Sustaining Revenue Growth—Are You Up for the Challenge?
So, what do you think is key to consistently growing revenue? I firmly believe that the first step is to have a good strategy. And how do you know that your strategy is right? It’s good when your revenue growth is over 20% or is at the top of your industry group. However, growth is not easy to sustain.
In our last blog, we focused on the importance of strategy and having the right talent on your team to help forecast the future. While this is essential to building a high-growth organization, we have seen many an organization develop great strategy and forecast well and still not sustain growth. So what else is needed?
I’ll answer that question by telling you about my client and friend. Raul runs a very successful and fast-growing aviation company. Recently, he took me flying in a six-seat airplane. In our mission for the day—namely, going to lunch—he took me through his routine. And that routine is one that I believe exemplifies the way to grow a business at record levels consistently. The keys to this routine included having everything he needed to see on one page, looking at leading indicators, and having great communications systems.
If you think about it, pilots regularly do what a CEO needs to do. When we got to the plane, Raul had a routine that I will call “leading indicators for a safe flight.”
-He inspected the entire plane to ensure everything was the way it should be (e.g., equipment checks, fuel check, etc.).
-He did not take off until he knew that he was not putting himself, his plane, and his passenger in danger.
-He knew where we were going and had the flight charted out.
-He had the proper training and knowledge to adapt to conditions if unexpected events occurred.
-While we were in flight, he had everything he needed to see on one panel to stay on course and fly a successful mission.
-Lastly, had anything gone wrong, there was a communication system in place to address issues.
Let me show you how this translates into the world of the CEO.
Goal Alignment with a One-Page Control Panel
Goal alignment is key to consistent growth. The best way to do this is to reduce your strategic and business plan goals to a “one-page” format. Not only is this achievable, but it is also imperative. The concern of many leaders is that there are many moving pieces in their business, and they tend to want to control all of those pieces. This causes a lack of focus and too many unfinished things. Rather than feeding the entrepreneurs’ desire to control it all, the one-page format forces you to focus only on what is most important to you now.
Using this methodology, everyone has the same control panel but with different measurements, depending on their roles and responsibilities. Some of the columns are the same for everyone, such as core values, vision, company targets, and brand promise. However, there are columns on the control panel that are specific to the individual/department, such as accountability, actions, and measurements.
There should be no more than three key priorities and core measurements of focus on this control panel. In the end, all align with the CEO’s control panel. By utilizing this method, you provide for complete alignment throughout the entire organization.
As part of its strategic planning processes, an organization must identify core stakeholders and processes that drive growth. Once identified, it is imperative to have the two or three leading indicators that will let you know in advance that you are well on track to do well. By focusing on these leading indicators, you will better execute your strategy and thus better sustain your growth.
A great example of this was a technology development firm that was growing over 100% per year. After four years of consistent growth at incredible levels and being on the top of the most highly-recognized magazines’ lists (e.g., Fortune and INC), they saw a decline in performance and turnover in employees who were considered stars.
Initially, the CEO thought that the company was outgrowing his people. Ultimately, he realized that he was burning everyone out. As a result, the company developed a new leading indicator of “Employee Hours.” They looked at all of the projects and made it a company requirement that all projects were staffed and planned to fit within a “60-Hour Work Week.” This became a critical leading indicator of their success and sustained growth. This goal revolutionized the way the company thought, improved quality, employee retention, and customer satisfaction, reduced cycle time, and, yes, increased growth.
Another great leading indicator highly recommended for every business is the Net Promoter Score (“NPS”). In the book, The Ultimate Question, author Fred Reichheld introduces the NPS as how leading firms transform their customers into promoters. The survey focused around one straightforward question, “Would you recommend us to a friend?” The analysis shows that, on average, if a company increases NPS by a dozen points versus its competitors, it can expect revenue growth to double. This is a radical change from the customer satisfaction score, which is entirely ineffective in predicting a company’s success.
You would think, based on the title of Patrick Lencioni’s book, Death by Meeting, it would be a book about companies having too many meetings. Actually, the point of the book is that companies have too many bad meetings. Your organization must have a system of daily, weekly, monthly, and quarterly meetings that focus communications around what is critical to driving your business, preventing bottlenecks before they happen, and promoting teamwork. Design meeting agendas to discuss those topics that will drive your business, using the information you already outlined in your “one-page” plans.
Growing consistently at record levels starts with strategy. Once you have developed a good strategy, you may not grow as much as you should because of poor execution. The key is to learn from my friend Raul to be a good pilot. Have a good flight plan that you can fit on one page, use leading indicators to identify issues early, and have an excellent communications system, so you can address problems quickly and maximize growth and profits.
So are you up for the challenge? Or perhaps you need help focusing on the critical issues? At Activate Group, our business coaches can help you develop an effective strategy designed to achieve sustained revenue growth. To learn more about how we help you with this and may other issues, schedule your FREE 30-MINUTE CONSULTATION now. We look forward to being of service to you.