Top 5 learnings about growth companies in 2015
People – High-growth companies foster a culture of accountability. Scorecards, a concept from Topgrading (Brad & Geoff Smart) a proven methodology to help you hire and retain “A” players while giving you tools to stop hiring “C” players, serves as a guide for hiring decisions and is a powerful performance management tool. Through quantifying the expectations, competencies and behaviors of a good hire and the right fit for a position, Scorecards are key to building a healthier culture of accountability. Expect to see usage of Scorecards continue to rise in growth companies.
Strategy – Growth companies know that their Brand Promise is a key part of their business strategy. It sets you apart from all your competitors and it is what brings customers to you. Your Brand Promise needs to be both competitive and measurable. Ask yourself these questions:
• What is your core customers’ “hair on fire” issue and are they willing to spend time and money to douse this fire?
• How do you solve their issue in a different, uncommon or unique way?
• Have you developed messaging that avoids industry buzz words such as “best practices,” “return on investment,” “we care,” etc.?
• Are you measuring and tracking metrics to ensure you are delivering on your promises?
Execution – Successful growth companies make the time to plan and reflect, despite any excuses. Taking time to work on your business is just as critical to your success as working in your business. This means scheduling time to plan prior to the start of new quarter and making time after to identify lessons learned.
For upfront planning, start mid-way through the current quarter. Identify how much of what you plan to accomplish for the year can be accomplished in the upcoming quarter. Once that has been determined, create a 13-week (quarter) race plan to get you there.
You must schedule time to reflect at the end of every quarter. Lessons learned can sometimes be more important than the actual results. As you are looking back at the accomplishments and areas needing improvement, it’s important to evaluate your people. Would you enthusiastically rehire all of them? Are they happy and engaged?
Cash – Growth companies know what drives their economic engine. One of the most important components of this engine is optimizing Labor Productivity. Why? Labor is consistently the highest cost in almost all business models. For every dollar you spent in labor, do you know how productive the labor was? If you can optimize Labor Productivity, you will have tuned up the greatest expense in the business to help ensure your profitability.
Growth sucks cash. Knowing how to optimize cash, whether through eliminating mistakes, shortening cycle times or improving your business model, is critical.
Learn – Growth companies out-learn and out-think the competition in the areas of strategy, leadership, sales, marketing, operations and cash. Whether it’s attending leadership conferences such as the Fortune Growth Summit or providing the most up-to-date and relevant books, they invest in their leaders to stay current. I recently heard someone say, “those who don’t read are only slightly better than those who can’t.”
Learning also means you are taking the time to identify and question: “What are the major trends — significant changes in technology, distribution, product innovation, markets, consumer, and social trends — that may shake up not only our company but our entire industry? Which trend can give us wind at our back if we embrace it? Which trend can hurt us if we ignore it?” It’s also important to keep in mind one trend can sometimes do both.