Marketers are always looking for ways to help their company grow, but are not always sure how to do this. There are many growth models that can give guidance, but they all have a different focus so which one suits best to apply? Well, that depends on the companies’ starting point. There are three starting points from which growth can be achieved. Each starting point has its own growth model that facilitates a companies’ growth. The starting points are not necessarily mutually exclusive, however, they do provide different perspectives from which a growth challenge can be approached.
The three starting points are:
Knowing a companies’ starting point is extremely important because it happens too often that managers are so fixated on their goal (achieving growth) that they don’t think about what the company truly needs. As a consequence solutions are developed for the wrong problem. For example, a new colour or flavour is added to the existing product portfolio, while the company actually needs fundamental change to stay relevant in the current market. Analysis of the true needs of the company will prevent a tremendous waste of money, effort and time and is, therefore, worthwhile doing.
Starting point 1: How to find growth potential?
Sometimes a company needs to go back to basics and reinvent itself in order to achieve growth. This can be the case when, for example, technological developments have changed customer demands, which the company no longer can fulfil, or when a competitor has disrupted the market with a completely new business model.
To discover whether this is the right starting point for a company, answer questions like:
Is there in the long term still a need for the company’s product?
Does the company have the right skills to fulfil its core function in the future?
Are there competitors with a disruptive business model that are, therefore, a significant threat to the company’s market position?
When the answers are respectively; no, no, yes, starting point 1 is a good starting point for the growth challenge.
A growth model that helps a company to analyse its own performance to find growth potential is the TNXTO Driver Model – developed by The Next Organization. The driver model helps companies to detect what they need to improve and how this change will affect the other elements in the company. Thus, a change in strategy must lead to a change on the tactical level and operational level. But it also works the other way around; opportunities to improve operations and tactics can inspire a revision of the strategy.
This way companies can align their strategic, tactical and operational goals for customer orientation, retrieve their focus and grow from there. The uniqueness of the approach is that the customer-oriented service is the link between strategy and operations.
Figure 1 – The driver model for customer-oriented change
Starting point 2: How to realise growth?
When a company has a strong base and clear value proposition, it can build on that strong base to realise growth and choose the second starting point. Potential ways to grow are by targeting new customer segments, expanding to new regions, developing new products and developing additional services.
There are several models that help to determine the ways of strategic business growth, but the most famous one is the Ansoff Growth Model. The model shows four strategies that can be used to grow. It also helps analyse the risks associated with each strategy. When using this model, managers start by analysing all four options. Then they analyse the risks involved in each option and develop a contingency plan to address these risks. Finally, they choose the best option for their company.
Figure 2 – The Ansoff Growth Matrix
Starting point 3: How to manage growth?
Once significant growth has been achieved it has a serious impact on how a company is run. In order to deal with the impact, internal changes need to be made to support its success. When this happens growth can be achieved from starting point 3. Managers can recognise that a company is facing a crisis or transition is when:
People feel that managers and company procedures are getting in the way of them doing their jobs.
People feel that they are not fairly rewarded for the effort they put in.
People seem unhappy, and there is a higher staff turnover than usual.
A model that offers tools to help a company to handle its growth is the Greiner Growth model. Greiner’s Growth Model describes phases that companies go through as they grow. Each growth phase is made up of a period of relatively stable growth, followed by a “crisis” when and what type of major organisational change is needed if the company is to carry on growing. After identifying which phase a company is in and which crisis is coming, the model explains what is needed to overcome the crisis and continue growing.
Figure 3 – The Greiner Growth Model
One model does not fit all growth questions. It depends on a company’s starting point and corresponding needs, which model will help it best. Managers need to make sure to carefully analyse the company’s situation to discover where its bottlenecks and/or needs lie, before they choose a growth model and strategy to pursue.