The top 22 percent of growth executives surpass their competitors and their industries to meet aggressive revenue goals. You know they are implementing a Revenue Growth Methodology. But what is driving their decision to do so? Leaders who have adopted a Revenue Growth Methodology cite five influential trends.
1. Slow-growth companies present fewer interesting opportunities for executives than fast-growth companies, and may have difficulty attracting and retaining talent.
Competition for top talent is fierce in job categories such as head of sales, CMO, or chief product officer. Executives with great track records in these positions are in high demand and can work anywhere. If your organization is not growing faster than your competitors or your industry, it is unlikely you will be able to attract top talent.
On the flip side, if your company is a growth story, executives will flock to it with the promise of valuable stock grants. Essentially, a Revenue Growth Methodology can help you attract and retain outstanding executive talent through revenue growth. Access a complete resource of emerging best practices to develop sales talent, by reviewing the How to Make Your Number in 2018 . Flip to the People Plan phase starting on page 367.
2. Slow-growth companies are much more likely to be acquired than fast-growth companies, often resulting in executive job loss.
The amount of capital available for mergers and acquisitions is at historic highs. Public companies have large amounts of cash on the balance sheet, and access to cheap debt. Private equity firms have raised enormous sums of capital and are looking to put it to work by actively seeking to acquire companies that are experiencing slow growth, with the potential to accelerate growth under new management. This leaves many executives out of a job. A Revenue Growth Methodology can save your job by keeping acquirers at bay.
3. New markets with high organic growth rates are the best source of revenue growth, but entry often requires a new go-to-market approach.
New markets with growth characteristics are very attractive because your growth comes at the expense of companies in other industries. Competitors in this category are least able to retaliate and may not even realize to whom they are losing shares.
At the same time, entering a new market usually means you must develop a new product or products, which requires a fresh go-to-market approach. The Revenue Growth Methodology will help you properly enter different markets with your new products.
4. Mature markets are sources of revenue growth only if share can be taken; that typically requires adoption of emerging best practices.
In concentrated markets, share battles often lead to a cycle of market share give and take. This rarely results in a permanent share gain for any of the competitors, unless the competitor changes the go-to-market enough to create an innovative, hard-to-imitate competitive advantage.
Other share gain methods outside of altering your go-to-market approach, such as incremental product innovation or pricing and packaging, come at a steep price. The competitive retaliation will come, and it will come swiftly. Instead, executives are turning to a Revenue Growth Methodology that leads to sustainable share gains in a mature market.
5. Growth through acquisition works when a new Revenue Growth Methodology is implemented to integrate the acquired companies.
Bolt-on acquisitions can create value for shareholders if the premium paid for the target is not too high. However, creating growth through these large acquisitions tends to generate less value for shareholders. This happens when a market begins to mature, and the industry has too many suppliers. While acquiring the company shows growth, the combined revenues do not increase and sometimes decrease because customers prefer to have multiple suppliers. Any new value ends up coming from cost cutting, not from revenue growth.
Since bolt-on acquisitions can create revenue growth, many companies do them. When an acquired company is brought on board, its product and sales teams need to be integrated into the company. This is the perfect time to design a new go-to-market plan. Ultimately, a Revenue Growth Methodology enables bolt-on acquisitions to be successful.
- Your revenue goal is realistic
- You will earn your bonus
- You will keep your job