherwise is like 1970’s Detroit auto-makers assuming Japanese competitors would keep producing junk.

More in white paper, Catch the Innovation Wave (page 15).

Recalibrate your time horizon

New research shows huge financial benefits realized by companies exhibiting long-term behavior. And yet, short-termism often prevails. Here’s the reality: your financial results today are just the future someone else created years ago. Isn’t it time to make your career a participant—not spectator—sport?

More in article, The Inputs to Innovation for B2B

Shareholder value: Great result. Lousy goal.


Increasing shareholder value is simply the result… the “effect.” What’s the “cause”? It’s profitable, sustainable, organic growth. Demonstrate this and stock prices will follow like goslings after their mother. Quit performing for Wall Street analysts, who have never created real value and couldn’t do so if their bonuses depended on it. Instead, work for customers who will appreciate and reward the value you create for them.

More in article, B2B Leadership: Time for Greatness

Your “future you” will thank you.


Don’t let your future be “that time you’ll wish you’d done what you’re not doing now.” You’ll be thankful later if you recalibrate your time horizon now… diverting some of your short-term attention to the future of your business. Besides, what you do this quarter is largely a spectator sport. The prices, profits and margins we wring our hands about during financial reviews were determined years ago by the new products created then for customers.

More in e-book, Leader’s Guide to B2B Organic Growth (Lesson 7).

Don’t get lulled into complacency by “inherited growth.”


Long ago, clever employees at your company developed industry-leading products. Most of your growth and profits today probably come from these sturdy product platforms. Don’t count on inherited growth continuing: Every year, purchasing agents and competitors are working diligently to commoditize your specialty products. Glad I could cheer you up on this.

More in white paper, Catch the Innovation Wave (page 14).

What’s your leadership style… “Interior Decorator” or “Builder”?


If you’re mainly concerned with making the place look good quarter after quarter, you’re an Interior Decorator. Jeff Bezos was a Builder… running Amazon for seven years before turning a profit. The stock market still applauded him, because he had a building plan they could believe in. As Warren Buffet said, “Companies obtain the shareholder constituency that they seek and deserve.”

More in article, How to become a great business leader

Catch the innovation wave

In the last century, Detroit automakers fell behind Japanese competitors in the Quality Wave. Later, we saw winners and losers in the Productivity Wave. We’re now in the Innovation Wave, with huge consequences. Some B2B companies will win by moving innovation from “hope” into a new science.

More in white paper, Catch the Innovation Wave

There are three types of growth. You can control one of them.


The first is inherited growth from products launched long ago, which now “carry” your business. The second is market growth… the tide that lifts all boats. You can only impact the third—earned growth—by doing a better job than every competitor in understanding and meeting the needs of a market. This means it’s easy to be lulled into thinking your underlying growth is greater than it is.

More in white paper, Catch the Innovation Wave (page 14).