B2B Organic Growth: Moving to earned growth
A large, unexpected revenue upturn this quarter is good news, right? It certainly feels good, but the satisfaction is fleeting. What you really need is growth that is unrelenting, earned and reliable. When business executives don’t understand the nature of “good” B2B organic growth, they risk three pitfalls.
B2B Organic Growth Pitfalls
Pitfall 1. “Let’s have a great quarter.”
Imagine you did receive a nice shot of growth this quarter. It seems like a wonderful gift today, but in 12 months that blessing will turn into a burden. That’s because you’ll be held accountable for year-over-year results: Now you must repeat last year’s windfall… and then some.
What you really need is steady, unrelenting B2B organic growth. And this is also what the stock market wants. Think about it: Which companies’ stock are most highly valued… those with “yo-yo” financial performance, or those that just… keep… climbing… upward?
Sure, Wall Street will punish your stock price if this quarter’s results don’t meet expectations. But consider two points. First, Wall Street analysts don’t care about your company’s well-being. That’s your job. The stock market is driven by self-interest, specifically greed and fear. Do you really want that to be your company’s guiding light?
Second, Wall Street analysts are fickle. You’re trying to win a 5000-meter race, and they are screaming at you to win this lap. Do you want to run a well-paced race with a winning strategy? Or would you rather listen to spectators in the stands with side-bets on how you’ll do this lap?
Pitfall 2. “It’s time to grow now.”
I hear this all the time: “We just finished trimming our costs, and now it’s time to grow.” Another variation: “Our last CEO was all about operational efficiency, but our new CEO wants growth.”
This is nuts. If you run a business, B2B organic growth isn’t an initiative. It’s your job. All the time. Profitable, sustainable organic growth is the only way to ensure your company’s value keeps rising and your employees can count on stable employment. Who wins a race by wandering on and off the track?
If you run a business, B2B organic growth isn’t an initiative. It’s your job.
If you’re not focused on B2B organic growth today, you’re not standing still… you’re going backwards. As they say, “When you’re green you grow, and when you’re ripe you rot.” You’re either getting better or getting worse, because there’s no such thing as business stasis. In our race metaphor, losing your focus on growth means competitors are getting ahead of you.
Don’t rely on good luck for this: You need growth that is reliable. And for this you must pursue growth you have earned. Consider three types of growth: Inherited Growth, Market Growth, and Earned Growth.
Inherited Growth comes from high-value products someone at your company developed long ago. These are the gifts that keep giving… until they don’t. Purchasing agents and competitors are constantly trying to commoditize your products, and someday they will succeed. Market Growth is the tide that lifts all boats. It might feel good, but it’s neither reliable nor something that pulls you ahead of competitors.
The only one you can control is Earned Growth. This only happens when you surpass competitors in meeting customer needs. Be nervous if you hear a colleague say, “We grew at 5% this year… so we should be able to hit 8% next year.” Most of the growth you take for granted may be in someone else’s hands, not yours. (For more, see lesson #2 in our e-book, Leader’s Guide to B2B Organic Growth.)
Most of the growth you take for granted may be in someone else’s hands.
Pitfall 3. “We’re all about results.”
I can think of no endeavor in which those pursuing championships do not focus intently on building their capabilities… be it a gymnast, a chess master, or a golfer. I take that back: The one exception is the typical business leader. This person surely wants to win, but he or she focuses almost exclusively on results, not capabilities.
I’m not arguing against results; I’m arguing for balance in pursuing results and building capabilities. Steadily building your growth capabilities over many years will deliver far better results than just hitting the “reset” button at the beginning of each new year… and trying harder this year.
We’ve studied 24 growth drivers… capabilities that our research shows lead to profitable, sustainable organic growth. We even have a way you can benchmark yourself on these growth drivers. The chart to the right is a (real) depiction of how one company is doing this with our B2B Growth Diagnostic service.
Without building such capabilities, I don’t know how a company can have reliable B2B organic growth. You know your competitors want to win just as much as you do, right? So how can you hope to consistently beat them without greater capabilities?
This goes to the heart of what I believe the number one objective should be for every business leader: Leave your business stronger than you found it. It doesn’t matter how good those soon-forgotten quarterly financial results were. If the leader weakened the business by degrading its ability to grow—through either neglect or raiding capabilities for short term gain—that leader failed.
#1 Objective for every business leader: Leave your business stronger than you found it.
B2B Organic Growth: Where do I start?
If any of these pitfalls sound familiar, you might be wondering, “Where do I start?” What’s the first step in the pursuit of “good” B2B organic growth? I have two recommendations.
First become a student of “what works” when it comes to B2B organic growth. Does this entail a long benchmarking study by your company? No, the research has been done: Just download What Drives B2B Organic Growth. This research report reveals what over 10,000 years of B2B professional experience tells us “works best” for organic growth.
Second, benchmark your business’s current growth capabilities… the same 24 growth drivers examined in the above research. Just go do B2B Growth Diagnostic to learn about the free, no-obligation service we offer. It will take less than an hour of your time, and you’ll receive a 20-page report that includes the chart you saw above.
We wish you the best kind of B2B organic growth… unrelenting, earned and reliable!