This or That?
As CEO, you’re presented with initiatives from your team all the time, and every single one is a top priority. Whether it’s signing off on a new marketing campaign or helping revamp the sales team, it’s tough to know which plan should be #1 and which should be #100.
This problem is not unique to any industry. All CEOs face tradeoffs as they try to push their companies to greater profitability. But, according to SBI internal research, the market-leading companies (top 16%) choose to do a few things well, as opposed to many things poorly.
By purposefully placing 2-3 strategic bets, these CEOs grow their companies at least 37% faster than their competition. Use data to set goals accurately, prioritize and make calculated bets, and develop a program to oversee goal development. By doing so, you can take steps to outpace your competitors as well.
If you’re going to make a few critical bets, you want them to be the right ones. How can you determine whether the change that you’re hoping to drive is happening as planned? Waiting until the end of the next fiscal year is a bad time to realize that you’ve been pulling the wrong levers.
As with most business decisions these days, the answer lies in setting numbers and making decisions based on data. If your company doesn’t have clean data on performance, the best time to start a disciplined data governance program is right now. And if your company does collect data on KPIs regularly, then you can start leveraging the data you have to identify the best actions for your business.
To help with this activity, SBI has identified a “Core 10” set of Key Performance Indicators (KPIs) that tie to the activities of Market Leading companies that are consistent across industries. Mapping current processes to these KPIs can help your company track progress in real-time. It will also allow you to identify the bets that will make the most significant impact on your business. It also will help you make adjustments to your Go-To-Market program before the end of the month, quarter, or year. That way, you can identify what you’re doing right and what needs to be improved before facing the board of directors with a less than glowing report.
These KPIs can help you to narrow your focus to the top issues facing your company over the next year. Once those priorities have been identified, you can then begin the process of ranking and choosing the most important ones.
Prioritizing and Choosing Bets
Once the data has given you a clear view of the top priorities in the company, you need to decide which initiatives to tackle first. With so many options and so many stakeholders, it can be easy to make many small bets across verticals, knowing that none will be massive disasters (or successes). Or worse yet, the variety of options can lead you to stick with the status quo and take no action at all.
To prevent this, it is essential to be methodical with how bets are made. The greatest chance for success lies in clearly defining each possible initiative and then clearly identifying the scope of the initiative. The scope includes assigning an executive sponsor, identifying a potential timeline, and outlining what success looks like for that particular bet. To help with this, the following steps can be used to prioritize your options:
- Belief – What is your understanding, or “belief” of the situation as it now stands?
- Bet – What is the “bet” that you are willing to make based on this belief?
- Expected Results – What is the outcome that you are expecting if the bet you make is successful?
- Learning – What would you learn about your company if the bet works? If it doesn’t work?
- Next Steps – Based on your analysis, what are the next steps you are willing to take?
This process will help clarify what bets you should make. For multiple high impact initiatives, the priority of the bet should be based on the level of effort and projected time to realization of the results. Then, choose the top 2 or 3 and make the decision to act. This can be intimidating, but staying still is not an option. Have confidence in your process and choose to move in the right direction.
Create Sustainable Revenue Growth
Initially, this process may be difficult. It may even cause some growing pains within the executive team as they take a more thorough approach to tactical planning. But this shouldn’t be a “one-and-done” exercise. As the market evolves, so should your company. To be part of the top 16% of market leaders, you need to consistently assess the bets that you are making to keep pace with competitors. The frequency of this assessment can vary by company, but it should happen at least once a year, and different bets should be made each time.
As you begin to place bets on your company and drive organizational excellence, you’ll see a virtuous cycle of progress begin to move your business. The bets may still be large, but your company’s ability to accomplish these tasks will increase. Additionally, competitors will suddenly start to wonder how you do it. This will ensure strong revenue growth for your firm stays strong for years to come.
SBI has collected thousands of data points and performed an in-depth analysis that outlines what market-leading CEOs do to make their number. The full summary of this research can be found in SBI’s 13th annual research report, “Making Your Number in 2020”.
You can take steps now to ensure that you aren’t left behind by competitors or the market. By using data to accurately set goals, prioritize and make calculated bets, and develop a program to oversee goal development, you and your team can confidently bet on your company and make your number.
To learn how you stack up against the top 16% of companies, take our Revenue Growth Diagnostic, and schedule a call with an SBI representative today.