Why We Don’t Grow Our Business – Leadership Mindset

We generally ask business teams we are working with, the question: “Why can’t you grow?” The answers are captured and filed away for future reference. We codified the data into subject matter that fell into three categories – Leadership Mindset, Organizational Skillset, and Operational Toolset. In our previous article we defined these “SETS “. In this article we will explore the major factors that prevent a growth mindset and some remedies.

Chapter 2. Leadership Mindset

By leadership, we mean that level in the organization responsible for the profit and loss of a business, and those who provide guidance and direction to the growth project teams. They are generally made up of business, marketing, and technical management. They control budgets and allocate resources. They report up through one or more functional vice presidents reporting directly to the CEO. The factors below best describe the leadership behavior that – in the minds of the project teams – are the primary causes for growth failure.

· “Too Little, Too Late” – ignoring the time factor.
· “Beware the Cannibals” – fear of losing control of the current business.
· “Stuck in Today” – inward focus with a silo structure.

These growth failure factors are not independent of each other and also not independent of both skillset and toolset issues, however they cry out loudly for fixing. We will examine the factors one-by-one and suggest approaches for changing leadership mindset that causes these behaviors. Survey tools and workshops can help leadership teams to both identify their growth mindset and impact on growth success rates. as well as engaging implementation mechanisms to transform leadership mindset into one that fosters and drives business growth.

“Too Little, Too Late”: Many projects take too long from concept to commercialization. Too many projects result in under resourcing with people working on too many projects. Teams spend too much time getting to and through gates. One team said, “It takes longer to get a meeting with the growth board than it does to do the work necessary to meet the stage requirements”. Actually they kept score and counted 57 elapsed days waiting for meetings to get through the first two gates vs. about 55 elapsed days of the team’s actual work time. The project was eventually rejected for fear of potential cannibalization of existing products. Later a competitor entered the market with a new offering similar but not as robust as the one rejected. The top three remedies are:

1. Prioritize what you work on. Resource to win, and if necessary reduce the bets to those that are most critical to success. The key is to require robust project charters with clear goals, defined business impact, required resources, and criteria for success. Quality of the concept description is a good barometer. If they can’t describe it, they don’t have a valid concept.

2. Simplify your process. Over the past several years most have added and added to process when they should be simplifying. You only need three decision points: the first after a robust market validation to clearly define the opportunity to enable the business case; the second after business case generation leading to product development; and third following product development leading to launch. Utilize coaches rather than process facilitators. Coaches take up less time, cost less, and focus primarily on content and getting results.

3. Utilize multi-functional teams, particularly technical and commercial. Often time is lost by poor communications between technical and marketing. Join them at the hip and save valuable time. Increase project leader’s communication capability. Decision makers need to know what they are deciding before reaching the decision points, and teams need to know the issues.

“Beware the Cannibals”: Many times growth initiatives fail at the same time existing businesses begin to lose growth, share, price, and position. Leadership focus is on the existing business attempting to blunt or forestall the tailspin. Growth resourcing grinds slowly and budgets are trimmed to the bare minimum. The fear of product cannibalism takes on an even greater influence in business decisions. The key here is to innovate with fewer, safer, faster, and simpler projects. Forget the homerun and start hitting singles. Demonstrate you can grow again.

1. Focus is king. Prioritize on the basis of speed, agility, and simplicity. Select the top few you can afford to resource for success. Generate charters that reflect the new growth strategy. Set timelines tight. Get technical on board to help set product specifications that can be developed quickly.

2. Invest in high quality upfront market validation. You need to get it right the first time. It is critical that you get a good understanding of value (price they will pay) and impact on existing business during this part of the process. Build your business case before investing in any technical development. Don’t waste what few resources you have. Evaluate the impact of the business case on your business strategy.

3. Get a few key customers involved early. Risk the fear of disclosure for early adoption. Naturally you would not do this if working on a homerun. Accelerate ramp up by using your sales force and key distributors more aggressively. They could use this as an offensive weapon against the price pressures of their current situation. Move your project teams on to the next set quickly. Repeat, repeat, and repeat until you have blunted the competitive erosion, and then begin to engage the bigger ticket concepts.

“Stuck in Today”: We dug into the main causes of inward focus and came up with one major issue – stuck in today’s business model. “We know who are customers are, what our customers want, and will pay for. If something changes they will let us know”. This head-in-the-sand attitude is one of the most difficult to address because it assumes your customers are in the same place you are and if not, they will let you know so you can react. Leaders who behave this way don’t recognize they have a problem until it is too late to act. An outgrowth of inward focus is the silo structure usually manifested in functional organizations not in sync that result in misaligned priorities across the business.

1. Recognize that you may not know what your customers need because they may not know what their customers want. Thus, you will need to learn the larger market unmet needs, and the current gaps in your customer’s value proposition, and consider aiming your value proposition at the customer’s customer. Do not fall into the trap creating internally generated product concepts, or even worse new products until you have completed building the market analytics.

2. Open your thinking to new and different business models including building increased service into your value proposition. Understanding real value is fairly straightforward, and begins with interviews that utilize an outcomes approach, and focus on the entire value adding chain values beyond how they value your existing product.

3. Incorporate “Market Driven” across the entire organization. Break away from a product forward strategy limitation. With a business orientation aimed at specific markets, resource allocation can be more clearly defined, and all functions can know their role in achieving a common market back strategy and innovation process. Decisions are driven by your emphasis on meeting customer values, how you go to market, and how you position your business in the competitive arena.

If you recall from Chapter 1, our thesis is that all growth barriers arise from either or all of Leadership Mindset, Organizational Skillset, and Operational Toolset. In Chapter 3 of “Why We Can’t Grow Our Business”, we will address Organizational Skillset in more detail as a basis for successful growth. Stay Tuned!