The problem with revenue-generating strategies, or Winning Moves, is that you don’t feel you need to work on them when things are going great. You are too busy working in the business and harvesting sales from existing Winning Moves. Then the day comes and BAM! Your current winning strategies begin to slow down. Growth slows. But just like the characters in Spencer Johnson's Who Moved My Cheese, we are slow to go out and innovate new Winning Moves. Why is it so hard?
Rhythm Blog | Strategies for Growth
by Patrick Thean and the Rhythm Team
I recently re-read the HBR article entitled "Building Your Company's Vision" by Jim Collins and Jerry Porras, and I was struck by the great examples they gave to illustrate different types of Big Hairy Audacious Goals (BHAGs). If you are struggling to come up with a BHAG for the first time, these examples might help you get started. These may also be helpful if you are working with your team to reset after accomplishing your 10-25 year visionary goal. Don't let your team fall into the trap of complacency after reaching the mountaintop of one BHAG; celebrate your success, and then reset. Having a long term, visionary goal that aligns your team and gets everyone excited is the only way your company will continue to grow with purpose, reaching peak after peak of success.
At each business stage, leaders face new challenges and complexity. The Herculean effort to launch and grow a business to $1m revenue is different for CEOs, entrepreneurs, founders, key staff members, and investors than when operating at $5m. It follows that the level of challenge and complexity at $250m is different than at $500m. At each stage, you’ll experience a breakdown in the systems and processes that allowed you to more easily make it to this point – to put it simply, what worked to get you here won’t work to get you there.
Along the way, you accumulated multiple systems, developed workarounds, and put a few band-aids on any process that became strained with growth. At each stage of your business, you’ll experience stress on previous systems and processes. Whatever you did last year won’t get you to your next year plan, your 3-5 year targets, or your longer-term BHAG without a whole lot of sweat – and likely, not at all. To grow to the next level, you have to (once again) streamline your systems, processes, and reassess your talent. You cannot rely on memory, paper, or the systems that you used earlier in your career or business.
I’ve observed eight specific habits exhibited by successful leaders and CEOs as measured by consistent revenue and profit growth (fueling greater community impact), and each can be learned by anyone. Develop the following habits and you’ll be on your way to continued growth.
Your Profit/X or financial engine is one of the components of Jim Collins’ Hedgehog, and one of the three key areas to consider when working on your BHAG. Your profit/x is how you choose to make money; it is a strategic metric, not an operational one. This ratio is a key driver in your financial engine, and when you make decisions about how to spend money (which products to launch, where to open new locations, how many people to hire), you should be guided by asking how it maximizes your profit/x.
Insight into the right financial driver can help your company succeed even if you are in a failing industry. The question Jim Collins offers in Good to Great to help you come up with this strategic metric is “If you could pick one and only one ratio - profit per x (or, in the social sector, cash flow per x) - to systematically increase over time, what x would have the greatest and most sustainable impact on your economic engine?” (p. 104).
If you’ve done the hard work to determine the right BHAG for your company, you are probably chomping at the bit to get started. What’s the first step toward achieving that 10-25 year visionary goal? If you truly have a BHAG that is audacious enough, you probably don’t know where to start!
That’s a good thing - it is supposed to be a little daunting. But, the good news is that you can start steadily climbing toward your goal using the tips outlined in the infographic below to help you reach the summit.
In a recent Annual Planning session, one of our clients asked us to help them review and renew their Winning Moves. They wanted to make sure that their growth strategies were still powerful enough to drive growth over the next 3 years. We highly recommend reviewing your Winning Move strategies every year. During good times, it is easy to neglect working on your Winning Moves. Then when growth begins to slow, we realize that we are already late to the game at developing new revenue growth moves. If you want consistent year over year growth, you must review and renew your Winning Moves.
It is best to only have a few Winning Moves. Otherwise, the team might be spread too thin as resources get allocated across too many initiatives, causing teams to inadvertently compete for some of the same resources. Competition for internal resources often causes negative stress and reduces team productivity, even to the extent of building silos.
I’d like to share our Winning Move Process so that you can have an objective way to discuss, debate and agree on the best 2 or 3 ideas for growth.
I recently prepared for an annual planning session with a client and one thing the client wanted to work on was their Big Hairy Audacious Goal (BHAG). The best way to develop your BHAG is to first discover your Hedgehog. If you have not read much of Jim Collins' work, you may be asking yourself, what does a Hedgehog have to do with my BHAG and long-term goals for the company? The term comes from the famous essay by Isaiah Berlin titled “The Hedgehog and the Fox.” The crux of the story is that the fox is cunning and knows many things while seeing the world in all of its complexity, but the hedgehog knows one big thing and simplifies a complex world into a single organizing idea.
Customer retention is a routine, where you rinse, repeat, and rise to perfection over time. In 2018, winning new customers and keeping their business is going to get more challenging now that new trends, like enhancing user experience through content and emphatic marketing, are on the rise. Therefore, if you want to win and retain customers in 2018, you are going to have to fine tune or make adjustments to the customer programs you have already implemented.
Here are 5 tips to help you succeed:
Know Your Brand
The secret that many companies continue to miss when attracting customers is having a clear vision of what their brand stands for and how it is communicated in the market. You need to know what wins customers over to begin with. To do so, you have to answer the following questions:
Creating a regular habit to think, or a Think Rhythm, can be a powerful way to:
- Create and strengthen your Strategic Foundation
- Work on your revenue-generating strategies, or Winning Moves
- Brainstorm ways to get Priorities or Key Performance Indicators back on track
The purpose of a Think Rhythm is to...wait for it….think. It’s not a time to ready, aim, fire at approaches; rather, it’s a time to slow down before you speed up on execution. It helps you to work smarter instead of harder on achieving breakthroughs for your business.
As you set your strategic priorities for the upcoming year, remember an important distinction: Your “strategic plan” isn’t as important as your “planning process” to get to that plan. An absolute imperative is for you to recognize the business relevance of strategic thinking. Your Annual Plan isn’t just about who’s doing what. Preceding that is what the company aspires to achieve. Strategic thinking is about the company, which puts into context everything else you’re asking people to do in the coming year (especially in the first quarter!).