Most business owners and leaders we speak with agree that their lives would be much more straightforward if growth in their business was more sustainable over time. What we hear though, is that many see occasional "sugar hits" of really strong growth with not a lot going on in between. Average it out over time and it looks ok. But the ride along the way is a bit of a roller coaster.
Great businesses don't have the same experience. They generate growth that is more sustainable (and consistent) over time and generally speaking seem to outperform their peers in both good and not so good economic conditions.
What's their secret?
They know with total clarity the answer to four fundamental questions. And they're questions every business that aspires to consistent, sustainable growth needs to know the answer to.
So what are the four questions and why are they important?
1. What is our business great at?
You'd think this question has a pretty clear and simple answer. Most owners started their business because they had a particular skill or talent, were great at building something or creating a product.
All too often though, business stray too far from the original “great thing” they were good at, to the point where they’re unrecognisable.
Successful businesses don’t do that. They tend to stick pretty closely to their knitting. They'll innovate and improve along the way but don't stray too far from what they're great at...the business remains firmly planted in its "core greatness".
Why is this important?
When you know what you’re good at, it's pretty easy to deliver great results. Your business becomes a labour of love and your passion will show through in everything you do. Be clear about your product/service offer, the benefits it brings to customers and consistently deliver those benefits. It’s a great start in building sustainable growth.
You can't afford to be complacent, of course. You need to be aware of and adjust for things like technological advances, changes in customer preferences and other factors that might turn your "greatness" into "not so great anymore".
Make those adjustments - you have to - but stay as close as you possibly can to what it says on the label.
2. Why do we do the thing we’re great at?
This is your business purpose.
As Simon Sinek said in his now legendary TED talk, people don't by what you do, they buy why you do it. You need to be crystal clear on your purpose - that is, the reason you do what you do beyond purely commercial considerations.
A great way to address this question is to ask yourself why your business was originally established. What were the customer challenges you or the founders thought needed to be addressed?
Why is it important?
We don’t believe there’s too many business owners who started their business purely with the profit motive in mind, nor the idea that their business was going to make them rich. Those are outcomes that some achieve but it’s not rarely a prime motivation.
They’re also most definitely not the reasons customers buy from your business, nor why employees want to join you and stay with you.
Customers and employees are certainly not driven by your desire to make money.
But they will buy into your business purpose, leading to higher engagement and loyalty across both groups.
3. Who should we be doing our great thing for?
In other words, who's your ideal customer?
It pays to get really specific with your answer to this question. Of all the consumers who might happen to buy what you have to offer, there’s a subset who a) love what you do and b) buy into why you do what you do – your purpose.
When they become customers, they do so with intent.
Your business purpose should be your starting point when building up an ideal customer profile. Focus your thinking on the customers on whose needs and challenges you based your initial business. Why did the business target those customers with those specific needs?
You’ll likely begin to see some similarities among your very best existing customers which you can use to model ideal customers to target in future.
Why is it important?
Your ideal customers buy from you because they’re truly engaged with your business.
And when your customers are engaged, they’re more loyal to your business. They’re more likely to become repeat purchasers and support you through good times and bad. They also become advocates for your business and let everyone know how great you are which means free marketing!
4. Who's going to help us deliver our great thing?
You shouldn't hire just anyone to join your business (though some aren’t particularly selective, it would seem).
First and foremost, you need employees who buy into your business purpose. Your employees want to know how their day to day work contributes to a bigger picture…how their efforts help the business fulfill its busines purpose.
Of course you have to employ the right mix of skills and abilities to enable the production and delivery of whatever product or service you offer. But great skills play a supporting role to employee engagement when it comes to delivering a great customer experience and achieving sustainable growth.
Why is this important?
There’s a host of research globally that points to the importance of employee engagement and its impact on customer satisfaction and financial outcomes.
For example, improving engagement among employees:
Reduces absenteeism (and “presenteeism”);
Improves productivity; and
Reduces employee turnover.
So there you have it.
Four simple questions (with not so simple answers) that every business needs to be able to answer if they’re to grow at a sustainable rate over time.
The challenge for business owners/leaders that none of these questions stands alone and dealing with one or two isn’t enough. To avoid the roller coaster growth ride, you must have clarity on all four.
It’s not easy work to get to that point but well worth the long term pay off, both in terms of business outcomes and for your sanity as an owner!
If this Insight has given you food for thought, you're probably interested in creating sustainable growth by answering our four simple questions. That's where GrowthCatalyst can help.
We invite you to contact us to arrange a conversation, face-to-face or virtual.
Alternatively, you can book a time for an initial discussion here.
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