Where is the Growth?

By Michael Perla on Nov 28, 2013

2 Minute Estimated Read Time

 

I have been talking to a lot of clients recently about top-line growth. There are very few companies that don't want to grow – you can only cut expenses so far. The “Slim-Fast” corporate diet eventually makes companies weak and brittle.

The next line of our conversation is usually around organic vs. inorganic growth. Per the latter, some companies can buy their way to growth, but it may mask the true performance of the underlying, core business – the organic part. We also know that many M&A transactions do not yield the revenue and cost synergies they expect. 

In the end, top-line growth often equals a higher stock price, more opportunities for employees, and better engagement – most people want to work for a company that is innovative and growing – and if they can benefit via stock appreciation, all the better. Think of Microsoft in the early days vs. now – they are trying to get their mojo back.

Sales organizations, in particular, are often at the ‘last mile’ of the growth equation. Sales professionals are the ones in front of prospects and customers articulating value propositions, handling objections, and differentiating themselves vs. the competition. If there is significant, pent-up-demand, they may just be taking orders, which is another topic all together.

So the million or billion dollar question for a lot of companies is:

Where are the growth pockets/spikes in the marketplace - current, adjacent or new markets? 

For sales organizations, the question is both strategic and tactical. Where is the growth now and in the future and do they have the right resources deployed to effectively capture some of it.  In many ways, this gets back to one of my timeless definitions of strategy:

The art and science of developing and deploying your scarce resources to maximize risk-adjusted value.

As part of my growth conversations, we never fail to hit the topic of cost of sales or sales investments. The questions usually revolve around “what investments do I need to make to profitably capture the growth?” There isn’t an easy answer to this question.  It often involves some analysis around addressable market, sales productivity, and what current team or unit you could ‘take from’ or ‘starve’.

Since most firms are portfolios of businesses, the growth exploitation strategy is usually a rotation of assets – take resources from low growth areas and rotate to high growth markets. As part of these efforts, we’ve seen the following:

  • Some sellers can ‘carry’ more in their sales bag; others cannot. Depends on the nature of the sale, the offerings, and the market.
  • As markets become more segmented, it can be challenging to get valid growth projections – some qualitative analysis is often warranted
  • Determining how the rotation strategy will impact the lower growth areas is challenging – for example, how much will be lost in sales and what can be maintained. The other strategy is to sell and serve the lower growth market in a more cost effective way.
  • There is a strong need to understand the nature of the buyers – who are they, what are they responsible for, and what are they measured on? Also, across markets, offerings, and company size, are the buyers different or similar?

I don’t think the growth questions will ever go away. They are timeless and enduring and a foundation of our capitalistic system. In general, most companies and sales organizations operate on the principle of Growth = Good. I don’t see this changing. But growth may also have some unintended consequences … in future posts; I’ll delve into the topics of profitable growth, deployment risk, and disruptive innovation.

Michael Perla

Written by Michael Perla

Michael Perla is a contributing writer to Symmetrics Group's blog and co-author of the book "7 Steps to Sales Force Transformation." Michael specializes in providing actionable insights to marketing and sales organizations to help them increase pipelines, win ratios and productivity. In addition to working as a sales performance consultant, Michael has worked as a sales overlay, head of sales operations, and head of strategic marketing planning. Michael currently serves as a Director of Business Value Services at Salesforce.

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