Profitable Growth is Everyone's Business - PCC - ebook

The coauthor of the international bestseller Execution has created the how-to guide for solving today’s toughest business challenge: creating profitable growth that is organic, differentiated, and sustainable. For many, growth is about “home runs”—the big bold idea, the next new thing, the product that will revolutionize the marketplace. While obviously attractive and lucrative, home runs don’t happen every day and frequently come in cycles.  Products like Kevlar, Teflon, and the Dell business model for selling personal computers may be once-in-a-decade phenomena. A surer and more consistent path to profitable revenue growth is through “singles and doubles”—small day-to-day wins and adaptation to changes in the marketplace that build the foundation for substantially increasing revenues. The impact of singles and doubles can be huge. They are not only the basis for sustained revenue growth but, in fact, the foundation for home runs. Singles and doubles provide the discipline of execution, an absolute necessity for successfully bringing a breakthrough technology to market or implementing a new business model. Inherent in this way of thinking is the revolutionary idea that growth is everyone’s business—not solely the concern of the sales force or top management. Just as everyone participates in cost reduction, so must everyone be engaged in the growth agenda of the business. Every contact of each employee with a customer is an opportunity for revenue growth. That includes everyone from the people working in a company’s call center handling customer inquiries and complaints to the CEO.  In this trailblazing book, Ram Charan provides the building blocks and tools that can put a business on the path to sustained, profitable growth. For more than twenty-five years, Ram Charan has been working day in and day out with companies around the world. The ideas he has developed for solving the profitable revenue growth dilemma facing many businesses are based on personally seeing what works in real time. These are ideas that have been tested across industries and that deliver results, and they can be put to use starting Monday morning.

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Tool 1Make revenue growth a part of everyone's daily routine

If only the senior managers of the organization attempt to generate growth, many opportunities will be overlooked. Instead, employees at every level should be actively attempting to grow revenues in their own individual areas. The search for growth needs to be woven into every conversation, every meeting and every presentation if the organization is to excel.

Everyone wants to grow, but actually generating growth is proving difficult because:

1. More time and effort has been given to cutting costs and consolidating operations than is typically devoted to growing revenues.

2. Most managers think of growth strictly in terms of disruptive technologies and grandstand plays rather than daily, steady improvements that lead to growth.

3. There has been a general tendency to think of improving productivity as downsizing or cost-cutting rather than something that will result in a better competitive position and increased revenues.

4. The majority of the rank-and-file employees assume revenue growth can only be generated by the senior management of the organization. Therefore, most employees feel no personal responsibility to grow the business's revenues.

In reality, however, front-line employees are the ideal resource for new growth ideas. They come face-to-face with customers all the time, and they know from observation what customer needs are currently being unmet. For example:

■ Customer service people will know exactly what people ask for which is not available.

■ Repair personnel know exactly when people will want to upgrade their old appliances, and what they look for in new goods.

■ Salespeople are a great(and often overlooked)source of market intelligence.

■ Logistics people understand the importance of having enough stock to meet customer demand──the basis of enhanced customer satisfaction.

If everyone can be enlisted into an enterprise-wide effort to grow revenues, the entire organization will become energized around moving the organization forward. At a personal level, employees will get a boost to their self-confidence when they see their ideas being put into practice. If every employee at every level of the firm is focused on growing by doing some-thing more for the customer, the organization will leap forward.

Key Thoughts

"It often comes as a revelation to many of the people I work with that revenue growth is not just the domain of the specialists──the sales force or those in charge of product development, for example. Growth is everyone's business. Just as in baseball, where everyone has the potential ability to hit a single or a double, in business everyone has an opportunity to increase revenues. And, in fact, people who don't occupy the executive suite have a big vested interest in doing so. Without growth, personal opportunity is a zero-sum game. With growth, the organization expands and people can build a career and a future with a company they have faith in. "

Ram Charan

Tool 2Try and hit many doubles and singles, not just home runs

Breakthroughs are too unpredictable. Therefore, you're much better off trying to make marginal improvements in your activities and social processes day-in and day-out. Over time, a long run of steady incremental increases can result in impressive and profitable revenue growth.

Instead of equating breakthroughs(the equivalent of a home run in baseball)with growth, you'll do much better if you can build a solid track record of singles and doubles──improvements, extensions or marginal enhancements in what's already working with your customers. Singles and doubles usually come from thinking deeply about what customer needs are currently being unmet and then moving to meet those needs by better aligning what the company does.

Singles and doubles are forward looking. They don't result from looking in the rear-view mirror, but occur when employees look from the outside-in──that is, from the customer's perspective. Singles and doubles happen when the company executes better than its competitors.