The days of ruthless downsizing and drastic cost cutting are long gone. Today, companies have realized that the best way to make a profit is only through growth – profitable growth. In this book, author Ram Charan provides 10 tools anyone can use to overcome obstacles and achieve profitable growth.
These tools are:
1. Income growth is everyone’s business, so make it part of everyone’s daily work routine.
2. He hits a lot of singles and doubles, not just home runs.
3. Look for good growth and avoid bad growth.
4. Dispel the myths that inhibit both people and
5. Change the idea of productivity by increasing
6. Develop and implement a growth budget.
7. Upward marketing of beef.
8. Understand how to cross sell effectively (or sell value / solutions).
9. Create a social engine to accelerate revenue growth.
10. Put innovation into practice by turning ideas into
income growth. One of the most critical points discussed
it is the need to reorient thought. The majority
entrepreneurs and executives think of growth as
“home runs” and most of the time ignores the “singles
and doubles. “Managers often look forward to the big
breakthrough or great new product inadvertently
that home runs don’t happen everywhere; sometimes,
They don’t even happen in a decade.
Instead of aiming for that big home run, aim for singles and doubles. This is a safer and more consistent path. Of course, it is important to note that while targeting singles and doubles, home runs should not be excluded. These singles and doubles come from an in-depth analysis of ALL the fundamentals of a company.
Another factor to consider is the difference between
good growth and bad growth. Managers must dispel the myth that growth in any form is a victory. Although growth (both good and bad) generates income, only good growth increases not only income, but also improves profits and is sustainable over time.
Poor growth, on the other hand, reduces shareholder value.
Reckless mergers and acquisitions are examples of bad growth. Lowering prices to gain market share without reducing costs can also be detrimental to the health of your business.
Here are some questions that can help you diagnose whether or not you are part of a growing business:
1. What percentage of time and emotional energy do you spend
Does the management team routinely focus on revenue growth?
2. Are there only exhortations and is there talk of growth or is it
is there really follow-up?
3. Do managers talk about growth only in terms of home runs? Do you understand the importance of singles and doubles for long-term, sustained organic growth?
4. How much of the time of each member of the management team is spent making effective visits to clients? Do they do more than listen and probe for information and then try to “connect the dots”?
5. Does the management team come into contact with the end user of your product?
6. Are the people in the business clear about the
future sources of revenue growth? They know who
7. Would it characterize your company or business unit?
culture as cost reduction or growth oriented? If the answer is one or the other, you should start doing both. Do people in leadership positions have the skill, guidance, and determination to increase revenue?
8. Does the company practice revenue productivity? It does
Consider whether there are ways to use your current resources more effectively to generate more income.
9. How well does your sales force extract intelligence from
customers and other market players? How good is it
this information communicated and applied by other parts of your organization, such as product development?
10. How good are your upstream marketing skills, that is, the ability to segment markets and identify consumer attributes in your business?
About the Author:
Ram Charan is a co-author of the landmark Fortune article.
“Why CEOs Fail” and advisor on corporate governance, CEO succession and strategy implementation. He was named Best Teacher by Northwestern’s Kellogg School and as a premier executive educator by Business Week. He is the author of Boards at Work, a co-author of Every Business Is a Growth Business, and a frequent contributor to the Harvard Business Review. (6/2000)