What is a growth system?
By: Saul Delage
Tags: Systems Thinking, Growth, Fractional Executive, Growth Strategy, Chief Growth Officer

Anyone who’s been around business and sales has likely heard the term “rainmaker”. And just to be safe, here’s my preferred definition courtesy of Urban Dictionary:

A powerful and successful representative or agent who generates a lot of unexpected business.

While this may seem like a positive to many readers, it’s actually NOT what most businesses want. Businesses thrive on predictability, which is why so many businesses have been challenged by COVID-19 over the past several months and “a lot of unexpected business” is by definition unpredictable.

The business leaders that I invest the majority of my time with recognize the value of having a growth system vs. a rainmaker. A “growth system” may not sound as interesting as the term “rainmaker”, but trust me — it’s definitely more attractive for your business!

When it comes to “rainmaking”, most businesses would strongly prefer a predictable sprinkler system to intermittent downpours even if, at the end of the day, the total quantity of water is the same…

What is a growth system?

Surprisingly, there are few definitions that I love — particularly if the business at hand is a professional services organization such as a digital agency, digital product studio, or other specialized consultancy. For readers coming at this from a Product and/or startup Platform business standpoint, I have a lot of respect for the thought capital the team at Reforge continues to contribute to this topic. In particular, their blog post Building Growth: Product, Process, and Team is a must read for any modern product marketers and/or product growth executives.

My definition of a (business) growth system is:

A holistic model/framework to strategically and sustainably grow a business by taking into consideration key interdisciplinary linkages between People, Process, and Platforms with regards to both dependencies and impact on revenue as well as costs.

It starts with the, often heretical, acknowledgement that Sales and Delivery are intrinsically linked, and that to optimize business growth — one must map the critical dependencies (or linkages) between people, process, and platforms (the system & tools use to run one’s business).

Why is a growth system better than a rainmaker?

The predictability that comes with a system cannot be overstated. While everyone acknowledges that modern companies need to be agile and adaptable given how fast-paced and dynamic business is today, it’s still very challenging for most businesses to satisfy huge, unplanned surges in demand profitably. Most businesses either do not have additional units of the product or service available so the surge in demand is essentially wasted, or they must contract with other providers to meet demand which typically increases costs substantially.

For example, let’s think of a growth system as a Farm-A that installs a sprinkler system vs. Farm-B that relies on, you guessed it, the rain…

While Farm-A may not be able to afford to install the sprinkler system (or pay for the water) to irrigate all of their cropland, they start by focusing on the most profitable crops. Over the course of a few years, the consistency of being able to plan for both costs and revenue allows Farm-A to expand the sprinkler system to most of the farm and even change out a few of the crops they bring to market that have much higher profit margins.

On the other hand, Farm-B used their profits to farm more land with additional workers. The plan seemingly worked until one year a deluge of rain ruined all the crops. A drought the following year and Farm-B is no more…

How does one design, implement, and manage a growth system?

That’s definitely the million-dollar question and too much for a single blog post, but please read my other posts regarding the Growth Maturity Matrix and 4 Considerations when planning for Growth as great building blocks toward the answering that question specifically for your business.

Here are a few actionable thought-starters that you may find helpful:

1. Start by mapping how growth happens today (and remember to think holistically across People, Process, and Platforms):

· How is a customer acquired to do new work?

· What needs to happen for your business to get paid for this work?

· When the new work ends, what happens?

2. Now, validate and consider alternate configurations to the map you’ve created:

· Do all the components and linkages look correct?

· What’s the potential impact when you add and subtract components and/or reconsider the various linkages?

· Does your new configuration look amazing on paper, but needs to be sequenced given timeline, cash flow, or capital requirements?

3. Build out the corresponding business model to your plan:

· What are the assumptions that drive your plan inclusive, but not limited to: Revenue, Costs, and Time

· How can you create formula to express these assumptions?

· When managing the plan, what are the best KPIs to serve as leading indicators of whether your assumptions are valid or need to be adjusted?

If this all makes sense to you, but seems like an unrealistic amount of effort for you to take on while also doing everything else you do to manage your business, perhaps you’re a good candidate for a fractional CGO.

Please contact me to discuss how to apply these concepts to your business.