View from the Cloud

by Lou Killeffer

View from the CloudEditor’s note: Lou Killeffer caught up with Wayne Simmons and Keary Crawford, CEO and COO, of The Growth Strategy Company as they launched their new growth platform, GrowthCloud, in San Francisco.

Lou Killeffer: The pursuit of business growth is on everyone’s minds and lips these days. But for all the time, energy and resource it rightly commands, there seems to be a pervasive lack of understanding about just how real growth is achieved, much less sustained. Why is growth so illusive?

Wayne Simmons: We see a few contributing factors.  First, many companies depend heavily or exclusively on marketing and sales performance as the primary sources of growth. The problem with this approach is that both marketing and sales are inherently tactical and only designed to generate short-term revenue. This short-term, tactical focus creates a gap between current revenue and future growth projections over the medium to long-term.

Next, we see that a lot of companies are simply not growth-focused. What I mean by that is, in many cases companies have become hard-wired to deliver results by improving operational effectiveness.  Companies that have this type of orientation can fall into the trap of delivering ever-higher levels of management control, efficiency and productivity, all unfortunately, at the expense of growth.

Finally, the information required for real business growth is often difficult to find; unorganized; and in some cases non-existent. These critical pieces of information — things like customer profiles, market analysis, and competitive analysis — are often paper-based or locked in the heads of individual employees or even outside consultants. This creates an information gap that can make it difficult for companies to craft coherent or effective growth strategies.

LK: In your new book, GrowthThinking: Building the New Growth Enterprise, you all set out to demystify and literally model the successful pursuit of growth. In fact, you show how growth can be broken down into its constituent parts and actually engineered through a sequence of processes. In effect, a method that can be applied again and again across any organization focused on the growth of sales, revenues, and profits. It’s sounds too good to be true. Is it?

Keary Crawford: Lou, it is definitely not too good to be true. (Smiles)

We believe strongly that business growth should be viewed as a formal business discipline and not simply the function of chance or random acts; however inspired or well intentioned! So, instead of creating some sort of “black art” associated with growth, we focused on researching, modeling and integrating what actually works in the real world.

We’ve all accepted for years that “you can’t manage what you can’t measure”. With that in mind, our approach emphasizes measurement of the true underlying factors, like the level of market attractiveness and relative competitive positioning, that drive sustainable growth outcomes. In addition, we freely adopt ideas, like divergent and convergent thinking, that have been around in the design-thinking world for a while. We’ve taken these powerful concepts to the next level by embedding them into an actual workflow that can be executed, optimized and repeated. So, collectively the language, systems and structures embedded within GrowthThinking all work together to provide a pragmatic solution to sustainable business growth.

LK: In the book, you cite a number of success factors and organizational competencies that must be present in a “growth enterprise”. I’d like to focus on what you’ve identified as the “Six Principles of the Mechanics of Growth”, a sort of best practices that transcend operational effectiveness to make sure entrepreneurship, growth strategy, and business innovation can take root and work. What are these six keys as you see them?

KC: The “Six Principles of the Mechanics of Growth” are essential to establishing the new behaviors and habits within companies and they include: Outside-In Observation, “Projectizing” Growth, Balancing Experimentation and Exploitation, Organizing for Growth, Hard Wiring with Specialized Tools, and Making Someone Accountable for Growth. Successful growth enterprises adopt these growth-focused mechanisms and embed them into their day-to-day operations to help ensure that they’re “doing the right things” and “doing the right things right” to consistently generate growth opportunities and strategic growth outcomes.

LK: Why is “outside-in observation” so important; what does that reveal?

WS: Many companies view the world in which they operate from the “in-side out”. This leads to really reduced peripheral vision and makes them vulnerable to missing shifts in customer behavior, emerging trends in the marketplace, or the unexpected moves of their competitors. In contrast, growth enterprises build their organizations to be “outside-in” and embrace observation, feedback, and interpretation of the external factors driving their existing customers and prospects in both existing and emerging markets. This outside-in orientation allows companies to view, interpret, and understand the marketplace differently; identifying articulated and unarticulated needs to position themselves better for future growth.

LK: What does it mean to “projectize growth”? Is that where so many companies stumble?

KC: You know, most large companies are really good at organizing, initiating and completing hundreds, if not thousands, of projects a year. However, where they stumble, even though growth is the number one challenge in most companies, their growth-focused initiatives just aren’t treated with the same rigor.

Growth enterprises know that growth doesn’t happen by chance – they take deliberate steps to convert innovation and strategic intent into tangible sources of growth. This happens by organizing ideas and strategies into specific “projects” that can be properly resourced and monitored through to implementation.

LK: How does a company “balance experimentation and exploitation” as you refer to it in your book, and to what end? Is one of these more important than the other?

WS: Certainly some companies focus too much on today’s value exploitation while not experimenting enough to find future growth opportunities.

To address this issue, we advocate that companies manage the interplay between experimentation and exploitation by allocating strategic resources   (time, capital, leadership attention, etc.) based on the company’s specific circumstances. Along those same lines, whether experimentation or exploitation is more important depends largely on the state of the company, its markets and industries. For example, when companies face hyper-competition, experimentation of new offerings, customers and business models becomes pretty important.

LK: What sort of new and “specialized processes and tools” do you all recommend as required? How do these correspond to a company’s more traditional tools and measurements?

KC: The vast majority of management tools in use today are analytical in nature and focused on improving efficiencies, controlling production and minimizing  variations. However, these legacy tools aren’t capable of helping companies re-imagine their markets, rethink the ways they create value, or renew their value to customers, shareholders, and employees. To generate new growth   opportunities, companies should use tools specifically designed for that purpose. These new tools, which include customer value maps, customer journey maps, strategy canvases and our “Growth Strategy Grid” are specifically designed to identify customer pains, unarticulated needs, competitive patterns, market dislocations, and gaps.

LK: Are these old and new tools in conflict?

KC: Not at all, these new tools add visualization, design and collaboration that augment and enhance traditional analytical tools.

LK: How should a company approach “organizing for growth”?

WS: “Organizing for growth” contrasts somewhat dramatically with the more traditional command and control structures found in many if not most companies. Those companies that are structurally designed to foster  engagement between executives, employees, partners and customers have certainly organized themselves for growth. These alternative structures can be implemented at the team, group, or enterprise levels, and are designed to be more flexible and collaborative and therefore more entrepreneurial.  As a way to bypass legacy thinking and established systems in pursuit of growth, companies should consider adopting these new kinds of organizational structures as part of, or indeed as entirely separated from, the existing enterprise.

LK: How do you go about making growth “everyone’s business”, so much so that you engage and equip the majority of employees to actively contribute to growth?

KC: You know, we feel that growth is everyone’s business, that all levels of the company have a vested interest as valued partners in the pursuit of strategic growth. We believe that implementing and sustaining a series of growth-focused roles that are superimposed over the existing organization, analogous to Lean Six Sigma “belts”, black belt, green belt, etc., is a great way  to encourage broad based engagement and knowledge diffusion across the company.

LK: But still and all you must make someone, some executive, or some group of executives, accountable for growth, right?  When everyone’s responsible, no one is? So who’s typically in charge of delivering growth beyond the base business; who should be?

WS: Our most recent research shows that the majority of companies, fully 52%, feel that the responsibility for business growth falls entirely on the CEO.

However, chief executives and P&L owners have a wide array of other responsibilities that makes it impractical for them to be singularly accountable for sustainable business growth. We feel that companies should be more deliberate and pragmatic about identifying a senior leader that’s accountable for growth. However, we don’t advocate adding another “C-level” executive to existing leadership teams. Especially when an existing Chief Strategy Officer (CSO), Head of Strategy, or VP of Strategy, already holds the proverbial “seat at the table” and explicit responsibility to shape the company’s future strategic direction.  We believe that adding growth-focused responsibilities equips the CSO as the virtual “Chief Growth Officer” who has the explicit goal of delivering growth beyond the existing business, creating the cultural conditions where growth can be sustained, and improving the company’s future growth prospects.

LK: Wayne wonderful. I really appreciate your time today. Keary and Wayne, thank you both.

WS: Your welcome, Lou. It was fun.

KC: We enjoyed it. Thank you.

image credit: growthstrategy.com

The Growth Strategy Company has provided content and sponsorship to innovationexcellence.com

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How Companies Pursue GreatnessLou Killeffer is a Principal with Five Mile River Marketing. A versatile marketing strategist, Lou’s passion for communications and innovation has made him a trusted advisor to some of the world’s most enduring businesses and brands, from AT&T to UPS, where he helps enterprises embrace change, look ahead, and focus on sustaining success.

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  1. Looks like this could be the next iteration of design thinking, more robust. I love the “outside in” approach. Great way of articulating the concept! Thanks for tracking the growth strategy co down Lou!

    • Thanks for the thoughtful comment. Alongside Growth Thinking, we remain big fans of systems thinking and design thinking as core elements of “modern” corporate culture…when you look at the companies that are really successful over the long-term, they are excellent in all of those “ways of thinking”. In our view, one of the new leadership challenges will be to manage the natural tensions between those three mindsets in order to create value on the top line, bottom line and with customers.

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