Tiffani Bova is the global customer growth and innovation evangelist at Salesforce and author of Growth IQ: Get Smarter About the Choices that Will Make or Break Your Business (August 14, 2018; Portfolio). Prior to working with Salesforce she was a VP, Distinguished Analyst and Research Fellow at Gartner. Bova has also lived in the fast lane of high tech, leading sales organizations, driving growth and creating durable competitive advantages at Sprint, Inacom, Interland (web.com) and Gateway Computers. We asked her to share some insights from her book.
What made you want to write this book, why now?
Over the years, I’ve been asked by executives at the world’s largest companies to help them with the one thing that will help drive growth. I realized that too many companies seek the one right move – which rarely exists – in order to grow. The reality is, when it comes to growth, the one thing is that it’s never just one thing!
So we can ask, why? Why do companies look for the one right move? Maybe it’s because the do what seems doable: find one problem area to fix, or launch one big initiative to boost their sales numbers, or even repeat a growth strategy that worked in the past. Unfortunately, companies rely on strategies that worked for them in the past, but may have now outlived their purpose. The outcome is not pretty.
Often there is a misalignment between perception and reality, keeping a business-as-usual mindset can quickly prove fatal. 87 percent of all companies go through a growth stall at some point, and only a small percentage of them ever recover. And here’s the stunner: 94% of executives running companies with more than $5 billion in revenue said that internal, not external obstacles, keep their companies from growing profitably.
Wow. So what did this realization do for you – and the book?
I came to realize that it wasn’t just about what growth strategies companies choose but rather the context in which a strategy is deployed and the combination and sequence of initiatives. That’s what the book is about. Growth is far less complicated than most people make it out to be. You may be surprised to learn that most growth efforts can be categorized into one of ten growth paths.
No growth path is written in stone. But, and this is the foundation of the book, these ten paths have been used by countless companies to grow top-line revenue. I wanted to help companies understand that these paths are available to them – whether they are a giant multinational or a small start-up.
What are the 10 Paths to Enlightenment, er, Growth?
In the book I look at each path in detail – but it’s useful to take a step back, and view them all together:
- Customer Experience: Inspire additional purchases and advocacy
- Customer Base Penetration: Sell more existing products to existing customers
- Market Acceleration: Expand into new markets with existing products
- Product Expansion: Sell new products to existing markets
- Customer and Product Diversification: Sell new products to new customers
- Optimize Sales: Streamline sales efforts to increase productivity
- Churn (Minimize Defection): Retain more customers
- Partnerships: Leverage third-party alliances, channels, and ecosystems (Sales, Go-to-Market)
- Co-opetition: Cooperate with market or industry competitor (Product Development, IP Sharing)
- Unconventional Strategies: Disrupt current thinking
But it isn’t enough to have the right new growth strategy. Companies must fully understand what the current market context is prior to making any moves. Otherwise, even the right decision, or the right growth path can backfire – putting you in the wrong place at the wrong time.
Can you elaborate?
Sure. So choosing the right growth path should always start with understanding the circumstances or events that form the environment within which your company competes. You have to understand the threat or opportunity the context brings, along with the combination and sequence necessary to support the chosen growth paths.
Context includes current social and economic conditions, the existing product portfolio, the competitive landscape, and corporate culture. Combination is the act of selecting key actions that can positively impact outcomes, when done together, and sequence is the act of establishing a priority, order, and timing to these actions.
Creating a multiplier effect is far more powerful than just focusing on one or two efforts in isolation.
A key thing to remember is that your conditions are not the same as your rival. Don’t try to copy what you think your competitors are doing. Imitation is not the path to success, especially in an overcrowded marketspace. Don’t get distracted by what landed you in the current situation. Keep your mind – and your options – open. In the book, I try to show readers how different companies made their growth decisions, and provide a useful framework to deconstruct and understand their growth efforts. Companies like UnderArmor, Sephora, Shake Shack, The Honest Company, Walmart, Mattel, Marvel, etc. My goal is to help executive make better decisions for growth and avoid the obstacles that have derailed others before them.
So how do companies measure growth? Are there specific metrics we should be looking at?
In the book we have two answers:
- Company health – measure orders, shipments, returns, product repairs, market share, employee turnover, profit margins, cost of goods sold, salaries, etc.
- Measure the metrics specific to the growth paths you have chosen to execute
The second means each path has its own metrics. Here’s a quick rundown:
- Customer Experience: Net Promoter Score (NPS)
- Customer Base Penetration: RFM (recency, frequency, monetary)
- Market Acceleration: New logos acquired
- Product Expansion: New product usage, mix against current portfolio
- Customer and Product Diversification: Adoption rates in new customer/categories pursued
- Optimize Sales: Quota attainment
- Churn (Minimize Defection): Churn rate and customer defection rates
- Partnerships: Joint sales/revenues
- Co-opetition: New joint product development and market launches
- Unconventional Strategies: volunteer hours of employees
Anything you want to leave us with?
Yes. The best leaders know that growth needs to be countercyclical. That is, the best time to create the next big opportunity is when things are going well, not when you are struggling. So many companies have failed because they worked on yesterday’s context for tomorrow’s business. Also: the most important resource you have when embarking on growth is preparing your people. The most successful companies in the world regularly change direction and do it with such confidence and coordination that it looks effortless. We know it is anything but.
Thanks so much.
INTERVIEW by Christian Sarkar